Journal
STRATEGIC MANAGEMENT JOURNAL
Volume 22, Issue 5, Pages 403-433Publisher
WILEY
DOI: 10.1002/smj.164
Keywords
outsourcing; supplier relations; product development; competitive advantage
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Outsourcing fins become an important strategy for many firms. Yet, firms need to complete with their competitors who also outsource and may share the same suppliers. This article explores how a firm could outperform others in managing the division of labor with a supplier in product development. Drawing on the empirical data collected from the Japanese auto industry, this paper shows that an automaker needs capabilities to coordinate various activities both externally with a supplier and internally within its own organization, in order to gain better component development performance. Overall, the results imply that outsourcing does not work effectively without extensive internal effort. Copyright (C) 2001 John Wiley & Sons, Ltd.
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