Lead firm’s reconfiguration decision and performance of the value chain

Abstract

Purpose This paper aims to trace the performance consequences of within-lead firm reconfigurations of global value chains with respect to business performance and upgrading. Design/methodology/approach The study is based on two detailed company case studies which are analysed in an organizational design approach. Findings Lead firms systematically separate and internalize high value-added activities in otherwise low value-added processes leading to constant reconfigurations and reorganizations of the production processes in global value chains. The study finds that similar reconfigurations may trigger different changes and changes and performance consequences may differ considerably according to the level of analysis. The two cases help to understand the specific roles of the outsourcing and offshoring decisions in shaping actual global value chain structures. Originality/value The consequences of within-lead firm reconfigurations are rarely analysed in the literature.