The Dynamics of the Outsourcing Relationship

What lies between market and hierarchy? Insights from internalization theory and global value chain theory

“…These GVC activities may be internalized within MNEs, but there is evidence of substantial externalization (outsourcing) of many activities worldwide across a range of industrial sectors including garments, footwear, toys, electronics, pharmaceuticals, and vehicles (UNCTAD, 2011). The clearest examples are seen in firms that perform few or no manufacturing activities: notable examples include Apple (Dedrick, Kraemer & Linden, 2010;Denicolai, Strange & Zucchella, 2015) and Nike (Donaghu & Barff, 1990). They have outsourced much or all of their manufacturing or never engaged in manufacturing in the first place.…”

A Reverse Perspective on Global Value Chains: Implications from the Internationalization of Rising Emerging Market Firms

“…Possible information and power asymmetries may therefore arise between the lead firm and its partners must not be denied, however, especially when those GVC key partners still retain operational autonomy under the high-powered incentives of the market (Kano, 2018). As such, the power dynamics in a GVC may change accordingly because of evolving FSAs (Strange, 2011) and are subject to the continuous change of key partners' mutual dependence (Denicolai, Strange & Zucchella, 2015). Liena Kano (2018) took the much-cited case of Apple's value chain as an example of global factory-style GVC.…”

“…Nevertheless, Kano also astutely recognized the lessening of power asymmetries in Apple's GVC between Apple and Foxconn with increasing bilateral dependence, as Foxconn has recently upgraded its capabilities to key production intermediary (Kano, 2018). Moreover, Foxconn has diversified its customer portfolio to lessen the power asymmetries in Apple's GVC, while the interdependence between Apple and Foxconn is yet still increasing (Denicolai et al, 2015). These shifts of power are bringing new challenges into GVC, but also signify a rising force from EMNE suppliers that demonstrates trickle-up mechanisms such as reverse innovation (Govindarajani & Ramamurti, 2011).…”

“…As EM suppliers retained operational autonomy and began conducting vertical integration in the past few decades to take control over certain critical production processes, it is reasonable to assume that power asymmetry may arise for those suppliers to gain access to the lead firm's think tank of FSAs, such as brand names and capabilities (Kano, 2018). Position alone does not enable value creation, however, nor is such a position guaranteed any stability (Denicolai et al, 2015). Here, considering that the lead firms can deploy entrepreneurial activity for the purpose of the long-term cooperative relationship, we summarize the implications collected from the cases of EM suppliers on how to secure the position from GVC to continue the multiple interactions that occur in the realm of strategic arrangements, which go beyond arm's length transactions.…”

Explorando relación entre innovación e internacionalización de PYMEs Catalanas: Determinantes de la capacidad de innovación

“…La interrelación de la innovación, la internacionalización y el emprendimiento es un campo de estudio con una serie de vacíos en la investigación donde la relación de causalidad entre ellas es controvertida (Hagen et al, 2014). Una gran cantidad de literatura argumenta que las empresas internacionales tienden a explotar sus capacidades innovadoras en varios mercados (Pla-Barber y Alegre, 2007;Kafouros et al, 2008;Cassiman y Golovko, 2011;Denicolai et al, 2014). Otros estudios argumentan que la relación entre la innovación y la internacionalización es casi insignificante e incluso negativa (Hitt et al, 1997).…”