After decades of offshoring production across the world, companies are rethinking their global networks. Local sourcing is receiving more attention, but it remains challenging to balance the offshore sourcing cost advantage against the increased inventories, because of its longer lead time, and against the cost and (volume) flexibility of each source's capacity. To guide strategic allocation in this global network decision, this paper establishes reasonably simple prescriptions that capture the key drivers. We adopt a conventional discrete-time inventory model with a linear control rule that smoothes orders and allows an exact and analytically tractable analysis of single- and dual-sourcing policies under normal demand. Distinguishing features of our model are that it captures each source's lead time, capacity cost, and flexibility to work overtime. We use Lagrange's inversion theorem to provide exact and simple square-root bound formulae for the strategic sourcing allocations and the value of dual sourcing. The formulae provide structural insight on the impact of financial, operational, and demand parameters, and a starting point for quantitative decision making. We investigate the robustness of our results by comparing the smoothing policy with existing single- and dual-sourcing models in a simulation study that relaxes model assumptions.
Simons, Tony L.; Leroy, Hannes; Collewaert, Veroniek; Masschelein, Stijn (2015)
Substantial research examines the follower consequences of leader (mis)alignment of words and deeds, but no research has quantitatively reviewed these effects. This study examines extant research on behavioral integrity (BI) and contrasts it with two other constructs that focus on (mis)alignment: moral integrity and psychological contract breaches. We compare effect sizes between the three constructs, and find that BI has stronger effects on trust, in-role task performance and citizenship behavior (OCB) than moral integrity and stronger effects on commitment and OCB than psychological contract breach. These stronger attitudinal consequences run counter to our initial expectations, but they provide evidence of important conceptual distinctions and mechanisms that we articulate. BI theory suggests that BI’s greater performance impact is due to the notion that BI affects communication clarity in addition to attitudes. Results of meta-analytic structural equation modeling are consistent with this proposed dual path of BI’s impact. We highlight avenues for future research on BI and discuss how our findings inform the broader research on leader (mis)alignment.
Although a significant body of research has investigated the independent effects of distinct types of slack resources, current theoretical and empirical work does not sufficiently clarify how bundles of slack resources affect firm outcomes. Drawing on the resource constraints literature and the slack literature, we investigate how distinct bundles of financial and human resource slack influence firm performance and survival. Using a sample of 4715 European information and communication technology firms, we show that neither parallel resource abundance (having slack in financial and human resources) nor parallel resource constraints (lacking slack in financial and human resources) are optimal for firm performance and survival. However, firms with selective constraints that combine slack in financial resources with constraints in human resources exhibit superior performance without decreased survival prospects. Taken together, this study extends current research by providing a more nuanced view of the relationships between slack resources, firm performance, and firm survival.
Contrasting with extant research centred on the organizational challenges of sourcing services in culturally distant countries, we show that cultural differences between home and host countries do not prevent firms from achieving their cost savings targets. Instead, the effect is positive, both for the captive and outsourcing governance models. Using insight from social psychology research and the theory of organizations, we build the argument that the positive effect is due to cultural differences providing an attention stimulus for decision-makers to thoroughly gather and process information on the costs and benefits of global sourcing, thereby reducing the risk of cost estimation errors. The empirical validation uses a data set of 624 global services sourcing initiatives obtained from the Offshoring Research Network, complemented with multiple external sources of cross-country data on cultural differences, languages, geographic distance and education levels. The main contribution of the article is to add much needed nuance to the otherwise monotonic negative view of cultural differences in extant global sourcing literature. Moreover, the original theoretical framework and resulting attention stimulus argument we develop open new avenues for research on the consequences of cultural differences in international business operations more broadly.
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