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Outsourcing Intensity, Strategy, And Growth In Entrepreneurial Firms

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  • J. B. ARBAUGH

    (College of Business Administration, University of Wisconsin Oshkosh, USA)

Abstract

This study examines the relationship between outsourcing practices, firm strategy and growth in SMEs. The sample for this study was the Entrepreneur of the Year (EOY) database co-developed by the Kauffman Center for Entrepreneurial Leadership and Ernst & Young. I found that while 83% of the firms engaged in some outsourcing practice, 71.5% of the firms outsourced three or fewer activities. Differing activities were significantly associated with growth depending on whether firm growth was measured in relative or absolute terms, suggesting that outsourcing preferences may be highly influenced by firm size. The results of this study suggest that while outsourcing is commonly practiced among high-performing SMEs, it is generally done to allow the firm to focus on its core activities rather than directly supporting their growth strategies.

Suggested Citation

  • J. B. Arbaugh, 2003. "Outsourcing Intensity, Strategy, And Growth In Entrepreneurial Firms," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 11(02), pages 89-110.
    • Handle: RePEc:wsi:jecxxx:v:11:y:2003:i:02:n:s0218495803000068
    DOI: 10.1142/S0218495803000068
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    Cited by:

    1. P. Everaert & G. Sarens & J. Rommel, 2006. "Sourcing of Accounting: Evidence from Belgian SMEs," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/403, Ghent University, Faculty of Economics and Business Administration.
    2. György Ottilia & Madaras Szilárd, 2020. "Factors Influencing SME Outsourcing: Evidence from Romania," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 8(1), pages 5-18, October.
    3. Hasliza Abdul Halim & Noor Hazlina Ahmad & Theresa C. F. Ho & T. Ramayah, 2017. "The Outsourcing Dilemma on Decision to Outsource Among Small and Medium Enterprises in Malaysia," Global Business Review, International Management Institute, vol. 18(2), pages 348-364, April.
    4. Irwin, Kristin C. & Landay, Karen M. & Aaron, Joshua R. & McDowell, William C. & Marino, Louis D. & Geho, Patrick R., 2018. "Entrepreneurial orientation (EO) and human resources outsourcing (HRO): A “HERO” combination for SME performance," Journal of Business Research, Elsevier, vol. 90(C), pages 134-140.
    5. P. Everaert & G. Sarens & J. Rommel, 2006. "Outsourcing of Accounting Tasks in SMEs: An extended TCE Model," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/409, Ghent University, Faculty of Economics and Business Administration.

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