Strategic role of sourcing strategy in the relationships between competitive strategies and organisational performance
by Haim Hilman; Zainal Abidin Mohamed
J. for International Business and Entrepreneurship Development (JIBED), Vol. 6, No. 1, 2012

Abstract: Porter's generic strategies (cost leadership and differentiation) have been accepted by academicians and practitioners as a typology of competitive strategies for businesses. Firms face tremendous pressure to identify not only the best competitive strategy but sourcing strategy (make or buy) as well. This study investigated the effect of specific sourcing strategies as a mediator on the relationship between competitive strategies and organisational performance. A questionnaire was administered to 314 senior executives of 1,300 manufacturing-based firms. Data were analysed using regression analyses and Sobel test. The results indicated specific sourcing strategy mediated the relationship between specific competitive strategy and organisational performance. Specifically, the make strategy mediated the relationship between cost leadership and organisational performance, and the buy strategy mediated the relationship between differentiation strategy and organisational performance. Meanwhile, firms of both sourcing strategies chose Malaysia, China and Singapore as their top three supplying countries.

Online publication date: Sat, 30-Aug-2014

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