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Are logistics outsourcing partners more integrated in a more volatile environment?

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  • Yang, Qian
  • Zhao, Xiande

Abstract

This study examines how integration, an emerging innovative approach in inter-firm relationship management, between the vendor and the client in logistics outsourcing relationships is influenced by environmental uncertainties. Building on transaction cost theory, we develop the hypothesis that integration decreases to cope with supply volatility and technology uncertainty, and increases to cope with demand volatility and legal unenforceability. These four interrelated yet distinct characteristics jointly describe environmental uncertainties in a logistics outsourcing relationship. Our analysis of 264 such relationships suggests that integration does decrease with supply volatility and technology uncertainty and increase with demand volatility and legal unenforceability. By enhancing operational performance, integration improves outsourcing performance in terms of both financial performance and overall satisfaction. Lastly, operational performance also contributes to financial performance.

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  • Yang, Qian & Zhao, Xiande, 2016. "Are logistics outsourcing partners more integrated in a more volatile environment?," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 211-220.
    • Handle: RePEc:eee:proeco:v:171:y:2016:i:p2:p:211-220
    DOI: 10.1016/j.ijpe.2015.09.036
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    3. Qiang Xu & Qianqian Hu & Tachia Chin & Chen Chen & Yi Shi & Jianxin Xu, 2019. "How Supply Chain Integration Affects Innovation in a Digital Age: Moderating Effects of Sustainable Policy," Sustainability, MDPI, vol. 11(19), pages 1-17, October.
    4. Chao Yin & Mingyu Zhang & Yihua Zhang & Wenbing Wu, 2020. "RETRACTED ARTICLE: Business service network node optimization and resource integration based on the construction of logistics information systems," Information Systems and e-Business Management, Springer, vol. 18(4), pages 723-746, December.
    5. Hyun-Joon Jo & Timothy Connerton & Hyun-Jung Kim, 2019. "Dynamic Outsourcing Development for Sustainable Competitive Advantage in a High-Tech Backend Semiconductor Equipment Firm," Sustainability, MDPI, vol. 12(1), pages 1-13, December.
    6. Abdalla, Sara Siddig Ali, 2021. "Logistics innovation and integration: Impact on supply chain adaptability," 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 639-661, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    7. Zhu, Wenwen & Ng, Stephen C.H. & Wang, Zhiqiang & Zhao, Xiande, 2017. "The role of outsourcing management process in improving the effectiveness of logistics outsourcing," International Journal of Production Economics, Elsevier, vol. 188(C), pages 29-40.
    8. Huo, Baofeng & Ye, Yuxiao & Zhao, Xiande & Wei, Jiang & Hua, Zhongsheng, 2018. "Environmental uncertainty, specific assets, and opportunism in 3PL relationships: A transaction cost economics perspective," International Journal of Production Economics, Elsevier, vol. 203(C), pages 154-163.
    9. Yang, Qian & Geng, Ruoqi & Jiang, Yisa & Feng, Taiwen, 2021. "Governance mechanisms and green customer integration in China: The joint effect of power and environmental uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    10. Sanjeev Yadav & Sunil Luthra & Dixit Garg, 2022. "Internet of things (IoT) based coordination system in Agri-food supply chain: development of an efficient framework using DEMATEL-ISM," Operations Management Research, Springer, vol. 15(1), pages 1-27, June.
    11. Yang, Qian & Zhao, Xiande & Yeung, Hoi Yan Jeff & Liu, Yanping, 2016. "Improving logistics outsourcing performance through transactional and relational mechanisms under transaction uncertainties: Evidence from China," International Journal of Production Economics, Elsevier, vol. 175(C), pages 12-23.
    12. Ameknassi, Lhoussaine & Aït-Kadi, Daoud & Rezg, Nidhal, 2016. "Integration of logistics outsourcing decisions in a green supply chain design: A stochastic multi-objective multi-period multi-product programming model," International Journal of Production Economics, Elsevier, vol. 182(C), pages 165-184.
    13. Tse, Ying Kei & Zhang, Minhao & Zeng, Wenjuan & Ma, Jie, 2021. "Perception of supply chain quality risk: Understanding the moderation role of supply market thinness," Journal of Business Research, Elsevier, vol. 122(C), pages 822-834.

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