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Outsourcing congruence with competitive priorities: Impact on supply chain and firm performance
Author(s) -
Kroes James R.,
Ghosh Soumen
Publication year - 2010
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/j.jom.2009.09.004
Subject(s) - outsourcing , supply chain , business , industrial organization , competitive advantage , congruence (geometry) , knowledge process outsourcing , supply chain management , empirical research , business administration , marketing , philosophy , geometry , mathematics , epistemology
The growth of outsourcing has led outsourcing strategies to become an increasingly important component of firm success (Gottfredson et al., 2005). While the purported goal of outsourcing in supply chains is to derive a competitive advantage, it is not clear whether the outsourcing decisions of firms are always strategically aligned with their overall competitive strategy. In this paper we evaluate the degree of congruence (fit or alignment) between a firm's outsourcing drivers and its competitive priorities and assess the impact of congruence on both supply chain performance and business performance, using empirical data collected from manufacturing business units operating in the United States. We find outsourcing congruence across all five competitive priorities to be positively and significantly related to supply chain performance. We also find the level of supply chain performance in a firm to be positively and significantly associated with the firm's business performance.