Developing a Theoretical Framework for Logistics Outsourcing

In this paper, the authors present an examination of the theoretical foundations for outsourcing. They apply these theoretical foundations to explain why organizations outsource logistics, and them examines if the benefits are primarily cost-based, resource-based, or strategic in nature. The authors first discuss a number of theoretical perspectives for logistics outsourcing. These perspectives are then compared and contrasted. A theoretical framework is then provided for logistics outsourcing in which the varying perspectives are integrated. The authors conclude with observations regarding the theoretical and practitioner applications of logistics outsourcing.

[1]  R. Coase.  The Nature of the Firm , 1937 .

[2]  J. Stock.  Applying theories from other disciplines to logistics , 1997 .

[3]  R. Caves,et al.  Economic Analysis and the Quest for Competitive Advantage , 1984 .

[4]  T. Skjøtt-Larsen,et al.  Early Supplier Involvement: Implications for New Product Development Outsourcing and Supplier-Buyer Interdependence , 2003 .

[5]  R. Westbrook,et al.  New Strategic Tools for Supply Chain Management , 1991 .

[6]  R. Grant.  The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation , 1991 .

[7]  J. Johanson,et al.  Interorganizational relations in industrial systems: a network approach compared with the transaction cost approach , 1987 .

[8]  Akira Takeishi,et al.  Bridging inter‐ and intra‐firm boundaries: management of supplier involvement in automobile product development , 2001 .

[9]  Jan B. Heide,et al.  Do Norms Matter in Marketing Relationships? , 1992 .

[10]  W. Dugger.  The Economic Institutions of Capitalism , 1987 .

[11]  M. J. Earl,et al.  The Risks of Outsourcing IT , 1996 .

[12]  J. H. Dyer.  Does Governance Matter? Keiretsu Alliances and Asset Specificity as Sources of Japanese Competitive Advantage , 1996 .

[13]  A. Rasheed,et al.  Making More by Doing Less: An Analysis of Outsourcing and its Effects on Firm Performance , 2000 .

[14]  H. Demsetz.  The Theory of the Firm Revisited , 1988 .

[15]  M. Porter.  Competitive Advantage: Creating and Sustaining Superior Performance , 1985 .

[16]  H. Gleason.  A NEW DICTIONARY , 1935 .

[17]  Jan B. Heide,et al.  ALLIANCES IN INDUSTRIAL PURCHASING - THE DETERMINANTS OF JOINT ACTION IN BUYER-SUPPLIER RELATIONSHIPS , 1990 .

[18]  A. Lemelin,et al.  Relatedness in the Patterns of Interindustry Diversification , 1982 .

[19]  L. Ellram.  Supply‐Chain Management: The Industrial Organisation Perspective , 1991 .

[20]  M. Cooper,et al.  Supply Chain Management, Partnership, and the Shipper ‐ Third Party Relationship , 1990 .

[21]  Ashoka Mody,et al.  Journal of Economic Behavior and Organization 20 (1993) lSlLl70. North-Holland Learning through alliances , 1991 .

[22]  T. Skjoett‐Larsen,et al.  Supply Chain Management: A New Challenge for Researchers and Managers in Logistics , 1999 .

[23]  Jan B. Heide,et al.  Controlling Supplier Opportunism in Industrial Relationships , 1996 .

[24]  Y. Barzel.  Economic analysis of property rights , 1989 .

[25]  O. Williamson.  / STRATEGIZING, ECONOMIZING, AND ECONOMIC ORGANIZATION , 1991 .

[26]  A. Madhok.  COST, VALUE AND FOREIGN MARKET ENTRY MODE: THE TRANSACTION AND THE FIRM , 1997 .

[27]  R. Rumelt.  Theory, Strategy, and Entrepreneurship , 2005 .

[28]  Arni Halldorsson,et al.  Developing logistics competencies through third party logistics relationships , 2004 .

[29]  T. Corsi,et al.  LOGISTICS OUTSOURCING RELATIONSHIPS: CUSTOMER PERSPECTIVES , 2003 .

[30]  F. Aertsen,et al.  Contracting out the Physical Distribution Function: A Trade‐off between Asset Specificity and Performance Measurement , 1993 .

[31]  Jan B. Heide,et al.  Transaction Cost Analysis: Past, Present, and Future Applications , 1997 .

[32]  J. Hennart,et al.  Explaining the swollen middle : Why most transactions are a mix of market and hierarchy , 1993 .

[33]  C. Harland.  Supply Chain Management: Relationships, Chains and Networks , 1996 .

[34]  E. Penrose,et al.  The theory of the growth of the firm twenty-five years after , 1960 .

[35]  Bengt Holmstrom,et al.  Moral Hazard and Observability , 1979 .

[36]  I. Png,et al.  Monitoring Costs and the Mode of International Investment , 2002 .

[37]  T. Das,et al.  A Resource-Based Theory of Strategic Alliances , 2000 .

[38]  L. Bertalanffy.  AN OUTLINE OF GENERAL SYSTEM THEORY , 1950, The British Journal for the Philosophy of Science.

[39]  Dieter Suhr.  The Transaction Cost Approach , 1989 .

[40]  Lisa M. Ellram,et al.  Strategic supplier partnering: a psychological contract perspective , 1997 .

[41]  D. Ford,et al.  Understanding Business Markets , 1997 .

[42]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[43]  L. Ellram,et al.  The Use of Total Cost of Ownership Concepts to Model the Outsourcing Decision , 1995 .

[44]  Arvind Parkhe.  Strategic Alliance Structuring: A Game Theoretic and Transaction Cost Examination of Interfirm Cooperation , 1993 .

[45]  George S. Day,et al.  Assessing Advantage: A Framework for Diagnosing Competitive Superiority , 1988 .

[46]  J. Hobbs,et al.  A transaction cost approach to supply chain management , 1996 .

[47]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[48]  Thomas Y. Choi,et al.  Supply‐chain linkages and operational performance: A resource‐based‐view perspective , 2003 .

[49]  J. Barney,et al.  Trustworthiness as a Source of Competitive Advantage , 1994 .

[50]  B. Uzzi,et al.  Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness , 1997 .

[51]  R. Rumelt.  Strategy, structure, and economic performance , 1974 .

[52]  D. Lambert,et al.  Strategic Logistics Management , 1987 .

[53]  Suzanne Rivard,et al.  A tale of two outsourcing contracts , 2003, Wirtschaftsinf..

[54]  Thomas Palay,et al.  Avoiding Regulatory Constraints: Contracting Safeguards and the Role of Informal Agreements , 1985 .

[55]  A. Madhok.  Crossroads---The Organization of Economic Activity: Transaction Costs, Firm Capabilities, and the Nature of Governance , 1996 .

[56]  K. R. Conner.  A Historical Comparison of Resource-Based Theory and Five Schools of Thought Within Industrial Organization Economics: Do We Have a New Theory of the Firm? , 1991 .

[57]  Yemisi Bolumole.  Evaluating the Supply Chain Role of Logistics Service Providers , 2003 .

[58]  O. Williamson.  Efficiency, Power, Authority and Economic Organization , 1996 .

[59]  D. Teece.  Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy , 1993 .

[60]  David J. Teece,et al.  Towards an economic theory of the multiproduct firm , 1982 .

[61]  T. Hubbard.  The Demand for Monitoring Technologies: The Case of Trucking , 2000 .

[62]  D. Lambert,et al.  Supply Chain Management: Implementation Issues and Research Opportunities , 1998 .

[63]  Pascale G. Quester,et al.  A collaborative interest model of relational coordination and empirical results , 2005 .

[64]  Louis W. Stern,et al.  Management in marketing channels , 1989 .

[65]  G. Day.  The Capabilities of Market-Driven Organizations , 1994 .

[66]  Alexander E. Ellinger,et al.  Resource‐based theory and strategic logistics research , 1997 .

[67]  Karel Cool,et al.  Asset stock accumulation and sustainability of competitive advantage , 1989 .

[68]  L. P. Bucklin.  A theory of distribution channel structure , 1966 .

[69]  O. Williamson,et al.  Markets and Hierarchies: Analysis and Antitrust Implications. , 1977 .

[70]  L. Ellram.  The Supplier Selection Decision in Strategic Partnerships , 1990 .

[71]  Margaret A. Peteraf.  The cornerstones of competitive advantage: A resource‐based view , 1993 .

[72]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[73]  Kevin G. Corley,et al.  Organizational Context as a Moderator of Theories on Firm Boundaries for Technology Sourcing , 2001 .

[74]  D. Ford.  Understanding business markets : interaction, relationships and networks , 1997 .

[75]  Mikkel Lucas Overby,et al.  Strategic Outsourcing of IT Services: Theoretical Stocktaking and Empirical Challenges , 2005 .

[76]  P. Varadarajan,et al.  Strategic alliances: A synthesis of conceptual foundations , 1995 .

[77]  R. Rumelt.  Towards a Strategic Theory of the Firm , 1984 .

[78]  Gilles Paché,et al.  Logistics outsourcing in grocery distribution: a European perspective , 1998 .

[79]  R. Gregson.  Marketing Logistics Systems Analysis , 1977 .

[80]  M. C. Jensen,et al.  THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE , 1976 .

[81]  G. Stevens.  Integrating the Supply Chain , 1989 .

[82]  Paul R. Murphy,et al.  THIRD-PARTY LOGISTICS: SOME USER VERSUS PROVIDER PERSPECTIVES. , 2000 .

[83]  D. Lambert,et al.  SUPPLY CHAIN MANAGEMENT -- MORE THAN A NEW NAME FOR LOGISTICS , 1997 .

[84]  O. Williamson.  Markets and Hierarchies , 1975 .

[85]  H. Håkansson,et al.  Developing relationships in business networks , 1995 .

[86]  M. Christopher.  Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service (Second Edition) , 1999 .

[87]  Lisa M. Ellram,et al.  Partnering Pitfalls and Success Factors , 1995 .

[88]  S. Lippman,et al.  Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition , 1982 .

[89]  R. Gregson.  The Development of a Decision Making Framework for Logistics Management: I. The Systems Approach , 1976 .

[90]  T. Skjoett‐Larsen,et al.  Third party logistics – from an interorganizational point of view , 2000 .

[91]  M. Logan.  Using Agency Theory to Design Successful Outsourcing Relationships , 2000 .

[92]  Barton A. Weitz,et al.  The Use of Pledges to Build and Sustain Commitment in , 1992 .

[93]  Birger Wernerfelt,et al.  From Critical Resources to Corporate Strategy , 1989 .

[94]  Alistair Edwards,et al.  A new dictionary of political analysis , 1991 .

[95]  Lisa M. Ellram,et al.  A Framework for Total Cost of Ownership , 1993 .

[96]  Yemisi Bolumole.  The Supply Chain Role of Third‐Party Logistics Providers , 2001 .