Global sourcing and quality recalls: An empirical study of outsourcing-supplier concentration-product recalls linkages

This study investigates how supply chain sourcing strategies are associated with product quality recalls. In particular, the research examines how make-or-buy decisions (i.e., outsourcing), the use of foreign suppliers (i.e., offshore outsourcing), the relocation of production to offshore markets (i.e., offshoring), and decisions to consolidate supply bases (i.e., the use of few vs. myriad suppliers) are related to product recalls. Product recalls are serious quality failures in supply chains with significant, negative impacts on firm performance. Product recalls are frequently connected to the globalization of supply chains. Globalization has, at times, promoted inconsistency in quality control and standards, leading to quality problems and failures. Data across multiple industries, with widely reported recalls, have been collected and analyzed using regression techniques. Our findings indicate that offshore outsourcing has a greater impact on recalls than offshoring without outsourcing; outsourcing domestically has the least influence. Outsourcing to a smaller supplier base may lead to fewer recalls at low levels of outsourcing. However, it may exacerbate the impact of outsourcing on recalls at high levels of outsourcing.     

Complexity of Outsourcing Contracts and Ex Post Transaction Costs: An Empirical Investigation*

abstract In this article, we use Transaction Cost Economics (TCE) and the Resource‐Based View (RBV) of the firm to study outsourcing agreements. We develop an original approach of contract complexity and analyse the links among exchange hazards (i.e. specificity and environmental uncertainty), the contractual aspects of outsourcing (control, incentives, penalties, price and flexibility clauses) and the level of ex post transaction costs. Both contract complexity and ex post transaction costs are operationalized and measured. Our empirical research analyses 82 outsourcing contracts. This article uses three different dimensions (proximity to the core business, switching costs and adaptation costs) to assess the strategic importance of an outsourced activity. Our findings extend TCE's validity for the outsourcing of activities with a strategic value. Finally, this study offers an indirect measurement of ex post transaction costs. In short, to restrict vendor opportunism, contracts must contain incentives and penalties, as well as pricing and monitoring clauses.     

Bayesian inference for the gravity model

This paper seeks to empirically extend the gravity model, which has been widely used to analyze volumes of trade between pairs of countries. We generalize the basic threshold tobit model by allowing for the inclusion of country‐specific effects into the analysis and also show how one can explore the relationship between trade volumes and a given covariate via a non‐parametric approach. We use our derived methodology to investigate the impact of a particular aspect of institutions—the enforcement of contracts—on bilateral trade. We find that contract enforcement matters in predicting trade volumes for all types of goods, that it matters most for the trade of differentiated goods, and that the relationship between contract enforcement and trade in our threshold tobit exhibits some nonlinearities. Copyright © 2007 John Wiley & Sons, Ltd.     

制造企业的物流业务外包与外包联盟探讨

物流业务外包,即制造企业为集中资源、节省管理费用、增强核心竞争力而将物流业务以合同的方式委托与专业的物流公司运作。外包是一种长期的、战略的、互相渗透的、互惠互利的业务委托和合约执行方式．论文将探讨制造企业物流业务外包的原因、存在的问题以及如何正确外包,还将探讨成功建立外包联盟的因素。     

Social welfare,corruption and credibility

Abstract

Economic development requires that investments by entrepreneurs are not subject to expropriation by government. Unfortunately, public agencies often serve as the instruments by which political elites engage in corruption and extracting rents from the economy. The question is how to design institutions that credibly commit to a stable system of guarantees of property rights and contract enforcement.

Principal agent theory and the new public management favor greater accountability of public managers to elected officials or eliminating public agencies through privatization. We argue for institutional designs that provide a degree of public agency autonomy. We show that public agency autonomy is a by-product of the competition between elites in democracies with multiple veto players. We show that transparency, professionalism, and legality help ensure that public managers do not engage in rent-extraction. The institutional design problem is how to induce public managers to serve the public interest without being fully responsive to elected political officials.     

IT Outsourcing—A Source of Innovation? Microeconometric Evidence for Germany

Does IT outsourcing really influence firms' process innovativeness? We investigate this question with a distinguished view on manufacturing and service sectors. Previous studies suggest firms sourcing out IT services to external service providers are generally more process innovative. Based on a firm‐level data set comprising 1452 firms from the German manufacturing and services sectors, the econometric analysis confirms a positive and significant relationship between IT outsourcing and process innovation activity on an aggregate level. As proposed by our framework of differences between manufacturing and service firms, a more detailed analysis reveals that this positive relationship only holds for services firms. Copyright © 2016 John Wiley & Sons, Ltd.     

Unlocking the business outsourcing process model

Outsourcing has emerged as a prevalent business practice that is having a transformational impact on how many organizations manage their global supply chains. Despite this prominence, anecdotal reports from multiple reputable organizations suggest that many businesses fail to realize the benefits anticipated from their outsourcing initiatives. Motivated by these observations, this study investigates those management practices during the outsourcing process that are key drivers of outsourcing performance. Specifically, detailed data from 198 sourcing executives and managers responsible for outsourcing initiatives are used to investigate the influence that strategic evaluation, contractual completeness, and relationship management practices have on achieving projected outsourcing results. The results offer strong empirical evidence that outsourcing performance is significantly influenced by extensive strategic evaluation and proactive relationship management practices. Moreover, the impact strategic evaluation has on outsourcing performance is not direct, but rather is partially mediated by the relationship between the parties. Finally, the results show that contractual completeness does not distinguish between successful and unsuccessful outsourcing efforts, and can be considered qualifying activity.     

Do Off‐Label Drug Practices Argue Against FDA Efficacy Requirements? A Critical Analysis of Physicians' Argumentation for Initial Efficacy Requirements

The amended Food, Drug and Cosmetics Act requires efficacy certification for a drug's initial uses (“on‐label”), but does not require certification before physicians may prescribe the drug for subsequent uses (“off‐label”). Does it make sense to require FDA efficacy certification for new drugs but not for new uses of old drugs? Using a sequential online survey, we carried on a “virtual conversation” with some 500 physicians. The survey asked whether efficacy requirements should be imposed on off‐label uses; almost all physicians said no. It asked whether the efficacy requirements for initial uses should be dropped, and most physicians said no. We then asked respondents whether opposing efficacy requirements in one case but not the other involved an inconsistency. In response, we received hundreds of written commentaries. We organize and discuss these commentaries with an eye to understanding how the medical market certifies off‐label drug uses and how this compares to FDA certification. Does off‐label medicine use suggest that efficacy requirements should be placed on new uses of old drugs? Does it suggest that efficacy requirements on new drugs should be lifted? We explore these questions, and ask whether the response of many of the doctors exhibits the familiar behavior bias toward the status quo.     

服务外包伙伴关系管理研究

我国的服务外包产业正处在一个高速发展的关键时期。在面临的诸多问题中，发包商与接包商之间的关系是关系到产业健康发展的重要问题。本文在对国际国内服务外包研究作了综述以后，提出了服务外包业务合作伙伴关系可持续发展问题，并开展了相应的讨论。建立动态博弈模型，促使契约双方顺利履行契约；采用客户关系管理理论和方法，研究客户需求的满足、服务质量的保证，以及持续提高服务满意度和长期价值最大化的问题。并据此提出了一系列相应的策略和建议。     

供应链中基于质量控制的契约模型分析

供应链中的业务外包策略充分发挥了供应链节点企业的核心竞争力，但同时存在产品质量难以控制的问题。本文通过构建以价格折扣和质保金为参数的契约模型，分析了制造商在非对称信息条件下对业务外包产品进行质量控制的最优契约设计问题。     

Group Identity and the Moral Hazard Problem: Experimental Evidence

We experimentally examine how real group identity of parties (a principal and an agent) facing a moral hazard problem may attenuate the problem and thereby implement the efficient outcome. We find that, the frequency of the efficient outcome is significantly higher when both parties share the same identity than when they do not. However, when we induce a substantially weaker form of identity or increase an outside‐option payoff offered to the principal, the frequency of the efficient outcome diminishes considerably, even when the parties’ identities align perfectly. Our results have important implications for the design of nonpecuniary contract enforcement devices.     

Enforcement Releases,Firm Characteristics,and Earnings Quality: Insights from Germany's Two‐tiered Enforcement System

The implementation of a two‐tier external enforcement mechanism in Germany in 2004 permits the examination of the interrelationship of enforcement releases, firm characteristics, and earnings quality in a unique institutional framework. A total of 151 cases are examined where the announcement of errors in prior disclosed and audited financial statements was mandatorily ordered by the enforcement authority. Prior literature documents the correlation between underperformance in financial ratios and the probability of erroneous disclosure of financial statements. Evidence is provided of differences in characteristics between firms with enforcement releases and control firms as well as all German publicly listed firms. The research affirms the connection of financial ratios to earnings quality metrics. Overall, the results document the underperformance in important financial ratios as well as indicate an inferior earnings quality of firms subject to enforcement releases vis‐à‐vis the control groups. These results hold with regard to both different earnings quality specifications and different periods observed. This study adds to the earnings quality discussion and contributes to the development of a comprehensive picture of accounting quality in the unique institutional settings of Germany. The findings show that a conjoint two‐tier public and private enforcement system is effective and could be a model for consideration by other countries.     

Reputation,Trust, and Rebates: How Online Auction Markets Can Improve Their Feedback Mechanisms

Reputation systems constitute an important institution, helping sustain trust in online auction markets. However, only half of buyers leave feedback after transactions, and nearly all feedback is positive. In this paper, I propose a mechanism whereby sellers can provide rebates (not necessarily in monetary form) to buyers contingent upon buyers' provision of reports. Using a game theoretical model, I show how the mechanism can increase unbiased reporting. There exists a pooling equilibrium where both good and bad sellers choose the rebate option, even though their true types are revealed through feedback. The mechanism also induces bad sellers to improve the quality of the contract.     

设备维护外包服务商绩效评估指标研究

探讨了基于外包合同的设备维护业务外包服务商的绩效评估指标问题,指出设备维护外包合同是外包服务商绩效评估的基准。根据外包合同的基本要素的性质,构建了设备维护外包服务商绩效评估指标体系,以指标实现值与合同目标值为基础,提出了各指标的度量方法。     

Learning from R&D outsourcing vs. learning by R&D outsourcing

We analyze how research and development (R&D) outsourcing influences product innovation. We propose a separation between learning from R&D outsourcing, whereby the firm improves its ability to innovate by using outsourced R&D directly in new products, from learning by R&D outsourcing, whereby the firm indirectly uses outsourced R&D by integrating it with internal R&D to create new products. Building on the knowledge-based view, we argue that learning from R&D outsourcing is likely to have an inverse U-shaped relationship with product innovation, because the initial benefits of using outsourced component R&D knowledge to innovate products is eventually outweighed by the hollowing out of the firm's ability to innovate. In contrast, we propose that learning by R&D outsourcing is likely to have a U-shaped relationship with product innovation, because the initial challenges of integrating internal and external R&D are eventually overcome, resulting in more innovations. Finally, we distinguish between domestic and foreign R&D outsourcing and propose a liability of foreignness in R&D outsourcing as it has a lower impact on new products than domestic R&D outsourcing. The empirical analysis shows that outsourced R&D has an inverted U-shaped relationship with the number of new products, while the interaction between outsourced R&D and internal R&D has a U-shaped relationship with the number of new products. It also shows that domestic outsourced R&D has a higher positive impact on the number of new products than foreign outsourced R&D.     

Outsourcing to a non-developed supplier market: The importance of operational aspects in outsourcing

This article investigates how firms manage outsourcing in situations of a non-developed supplier market. This study followed the initial outsourcing activities and strategies of two case companies in the wood product manufacturing industry. The findings show that greater focus needs to be placed on operational aspects associated with non-developed supplier markets, which contrasts with the traditional strategic view of outsourcing. For practitioners, this article suggests that it is important to emphasise that the learning curve for a supplier can be lengthy, and also that alternative outsourcing routes are available when outsourcing to a non-developed supplier market.     

Information systems outsourcing: Replicating an existing framework in a different cultural context

In order for any field of study to refine the promising concepts and weed out the weaker concepts it is necessary that researchers revisit earlier studies from time to time and evaluate their general applicability to new contexts. Replication is an important technique for researchers to embrace in order to achieve this goal. In this study, we test one of the frameworks of technology outsourcing developed in the West, by changing the cultural context. Following Kodak's historic outsourcing decision, technology outsourcing has assumed significant importance among researchers and practitioners. Most of the research in relation to technology outsourcing has been conducted in the Western culture (including the USA and the UK), so our goal in this study is to extend the understanding of technology outsourcing research conducted in the West to another culture-that of Korea, through replication.We focused on information systems (IS) outsourcing decision making as a case in point and found both similarities and dissimilarities in relation to the current understanding of the same. These similarities and differences in turn, reveal the distinctions between the Western and the Korean approaches toward achieving outsourcing success. The similarities are the partial preference for short-term contracts and contracting out to external vendors. However, the two cultures differed in their decision making in the way they pursue contractual completeness, whether in-house departments competes or not, design of contract to include partnership measures, criticality of tasks outsourced, familiarity with the outsourced task, postponing a few outsourcing decisions, and withholding a piece of a contract as bait. We also found “trust” and “task partitioning to gain advantage of varied expertise” to be important for achieving outsourcing success in the Korean organization. In addition, we observed that outsourcing success is achieved by maximizing reliability and relationship in the Korean context rather than by maximizing flexibility and control, as was observed in the Western context. We argue that this difference is a function of cultural diversity.     

Competition, Imperfect Competition, and Dynamic Market Processes

Abstract . Contrary to the conventional hypothesis, the structural elements on the supply side of free product markets are not stable. The variability in the structures of free markets is readily apparent in an appropriate analysis of the emergence, growth, and maturity of free product markets. In this analysis, supply-side entrepreneurship plays a prominent role—one which is only imputed to entrepreneurship in the conventional specification of market conditions. In order to correct this deficiency in the conventional specification, an alternative specification is summarized in which are treated explicitly the effects of entrepreneurial activity with respect to the discovery and development of economically feasible new products and processes and the choice of and variations in the quality characteristics of the products of individual firms. This indicates that firms can and do influence the stage of development—and hence the related size—of a market and their relative shares of it by new product and process development and the quality of their output. In this way entrepreneurial activity affects particular product market structures.     

Multitasking,Information Disclosure,and Product Quality: Evidence from Nursing Homes

This paper uses a mandatory quality disclosure policy, the Nursing Home Quality Initiative (NHQI), to investigate how quality ‘report cards’ affect firms’ choices of multidimensional product quality. I show that after the introduction of NHQI: (1) scores of quality measures improve for the reported dimensions but deteriorate for the unreported ones; (2) there is no evidence that nursing homes decrease quality‐related inputs; (3) consumer demand becomes sensitive to changes in the NHQI quality measures. These findings are consistent with the multitasking hypothesis that firms may respond to information disclosure by reallocating effort across dimensions of quality without necessarily increasing overall quality.     

企业物流外包战略中的合同管理问题研究

存界定物流外包合同管理的范围和功能的基础上，提出外包合川管理必须遵循全面、严格、灵活三个原则；分析了外包合同管理的常见误区；最后针对物流外包提出了改善外包合同管理的建议。