An optimal level of technology reliance on foreign partners in a global sourcing partnership: components procurement, technology management and market performance

Abstract

Existing studies on global sourcing strategy have implicitly adopted a closed-systems perspective in which sourcing activities are managed within a multinational company across national boundaries. Product and process innovations and components procurement that are jointly managed by a consortium of cooperating firms have not been examined. In this paper, we empirically examine the issues concerning sourcing partnerships in an open-systems perspective. Findings suggest that even in a sourcing partnershiparrangement with a foreign supplier, the principal firm's ability to procure and control the supply of major components has a positive bearing on its market performance.