Sourcing from
developing
countries
145
Strategic Outsourcing: An
International Journal
Vol. 2 No. 2, 2009
pp. 145-164
# Emerald Group Publishing Limited
1753-8297
DOI 10.1108/17538290910973367
Criteria for sourcing from
developing countries
Adegoke Oke and Arnold Maltz
W.P. Carey School of Business, Arizona State University,
Tempe, Arizona, USA, and
Poul Erik Christiansen
Copenhagen Business School, Frederiksberg, Denmark
Abstract
Purpose – Increasingly, sourcing decisions are routinely including contract manufacturers and
suppliers in developing countries. While many studies have researched and identified the criteria for
selecting suppliers in general terms, there has been a dearth of studies on the criteria for choosing
amongst suppliers in developing countries including suppliers in Eastern Europe, Asia and Africa.
The purpose of this paper is to investigate the criteria for choosing amongst suppliers in different
developing countries.
Design/methodology/approach – The methodology consists of a series of case studies involving
six firms some of which are sourcing from developing countries and some that are based in
developing countries and supply lead firms in developed countries.
Findings – Cost, physical and cultural proximity, political factors and reliability are found to be the
primary criteria for sourcing decisions that include suppliers in Eastern Europe, Asia and Africa.
Further, the paper identifies why these criteria are used and the drawbacks in using them.
Research limitations/implications – A key limitation of the study is generalizability. Based on
the use of a case study methodology, caution should be exercised in generalizing the results of the
study.
Originality/value – In spite of the limitations, this paper contributes to the extant literature on
sourcing from developing countries. It provides valuable insights for global purchasing managers
interested in sourcing from developing countries in terms of the criteria for choosing a particular
location for sourcing and selecting a supplier within a given location.
Keywords Developing countries, Sourcing, Purchasing, Manufacturing systems,
Supply chain management
Paper type Research paper
Introduction
The need to compete effectively on cost is driving many firms based in developed
countries to source from developing countries with low cost structures. This trend
inevitably leads to economic development in the chosen developing countries. As a
result, there is competition for businesses and outsourced operations between different
developing countries.
There are a number of factors that firms take into consideration when selecting
suppliers including cost, delivery reliability and quality (Tracey and Tan, 2001;
Kannan and Tan, 2002; Bolumole et al., 2007). Low cost has been the primary driver for
sourcing from developing countries. However, other criteria that focus on strategic
issues and the strategic implications of supplier selection are equally important
(Vonderembse and Tracey, 1999; Goddard and Ajami, 2008). As such, other sourcing
criteria might need to be considered given the increasing availability of low cost
sourcing locations in developing countries. Hsu et al. (2006) argue that criteria for
effective supplier selection remain ambiguous and that there is a need for appropriate
measures for selecting key suppliers. This is in part due to the inconsistency between
prescriptive models for making outsourcing decisions and what actually happens in
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