Production Outsourcing: Perspectives from Small and Medium-sized Enterprises

Karen Ka Leung Moon, Fung Yi Tam, Mei Mei Lau, Jimmy M.T. Chang

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

Given the intense international competition brought on by globalisation, an organization's profit is largely determined by how it leverages its internal and external resources. This paper studies the production sourcing strategies adopted by the small and medium-sized enterprises (SMEs) in the clothing industry together with their motivations for outsourcing, adoption of buyer-seller relationships, and satisfaction with their production sourcing performance. A conceptual framework was developed from the literature and tested using a questionnaire survey. Quantitative analysis showed that motivational factors (MFs) can affect an SME's satisfaction with its operational achievement; while host-country and location MFs can affect its strategic achievement. In addition, firms adopting a pure transaction approach seemed to be negatively motivated by the total-cost factor; and those adopting a more diverse sourcing strategy were more likely to be motivated by the corporate factor so as to develop appropriate buyer-seller relationships with vendors, and to be satisfied with their operational performance. This paper contributes to a deeper understanding of business networking from the perspectives of SMEs in regard to their pursuit of production sourcing; and demonstrates how clothing SMEs adopt production sourcing strategies to improve their production sourcing performance.

Original languageEnglish
Pages (from-to)65-83
Number of pages19
JournalResearch Journal of Textile and Apparel
Volume18
Issue number2
DOIs
Publication statusPublished - 1 May 2014

Keywords

  • Buyer-seller Relationships
  • Clothing Industry
  • Motivational Factors
  • Production Sourcing Strategies
  • Small and Medium-sized Enterprises (SMEs)
  • Sourcing Performance Satisfaction

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