How multi-sourcing can influence management control: Case study evidence from the electronic products supply chain |
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| Institution: | 1. Department of Accounting and Finance, School of Business, Monash University, Malaysia;2. Department of Accounting and Business Law, McDonough School of Business, Georgetown University, Washington, D.C, 20057, USA;3. Dept. of Accountancy, Towson University, USA;4. Department of Accountancy, National Chengchi University, Taiwan;1. Department of Economics, Management, Institutions of the University of Naples Federico II, Italy;2. Department of Accounting and Economic Analyses, Nord University, Norway;1. University of South Australia, Business, Adelaide, South Australia, SA, 5000, Australia;2. Universitas Mahasaraswati Denpasar, Bali, Indonesia;3. University of Pretoria, Department of Financial Management, Hatfield, 0028, South Africa;1. University of Notre Dame Australia, Australia;2. University of Technology Sydney, Australia;1. Business School, Hunan University, Hunan Province, China;2. Renmin Business School, Renmin University of China, Beijing, China |
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| Abstract: | This study investigates how multi-sourcing can influence the use of management controls in the presence of varying buyer-supplier power dependencies. Multi-sourcing is an interorganizational design choice that can help buyers collect valuable information to facilitate cost and performance comparisons across multiple sources of supply. We leverage prior research to develop a conceptual framework that highlights how multi-sourcing can enable buyers to use cost management and performance management controls differently depending on the nature of buyer-supplier power dependencies. We then use case studies of three electronic product manufacturers to illustrate the framework, yielding empirically testable propositions regarding when multi-sourcing may enable cost management controls, performance management controls, and both types of control. The evidence demonstrates the importance of simultaneously considering multiple interorganizational design choices when studying management controls in supply chains. We also highlight how multi-sourcing may help supply chains promote non-financial goals, including those related to environmental and social activities. |
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| Keywords: | Management controls Performance management Cost management Interfirm relationships Competitive priorities Information technology industry |
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