An optimal level of technology reliance on foreign partners in a global sourcing partnership: components procurement, technology management and market performance

Masaaki Kotabe and Preet S. Aulakh

RAE - Revista de Administração de Empresas, 1996, vol. 36, issue 4

Abstract: Existing studies on global sourcing strategy have implicitly adopted a closed-systems perspective in which sourcing activities are managed within a multinational company across national boundaries. Product and process innovations and components procurement that are jointly managed by a consortium of cooperating firms have not been examined. In this paper, we empirically examine the issues concerning sourcing partnerships in an open-systems perspective. Findings suggest that even in a sourcing partnershiparrangement with a foreign supplier, the principal firm's ability to procure and control the supply of major components has a positive bearing on its market performance.

Date: 1996
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