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Reconceptualizing plural sourcing

Firms often procure the same input via multiple means, e.g., making and buying. Recent papers exploring such concurrent sourcing modes have yielded rich, but inconsistent, theoretical and empirical insights. We suggest that resolving these inconsistencies and setting the foundation for future work requires reconceptualizing two aspects of concurrent sourcing: what and how. “What” refers to a surprising lack of clarity of what is meant by “same” inputs. We reconceptualize “same” as a spectrum of degrees of similarity and propose how similarity might be measured. “How” refers to the governance modes combined in concurrent sourcing. Extending the literature’s predominant focus on make/buy, we reconceptualize concurrent sourcing as a set of combined governance modes—make/buy, make/ally and buy/ally—distinguished from single modes of governance by certain shared characteristics, but differing from each other in their capabilities and limitations. We demonstrate the potential of our reconceptualization with propositions predicting the use of concurrent sourcing and choice of specific concurrent sourcing modes as a function of similarity, technological volatility and performance ambiguity. Concurrently reconceptualizing “what” and “how” resolves strains between existing studies and strengthens the foundation for future work. Furthermore, enhanced understanding of the trade-offs and synergies among governance modes generates theoretical, empirical and managerial insights relevant to governance choice situations beyond concurrent sourcing itself.

Krzeminska A, Hoetker G, Mellewigt T. 2013. Reconceptualizing plural sourcing. Strategic Management Journal 34: 1614-1627
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