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A Review of Production and Operations Management Research on Outsourcing in Supply Chains: Implications for the Theory of the Firm

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  • Andy A. Tsay
  • John V. Gray
  • In Joon Noh
  • Joseph T. Mahoney

Abstract

This paper reviews the state of the art in Productions and Operations Management (POM) academic research regarding outsourcing in supply chain contexts. We first acknowledge the “Theory of the Firm” (ToF), the venerable and vast body of thought regarding where the firm draws the boundary between what it performs in‐house and what it outsources. Despite the clear linkage between outsourcing and POM, the ToF literature is most closely associated with the fields of strategy and economics. This disconnect might in part be due to a difference in theoretical lenses and terminology, which we address for the POM audience by providing a ToF tutorial. Our review of publications by the POM community from 2000 to 2016 includes a framework that organizes the in‐scope papers and a structured summary of each work. We partition the research into empirical/conceptual and analytical sub‐literatures, each of which gets its own critical assessment and discussion of open opportunities. Along the way, we articulate the features of the POM lens that distinctively position POM researchers to contribute further to the ToF, a convergence which we hope to encourage through this study. A deeper conversation among strategy, economics, and POM would enrichen the rigor and the relevance of each field.

Suggested Citation

  • Andy A. Tsay & John V. Gray & In Joon Noh & Joseph T. Mahoney, 2018. "A Review of Production and Operations Management Research on Outsourcing in Supply Chains: Implications for the Theory of the Firm," Production and Operations Management, Production and Operations Management Society, vol. 27(7), pages 1177-1220, July.
    • Handle: RePEc:bla:popmgt:v:27:y:2018:i:7:p:1177-1220
    DOI: 10.1111/poms.12855
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    Cited by:

    1. Fracarolli Nunes, Mauro & Lee Park, Camila & Shin, Hyunju, 2021. "Corporate social and environmental irresponsibilities in supply chains, contamination, and damage of intangible resources: A behavioural approach," International Journal of Production Economics, Elsevier, vol. 241(C).
    2. Dazhong Wu & Michael Tannen & Julius Anyu & Sergey Ivanov & Feng Xu, 2023. "Contract manufacturing, market competition, and labor productivity in US manufacturing industries," Operations Management Research, Springer, vol. 16(1), pages 377-390, March.
    3. Lee, Kyung Yul & Jung, Hyun Ju & Kwon, Youngsun, 2024. "Boundary-spanning technology search, product component reuse, and new product innovation: Evidence from the smartphone industry," Research Policy, Elsevier, vol. 53(4).
    4. Junaid, Muhammad & Zhang, Qingyu & Cao, Mei & Luqman, Adeel, 2023. "Nexus between technology enabled supply chain dynamic capabilities, integration, resilience, and sustainable performance: An empirical examination of healthcare organizations," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    5. Janina Grabs, 2023. "A theory of credible cross‐temporal corporate commitments as goal‐based private sustainability governance," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5146-5160, December.
    6. Mikko Ketokivi & Joseph T. Mahoney, 2020. "Transaction Cost Economics As a Theory of Supply Chain Efficiency," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 1011-1031, April.
    7. Sining Song & Yan Dong & Thomas Kull & Craig Carter & Kefeng Xu, 2023. "Supply chain leakage of greenhouse gas emissions and supplier innovation," Production and Operations Management, Production and Operations Management Society, vol. 32(3), pages 882-903, March.
    8. Kovach, Jeremy J. & Swink, Morgan & Rodriguez, Mauricio, 2023. "A novel measure of firm-level production outsourcing," International Journal of Production Economics, Elsevier, vol. 263(C).
    9. João Paulo Santos Aragão & Marcele Elisa Fontana, 2022. "Outsourcing Strategies in Public Services under Budgetary Constraints: Analysing Perceptions of Public Managers," Public Organization Review, Springer, vol. 22(1), pages 61-77, March.
    10. Niu, Baozhuang & Chen, Yuyang & Zeng, Fanzhuo, 2023. "One step further for procurement cooperation: Will the industry leader benefit from its competitive manufacturer's joint determination of consumption quality?," European Journal of Operational Research, Elsevier, vol. 311(3), pages 989-1008.
    11. Jason Miller & Keith Skowronski & John Saldanha, 2022. "Asset ownership & incentives to undertake non‐contractible actions: The case of trucking," Journal of Supply Chain Management, Institute for Supply Management, vol. 58(1), pages 65-91, January.
    12. Brandl, Tim, 2021. "Managing contract manufacturing relationships - An explorative research framework," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Ringle, Christian M. & Blecker, Thorsten (ed.), Adapting to the Future: How Digitalization Shapes Sustainable Logistics and Resilient Supply Chain Management. Proceedings of the Hamburg Internationa, volume 31, pages 103-127, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    13. Nisha Paul Kulangara & Markus Biehl & Edmund L. Prater, 2022. "Environmentally sustainable development initiatives in upstream strategic outsourcing relationships: Examining the role of innovative capabilities," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3014-3027, November.
    14. Christian Weckenborg & Karsten Kieckhäfer & Thomas S. Spengler & Patricia Bernstein, 2020. "The Volkswagen Pre-Production Center Applies Operations Research to Optimize Capacity Scheduling," Interfaces, INFORMS, vol. 50(2), pages 119-136, March.
    15. Mei, Maggie Qiuzhu & Wang, Le & Yan, Jie, 2023. "Maintaining product quality consistency when offshoring to emerging markets: The role of subsidiary control," Journal of International Management, Elsevier, vol. 29(1).
    16. Subodha Kumar & Rakesh R. Mallipeddi, 2022. "Impact of cybersecurity on operations and supply chain management: Emerging trends and future research directions," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4488-4500, December.
    17. Nitin Joglekar & Edward G. Anderson & Kyungmin (Brad) Lee & Geoffrey Parker & Ettore Settanni & Jagjit Singh Srai, 2022. "Configuration of digital and physical infrastructure platforms: Private and public perspectives," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4515-4528, December.
    18. Michael I.C. Nwogugu, 2019. "Complex Systems, Multi-Sided Incentives and Risk Perception in Companies," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-44704-3.
    19. Benjamin Lawrence & Jie J. Zhang & Liwu Hsu & Sarah Zheng, 2021. "Return on Investments in Hotel Franchising: Understanding Moderating Effects of Franchisee Dependence," Production and Operations Management, Production and Operations Management Society, vol. 30(8), pages 2420-2440, August.
    20. Karabay, Bilgehan, 2022. "A new dimension in global value chains: Control vs. delegation in input procurement," Journal of International Economics, Elsevier, vol. 137(C).
    21. Ying Zhang & Jayashankar M. Swaminathan, 2020. "Warehouse Location in An Emerging Country: A Win–Win Proposition?," Production and Operations Management, Production and Operations Management Society, vol. 29(6), pages 1487-1505, June.
    22. Yang, Yuxiang & Goodarzi, Shadi & Jabbarzadeh, Armin & Fahimnia, Behnam, 2022. "In-house production and outsourcing under different emissions reduction regulations: An equilibrium decision model for global supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    23. Deng, Sijing & Xu, Jiayan, 2023. "Manufacturing and procurement outsourcing strategies of competing original equipment manufacturers," European Journal of Operational Research, Elsevier, vol. 308(2), pages 884-896.
    24. Sarosh Kuruvilla & Chunyun Li, 2021. "Freedom of Association and Collective Bargaining in Global Supply Chains: A Research Agenda," Journal of Supply Chain Management, Institute for Supply Management, vol. 57(2), pages 43-57, April.

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