Title: Strategic role of sourcing strategy in the relationships between competitive strategies and organisational performance

Authors: Haim Hilman; Zainal Abidin Mohamed

Addresses: College of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia. ' Graduate School of Management, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia

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.

Keywords: Michael Porter; generic strategies; competitive strategies; sourcing strategies; organisational performance; strategic roles; relationships; cost leadership; differentiation; make or buy; manufacturing industry; regression analysis; Sobel test; Malaysia; China; Singapore; supplying countries; international business; entrepreneurship development; entrepreneurs; internationalisation; small and medium-sized enterprises; SMEs.

DOI: 10.1504/JIBED.2012.045380

Journal for International Business and Entrepreneurship Development, 2012 Vol.6 No.1, pp.75 - 82

Published online: 30 Aug 2014 *

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