Coordinating Platform-Based Multi-Sourcing: Introducing the Theory of Convention

Spurred by the consumer market, companies increasingly deploy smartphones or tablet computers in their operations. However, unlike private users, companies typically struggle to cover their needs with existing applications, and therefore expand mobile software platforms through customized applications from multiple software vendors. Companies thereby combine the concepts of multi-sourcing and software platform ecosystems in a novel platform-based multi-sourcing setting. This implies, however, the clash of two different approaches towards the coordination of the underlying one-to-many inter-organizational relationships. So far, however, little is known about impacts of merging coordination approaches. Relying on convention theory, we addresses this gap by analyzing a platform-based multi-sourcing project between a client and six software vendors, that develop twenty-three custom-made applications on a common platform (Android). In doing so, we aim to understand how unequal coordination approaches merge, and whether and for what reason particular coordination mechanisms, design decisions, or practices disappear, while new ones emerge.

The Impact of Human Asset Specificity on the Sourcing of Application Services

The question concerning the circumstances under which it is advantageous for a company to outsource certain information systems functions has been a controversial issue for the last decade. While opponents emphasize the risks of outsourcing based on the loss of strategic potentials and increased transaction costs, proponents emphasize the strategic benefits of outsourcing and high potentials of cost-savings. This paper brings together both views by examining the conditions under which both the strategic potentials as well as savings in production and transaction costs of developing and maintaining software applications can better be achieved in-house as opposed to by an external vendor. We develop a theoretical framework from three complementary theories and test it empirically based on a mail survey of 139 German companies. The results show that insourcing is more cost efficient and advantageous in creating strategic benefits through IS if the provision of application services requires a high amount of firm specific human assets. These relationships, however, are partially moderated by differences in the trustworthiness and intrinsic motivation of internal versus external IS professionals. Moreover, capital shares with an external vendor can lower the risk of high transaction costs as well the risk of loosing the strategic opportunities of an IS.

Auswirkungen des Global Sourcing im Hinblick auf das Risikomanagement

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Sourcing the news: Teaching journalism students different approaches to sourcing practices

The experiences of a group of Australian university journalism students from diverse backgrounds are explored as they become involved in producing five editions of a new newspaper for the isolated community of Blackall in the Queensland Outback, 1500km north-west of Sydney. During this learning experience, non-traditional journalistic sourcing methods were trialled. This paper documents the exercise, compares the alternative methods with existing practices identified in the literature, and examines the effects and consequences of the exercise.

The importance of clusters for spillovers from foreign direct investment and technology sourcing

This paper examines the link between cluster development and inward foreign direct investment. The conventional policy approach has been to assume that inward foreign direct investment (FDI) can stimulate significant clustering activity, thus generating significant spillovers. This paper, however, questions this and shows that, while clusters can generate significant productivity spillovers from FDI, this only occurs in pre-existing clusters. Further, the paper demonstrates that foreign-owned firms that enter clusters also appropriate spillovers when domestic firms undertake investment, raising the possibility that clusters are important locations for so called technology, or knowledge sourcing activities by MNEs. © 2006 Oxford University Press.

Evaluating approaches to product design and sourcing decisions in multinational companies

Product design and sourcing decisions are among the most difficult and important of all decisions facing multinational manufacturing companies, yet associated decision support and evaluation systems tend to be myopic in nature. Design for manufacture and assembly techniques, for example, generally focuses on manufacturing capability and ignores capacity although both should be considered. Similarly, most modelling and evaluation tools available to examine the performance of various solution and improvement techniques have a narrower scope than desired. A unique collaboration, funded by the US National Science Foundation, between researchers in the USA and the UK currently addresses these problems. This paper describes a technique known as Design For the Existing Environment (DFEE) and an holistic evaluation system based on enterprise simulation that was used to demonstrate the business benefits of DFEE applied in a simple product development and manufacturing case study. A project that will extend these techniques to evaluate global product sourcing strategies is described along with the practical difficulties of building an enterprise simulation on the scale and detail required.

Technology sourcing versus technology exploitation:An analysis of US foreign direct investment flows

The traditional paradigm of foreign direct investment (FDI) suggests that FDI is undertaken principally to exploit some firm-specific advantage in a foreign country which provides a locational advantage to the investor. However, recent theoretical work suggests a model of FDI in which the motivation is not to exploit existing technological advantages in a foreign country, but to access such technology and transfer it from the host economy to the investing multinational corporation via spillover effects. This paper tests the technology sourcing versus technology exploiting hypotheses for a panel of sectoral FDI flows between the United States and major OECD nations over a 15 year period. The research makes use of Patel and Vega's (Research Policy, 28, 145-55, 1999) taxonomy of sectors which are likely a priori to exhibit technology sourcing and exploiting behaviour respectively. While there is evidence that FDI flows into the United States are attracted to R and D intensive sectors, very little support is found for the technology sourcing hypothesis either for inward or outward FDI flows. The results suggest that, in aggregate, firm-specific 'ownership' effects remain powerful determinants of FDI flows.

Who gains from whom? Spillovers, competition and technology sourcing in the foreign-owned sector of UK manufacturing

There is a growing literature explaining foreign direct investment flows in terms of 'technology sourcing', whereby multinational firms invest in certain locations not to exploit their firm-specific assets in the host environment, but to access technology that is generated by host country firms. However, it is far from clear whether the literature has found significant evidence of such activity beyond a few isolated examples. This paper extends this work by allowing for the possibility of multinational enterprises (MNEs) sourcing technology not only from host country firms but also from each other within a host economy. The paper demonstrates that MNEs in the UK do indeed appropriate spillovers both from indigenous firms and from other foreign investors, but that there are also significant competition effects that act to reduce productivity in certain industries. The paper also explores which countries' affiliates gain most from technology sourcing in the UK, and which generate the greatest spillovers within the foreign-owned sector. © Scottish Economic Society 2005.

Foreign direct investment, technology sourcing and reverse spillovers

Recent theoretical work points to the possibility of foreign direct investment motivated not by 'ownership' advantages which may be exploited by a multinational enterprise but by the desire to access the superior technology of a host nation through direct investment. To be successful, technology sourcing foreign direct investment hinges crucially on the existence of domestic-to-foreign technological externalities within the host country. We test empirically for the existence of such 'reverse spillover' effects for a panel of UK manufacturing industries. The results demonstrate that technology generated by the domestic sector spills over to foreign multinational enterprises, but that this effect is restricted to relatively research and development intensive sectors. There is also evidence that these spillover effects are affected by the spatial concentration of industry, and that learning-by-doing effects are restricted to sectors in which technology sourcing is unlikely to be a motivating influence.

Manufacturing sourcing practices and relationships

Product-sourcing practices can impact the competitiveness of an organization's products and services. Many sourcing practices exist and the challenge is to find the right practice, for the right product, at the right time. This paper describes a survey of 3,500 of UK companies, and reports on current and intended manufacturing sourcing practices; the associated decision-making processes; and, the principal motives behind sourcing decisions. Key findings demonstrate a strong and ambitious trend towards open, integrated relationships between manufacturers and their principal suppliers; sourcing decisions increasingly based on well-structured analysis of business needs and capabilities; and, the chief motivators being financial and market factors.

UK sourcing practices and relationships

Many factors impact on the competitiveness of a manufacturer's products and services, and amongst the most influential are product-sourcing practices. The challenge to an organisation is to choose the right sourcing practice, for the right product, at the right time. The authors present the latest industrial trends.