Small firm entrepreneurial outsourcing: traditional problems, nontraditional solutions

Abstract

PurposePursuing objectives despite limited internal resources and leveraging external resources despite non‐ownership are familiar hallmarks of entrepreneurial firms. Although outsourcing is the standard way for businesses to surmount these barriers, entrepreneurial firms often lack the resources to purchase outsourcing arrangements. The purpose of this paper is to shed light on how entrepreneurial firms can better procure and benefit from outsourcing arrangements.Design/methodology/approachThe paper examines six entrepreneurial firms in a Shanghai business incubator as they undertook a variety of outsourcing arrangements. It utilizes an integrative framework based on transaction cost theory, resource dependency theory, and the resource‐based view. It then cross‐hatches those three theory bases with four outsourcing modes (full, partial, spinout, inter‐outsourcing) and case study methodology.FindingsThe paper's findings yield three novel propositions for strategic and ex ante entrepreneurial firm outsourcing activities. The propositions pertain to the exchange of non‐traditional resources, vendor‐buyer power differentials, and linkages between internal operations and external resources.Originality/valueEntrepreneurial firms stand to benefit in particularly vital ways from outsourcing arrangements. Yet, they are often severely constrained with respect to resources. Such strong need combined with limited means is a peculiarly valuable setting but only a paucity of research exists. The original study targets this important setting.

Logistics outsourcing and performance of manufacturing small and medium-sized enterprises in Nairobi

“…However, as highlighted earlier, SMEs face resource challenges, making it difficult to own capabilities that can enable efficient and effective operations (Bowen et al 2009). Some of the capabilities required by SMEs, especially in logistics, can easily be accessed through outsourcing (Murphy et al 2012). It is expected that SMEs are more likely to focus on the quality of goods and distribute widely at lower costs, resulting in improved firm performance, once they contract expert logistics service providers (LSPs) (Soinio, Tanskanen & Finne 2012).…”

“…As logistics performance becomes more significant, firms are expected to focus on their core business areas, leaving logistics to be outsourced to expert LSPs (König & Spinler 2016;Rahman & Wu 2011). Using LSPs implies that the firms (in this case manufacturing SMEs) would access the logistics capabilities they lack in-house, as they focus on their core http://www.sajesbm.co.za Open Access manufacturing activities to improve performance (König & Spinler 2016;Langley & Capgemini 2016;Murphy et al 2012). Thus, it is hypothesised that:…”

¿Por qué las Pymes externalizan sus tareas contables y fiscales?

“…La afirmación de que la escasez de recursos (inherente a la inmensa mayoría de las empresas en sus primeros años) obliga a las empresas a adoptar un modelo de externalización está ya recogida en estudios previos (Murphy et al, 2012;Kurtako, 2009;Gartner y Bellamy, 2008y Timmons y Spinelli, 2007. …”

Resource dependency and collaboration in construction supply chain: literature review and development of a conceptual framework

“…Therefore, each partner's exchange benefits are important when it comes to understanding perceptions of dependency which may be of greater importance than environmental resource or technological factors, implying that managers must evaluate both their own organisation's dependency and that of their partner's dependency to fully appreciate the exchange relationship (Fink et al, 2011). However, small firms usually do not control many of the resources necessary to run, maintain, and grow their businesses so they rely on external organisations to attain the necessary means to compete (Murphy, 2012). Therefore, in particular within the construction industry with a vastly segmented supply chain, trust and commitment are seen as a major contributing factor to a dyadic relationship success (Bretherton and Chaston, 2005).…”