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Skowronski Dissertation.pdf (2.6 MB)

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Managing Manufacturing Outsourcing Relationships

Skowronski, Keith Collins
http://rave.ohiolink.edu/etdc/view?acc_num=osu1466864349

Abstract Details

2016, Doctor of Philosophy, Ohio State University, Business Administration.
In the last fifteen years there has been a drastic increase in the outsourcing of manufacturing activities to offshore suppliers, otherwise known as offshore outsourcing. These offshore outsourcing endeavors have often encountered a variety of unanticipated or hidden costs. While these hidden costs can manifest in a variety of forms, two of the main variations are intellectual property risk (i.e., supplier poaching) and quality risk (i.e., supplier shirking). The research in this dissertation utilizes dyadic data from 109 manufacturer-supplier relationships to investigate how the institutional environment of a supplier's location influences the effectiveness of different safeguards and relationship management practices, which can result in increased poaching and shirking. Understanding how to control these hidden costs of outsourcing is what differentiates successful outsourcing relationships and is of critical importance to manufacturers. Manufacturers are often putting their innovations at risk by outsourcing to suppliers in geographical locations that do not protect intellectual property. For that reason, poaching, or supplier's unauthorized use of a buyer's proprietary information, has been considered one of the main hidden costs of outsourcing. The strength of property rights has also been suggested to influence the effectiveness that safeguards have on poaching. Building on these arguments, this dissertation investigates how property rights impact the effectiveness of two safeguards, supplier transaction specific assets and communication, on poaching. Property rights are found to not only have a direct effect on supplier poaching, but they also change the effectiveness of both safeguards. In weak property rights locations, communication is found to be more effective in reducing poaching. Interestingly, in weak property rights locations not only are supplier transaction specific assets less effective in reducing poaching, but increases in these investments are actually associated with an increase in poaching. Shirking, or the deliberate underperformance of a supplier's agreed upon duties, is another manifestation of the hidden costs of outsourcing. Manufacturers implement different relationships management practices to control or influence suppliers, and relationship management practices vary in their effectiveness across suppliers in different cultures. The second study in this dissertation investigates how influence attempts, or the bases of interfirm power, are affected by a supplier's national culture, which can result in increases in supplier shirking. The findings in this study highlight how two different dimensions of culture, uncertainty avoidance and long-term orientation, have different influences on coercive and expert power. While the safeguarding effect of expert power on shirking is greater in high uncertainty avoidance and long-term orientation societies, the effects of coercive power manifest in different ways. In long-term orientation societies coercive power has a positive direct effect on shirking, whereas in high uncertainty avoidance cultures coercive power attenuates the effectiveness of expert power. Intriguingly, in low uncertainty avoidance cultures, a complementary relationship is found between coercive and expert power. Overall, the research in this dissertation highlights how the supplier's institutional environment should influence a manufacturer's relationship management strategy. Without adapting their relationship management approach across different institutional environments, manufacturers are increasingly likely to encounter the hidden cost of outsourcing.
W.C. Benton, Jr. (Advisor)
Peter Ward (Committee Member)
James Hill (Committee Member)
Sean Handley (Committee Member)
227 p.
Business Administration
outsourcing; opportunism; poaching; shirking; intellectual property theft; supply chain relationships; safeguards; interfirm power; national culture; property rights; hidden costs of outsourcing;

Recommended Citations

Citations

  • Skowronski, K. C. (2016). Managing Manufacturing Outsourcing Relationships [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1466864349

    APA Style (7th edition)

  • Skowronski, Keith. Managing Manufacturing Outsourcing Relationships. 2016. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1466864349.

    MLA Style (8th edition)

  • Skowronski, Keith. "Managing Manufacturing Outsourcing Relationships." Doctoral dissertation, Ohio State University, 2016. http://rave.ohiolink.edu/etdc/view?acc_num=osu1466864349

    Chicago Manual of Style (17th edition)

osu1466864349
166
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This open access ETD is published by The Ohio State University and OhioLINK.