Auteur
Valérie MOATTI
Abstract
Low cost sourcing… or high cost supplying?
Sourcing from low cost countries is today at the agenda of most manufacturing companies whatever their size or industry: for some of them, it is in place already while others are seriously considering the project for the years to come. However, traditional strategic management theories of international management and multinational companies – mainly based on transaction costs and resource-based theoretical backgrounds- fail at fully explaining such trend. We therefore suggest alternative explanations, specifically related to organizational isomorphism. The first results of our empirical study (including a quantitative survey on a sample of 150 firms and a qualitative part with 20 in-depth interviews) on the impact of sourcing manufactured products from low cost countries –done in partnership with the consulting firm BearingPoint and Supply Chain Magazine in 2006- confirm these
contradictory trends. On the one hand, companies tend to increase offshoring. On the other hand, they recognize that offshoring raises many management issues as well as additional costs across the supply chain. If our world appears to be “flat” thanks to the development of information technologies and systems, as well as the emergence of innovative organizational forms (Friedman 2005), products still need to be handled and carried, thus limiting the impact of virtual distance reduction. We therefore suggest that offshoring decision is often guided by isomorphism and try to formulate a tentative framework to help companies decide what products to offshore.
