Specific match between specific types of strategic flexibility and sourcing strategy: Another strategic approach to build competitive advantage

• Main Author: Hilman H., Mohamed Z.A.
• Format: Article
• Language: English
• Published: 2017
• Subjects: Buy; Make; Organisational performance; Related product diversification; Sourcing; Strategic flexibility; Unrelated product diversification
• Online Access: http://ddms.usim.edu.my:80/jspui/handle/123456789/15449

Strategic flexibility, sourcing strategy and organisational performance are often a source of contention among firms in manufacturing sectors. This paper explores effects of specific types of strategic flexibility and product diversifications (related and unrelated) on strategic sourcing of make and buy. Questionnaires were sent to top management personnel of firms in four manufacturing sectors namely electrical and electronics, chemicals (including petroleum), food and beverages and fabricated metal. The results confirmed that the make or buy sourcing strategy acts as mediators and it partially does so on the relationship between related product diversification strategy and organisational performance. In addition, the buy strategy mediated partially the relationship between unrelated product diversification strategy and organisational performance. These findings go along with the theories that support both constructs, Industrial Organisation (IO) Theory, Transaction Cost Theory and Resource-Based View (RBV). All these findings should enable practitioners to make better manufacturing and sourcing decisions. Copyright © 2013 Inderscience Enterprises Ltd.