An Empirical Investigation of Global Sourcing Strategy Effectiveness

Abstract

SUMMARY This study was undertaken to address the need for empirical research on global sourcing strategy effectiveness. This article establishes the importance of and relationships between several factors that drive the effectiveness of global sourcing strategies. Companies are increasingly viewing global sourcing strategies as a means of reducing cost, increasing quality, and enhancing a firm's overall competitive position. This article uses a structural equation modeling methodology to test an explanatory model of global sourcing strategy effectiveness. Results indicate that global sourcing structures and processes, global sourcing business capabilities, international language capabilities, and top management commitment to global sourcing are critical to the effectiveness of a global sourcing strategy.

International purchasing offices in China: roles and resource/capability requirements

“…Monczka and Giunipero (1984) The importance of top management support/commitment is also emphasised by Petersen et al (2000), Rajagopal and Bernard (1994), and Trent and Monczka (2005).…”

“…It reduces possible failures determined by cultural distance. Petersen et al, 2000;Monczka, 2002, 2005) Clear description of the processes and their interdependences. Definition of processes' goals, milestones and budgets.…”

“…Adequate information technology solutions (adapted from: Petersen et al, 2000;Monczka and Giunipero, 1984;Monczka, 2002, 2005) Presence of structured data warehouses. Availability of technologies for a non-stop access to core data.…”

“…Advanced skills of employees (adapted from: Petersen et al, 2000;Trent and Monczka, 2002, 2003, 2005 Availability in the IPOs of employees skilled on team building, strategic planning, communication, technical, and financial aspects.…”

“…Cross-cultural adaptation (adapted from: Monczka and Giunipero, 1984;Petersen et al, 2000;Jia and Rutherford, 2010;Jia and Lamming, 2013) Recruitment of employees able to comprehend foreign cultures and to mediate with the domestic one.…”