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Make or Buy in a mature industry? Models of client-supplier relationships under TCT and RBV perspectives

Author

Listed:
  • Manuel Portugal Ferreira

    (Escola Superior de Tecnologia e Gestão - Instituto Politécnico de Leiria)

  • Fernando A. Ribeiro Serra

    (UNISUL ? Universidade do Sul de Santa Catarina)

Abstract

In this paper, we use the transaction cost theory (TCT) and the resource-based view (RBV) to discuss three propositions on the models of client-supplier relationships in mature industries. The two theories seem to advance different organizational forms of the client-supplier relationships, and in some instances contradictory. How should firms organize to prosper and grow, namely in the international markets? Through the case study of three Portuguese packaging firms, with primary (interviews) and secondary data, we discuss how the three firms deploy three distinct strategic organization models in a mature industry. One firm utilizes market-based governance mechanisms, and concentrates its production in a few selected locations. Another firm vertically integrates almost the entire value chain of the product to provide full service to its clients. The third firm operates in a model of integrated outsourcing, with the installation "wall to wall" to its clients. The models client-supplier assumed by these firms are based on efficient, stable, and trustworthy relationships, that permit the focus on their core competences and the reduction of the transaction costs. Firms? superior performance requires a proper alignment of hierarchical and relational governance taking in consideration the dimensions of the transactions.

Suggested Citation

  • Manuel Portugal Ferreira & Fernando A. Ribeiro Serra, 2009. "Make or Buy in a mature industry? Models of client-supplier relationships under TCT and RBV perspectives," Working Papers 37, globADVANTAGE, Polytechnic Institute of Leiria.
    • Handle: RePEc:pil:wpaper:37
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    References listed on IDEAS

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    Cited by:

    1. Manuel Aníbal Silva Portugal Vasconcelos Ferreira & Nuno Rosa Reis & Fernando A. Ribeiro Serra & Benny Kramer Costa, 2014. "Understanding the Footprint of the RBV in International Business Studies: the Last Twenty Years of Research," Brazilian Business Review, Fucape Business School, vol. 11(4), pages 53-83, August.
    2. Manuel Portugal Ferreira & Nuno Rosa Reis & Fernando Ribeiro Serra & Benny Kramer Costa, 2013. "Understanding the footprint of the RBV in International Business studies: The last twenty years of research," Working Papers 96, globADVANTAGE, Polytechnic Institute of Leiria.
    3. Rodrigo Martins & Fernando Ribeiro Serra & André da Silva Leite & Manuel Portugal Ferreira & Dan Li, 2010. "Transactions Cost Theory influence in strategy research: A review through a bibliometric study in leading journals," Working Papers 61, globADVANTAGE, Polytechnic Institute of Leiria.
    4. Manuel Portugal Ferreira & Fernando A. Ribeiro Serra & Benny Kramer Costa, 2011. "The RBV in International Business Studies: A bibliometric study of Barney?s (1991) contribution to the field," Working Papers 82, globADVANTAGE, Polytechnic Institute of Leiria.

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    More about this item

    Keywords

    Client-supplier relationship models; Outsourcing; TCT; RBV; Strategic Governance;
    All these keywords.

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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