Outsourcing suppliers as downstream competitors: Biting the hand that feeds
In this paper, we highlight an aspect of supplier opportunism in the outsourcing paradox that has largely been ignored by extant research - the supplier as a direct competitor of the buyer firm. In light of this paradox, we offer a game-theoretic framework in which we identify conditions under which firms could alleviate or mitigate this outsourcing problem. Our results show that apart from transaction costs, firm-level capabilities (both ordinary and dynamic) play important roles in determining the make only, buy only, or make-and-buy options a firm could exercise in countering the threat of the supplier as a potential competitor in the downstream marketplace.
Year of publication: |
2010
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Authors: | Lim, Wei Shi ; Tan, Soo Jiuan |
Published in: |
European Journal of Operational Research. - Elsevier, ISSN 0377-2217. - Vol. 203.2010, 2, p. 360-369
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Publisher: |
Elsevier |
Keywords: | Outsourcing Supply chain management Supplier opportunism Game theory |
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