A processual analysis of the purchasing and supply organization in transition: the impact of offshoring

Godfrey Mugurusi () and Lydia Bals ()
Additional contact information
Godfrey Mugurusi: Norwegian University of Science and Technology (NTNU)
Lydia Bals: University of Applied Sciences Mainz

Operations Management Research, 2017, vol. 10, issue 1, No 6, 64-83

Abstract: Abstract Many companies have resorted to offshoring in order to reduce costs and grow their global market presence. Yet it remains unclear what impact the offshoring strategy has on the purchasing and supply organization (PSO) of these companies. In this paper the nature and type of changes offshoring organizations make within the PSO are examined, i.e. how new purchasing and supply management (PSM) structures and practices emerge, are maintained or are discarded as production operations are relocated. The processual perspective is used to analyze empirical data from a rich, in-depth case study within a global engineering company. Results suggest that in line with the law of requisite variety the PSO changes thoroughly when the company relocates its production activities through the captive offshoring mode, but does so in a more disjointed and non-linear manner than the current stage models would suggest. The offshoring process provides momentum for PSO change and influences where and how the change happens. We present five propositions for further research and conclude that offshoring provides managers with opportunities to: (i) change and influence the strategic direction of PSM in their organizations, and (ii) build viable strategies of retaining and managing knowledge and PSM competencies in global operations.

Keywords: Purchasing; Procurement; Sourcing; Supply management; Organization; Captive offshoring; Processual analysis; Case study research (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s12063-016-0119-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:opmare:v:10:y:2017:i:1:d:10.1007_s12063-016-0119-7

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/12063

DOI: 10.1007/s12063-016-0119-7

Access Statistics for this article

Operations Management Research is currently edited by Jan Olhager and Scott Shafer

More articles in Operations Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().