An Empirical Study on the Adoption of Production Sourcing Strategies and Pursuance of Buyer-Seller Relationships

 

Abstract:
The purpose of this research is to identify the factors that motivate small and medium-sized enterprises (SMS) in the clothing industry to source productin facilities from external resources and to evaluate the impacts of these factors on the adoption of production sourcing strategies and pursuance of buyer-seller relationships. A questionnaire survery of 104 clothing SMEs was conducted to study the industry's behavioural attitude towards productin sourcing. Ligistic regression was used to identify whether there are any impacts of the motivational factors of production sourcing on the adoption of sourcing strategies and pursuance of buyer-seller relationships. Results show that managers sourcing production from outside the company or from multiple sources can help lower a buying firm's costs and increase its leverage over suppliers. Also, SNEs can enlarge their limited resources by using multiple sourcing strategies and adopting closer relationships with suppliers. In this way, managers can better control the overall costs and focus more on their core competencies.

 

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