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Small firm entrepreneurial outsourcing: traditional problems, nontraditional solutions

Small firm entrepreneurial outsourcing: traditional problems, nontraditional solutions Purpose – Pursuing objectives despite limited internal resources and leveraging external resources despite non‐ownership are familiar hallmarks of entrepreneurial firms. Although outsourcing is the standard way for businesses to surmount these barriers, entrepreneurial firms often lack the resources to purchase outsourcing arrangements. The purpose of this paper is to shed light on how entrepreneurial firms can better procure and benefit from outsourcing arrangements. Design/methodology/approach – The paper examines six entrepreneurial firms in a Shanghai business incubator as they undertook a variety of outsourcing arrangements. It utilizes an integrative framework based on transaction cost theory, resource dependency theory, and the resource‐based view. It then cross‐hatches those three theory bases with four outsourcing modes (full, partial, spinout, inter‐outsourcing) and case study methodology. Findings – The paper's findings yield three novel propositions for strategic and ex ante entrepreneurial firm outsourcing activities. The propositions pertain to the exchange of non‐traditional resources, vendor‐buyer power differentials, and linkages between internal operations and external resources. Originality/value – Entrepreneurial firms stand to benefit in particularly vital ways from outsourcing arrangements. Yet, they are often severely constrained with respect to resources. Such strong need combined with limited means is a peculiarly valuable setting but only a paucity of research exists. The original study targets this important setting. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Outsourcing: An International Journal Emerald Publishing

Small firm entrepreneurial outsourcing: traditional problems, nontraditional solutions

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Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1753-8297
DOI
10.1108/17538291211291774
Publisher site
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Abstract

Purpose – Pursuing objectives despite limited internal resources and leveraging external resources despite non‐ownership are familiar hallmarks of entrepreneurial firms. Although outsourcing is the standard way for businesses to surmount these barriers, entrepreneurial firms often lack the resources to purchase outsourcing arrangements. The purpose of this paper is to shed light on how entrepreneurial firms can better procure and benefit from outsourcing arrangements. Design/methodology/approach – The paper examines six entrepreneurial firms in a Shanghai business incubator as they undertook a variety of outsourcing arrangements. It utilizes an integrative framework based on transaction cost theory, resource dependency theory, and the resource‐based view. It then cross‐hatches those three theory bases with four outsourcing modes (full, partial, spinout, inter‐outsourcing) and case study methodology. Findings – The paper's findings yield three novel propositions for strategic and ex ante entrepreneurial firm outsourcing activities. The propositions pertain to the exchange of non‐traditional resources, vendor‐buyer power differentials, and linkages between internal operations and external resources. Originality/value – Entrepreneurial firms stand to benefit in particularly vital ways from outsourcing arrangements. Yet, they are often severely constrained with respect to resources. Such strong need combined with limited means is a peculiarly valuable setting but only a paucity of research exists. The original study targets this important setting.

Journal

Strategic Outsourcing: An International Journal – Emerald Publishing

Published: Nov 16, 2012

Keywords: Business improvement; Innovation; Supplier or partner selection; Process design; Contract negotiation; Process planning; Small enterprises; Entrepreneurialism; Outsourcing

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