Academic journal article Management International Review

Country-of-Origin Effects in Global Industrial Sourcing: Toward an Integrated Framework

Academic journal article Management International Review

Country-of-Origin Effects in Global Industrial Sourcing: Toward an Integrated Framework

Article excerpt

Abstract

* The research on country-of-origin effects on global industrial sourcing is still limited and does not systematically include the characteristics of industrial buying behaviour.

* The purpose of this paper is to review current research on coo-effects in industrial marketing and develop an integrated framework for assessing coo-cues in industrial sourcing decisions.

Key Results

* The paper presents a conceptual model including buying task and buying centres. 16 propositions are developed.

Introduction

This paper provides a state of the art review on country-of-origin (COO) effects on global industrial sourcing. As companies throughout the world ride the wave of globalization, many have increased the volume as well as frequency of global sourcing activities in order to remain globally competitive. Big players in the computer industry such as Dell, Compaq, Gateway, etc. have relied on major suppliers in Taiwan for most of computer chips and motherboards which go into computers they sell around the world. It has therefore become more important for global supplier firms to know how global industrial managers may be influenced by COO perceptions in making their global sourcing decisions.

The COO literature is replete with studies addressing how consumers may rely on the COO and other cues for consumer product evaluations (for reviews see Bilkey/Nes 1982, Samiee 1994). By comparison, scanty research has been reported about how industrial buyers evaluate sourcing decisions based on the COO cue (Yu/Chen 1993, Quester/Dzever/Chetty 2000). Moreover, of the limited number of studies reported in the COO literature addressing industrial buying decisions, most continues to use single cue models (Gudum/Kavas 1996, Chang/Kim 1995) in which the only cue used is the COO information. Single cue model is likely to produce response biases. Multiple cues, on the other hand, are more realistic and less likely to produce response biases. Unlike evaluations of consumer products, which assume individual consumer decision making, industrial sourcing decision making is far more complex involving decision making context and multiple players in the decision making process.

The purpose of this paper is to first provide an evaluation of extent COO literature on industrial buying decisions. It will then identify factors central to industrial buying situations, which should be taken into consideration when investigating COO effects in an organizational setting and in a multiple cue context. COO effects on purchasing and technical managers as major influencers and decision makers in global industrial sourcing decisions will also be examined. Theories behind the relative contributions of these factors in influencing industrial buying decisions will de delineated. An industrial global sourcing model incorporating COO and other critical factors will be presented followed by a set of research propositions on bow COO effects are expected to affect global industrial buyers' and purchasing managers' perceptions and sourcing decisions.

COO Effects in Global Industrial Sourcing: A Literature Review

Whereas no less than 200 to 300 studies have been reported in the consumer behavior literature addressing COO issues related to evaluations of consumer products (Oszomer/Cavusgil 1991, Peterson/Jolibert 1995) less than twenty studies have been reported, which address issues related to COO effects in industrial buying (Table 1). Some of the studies focus on differences in purchasing managers' perceptions of product or component part sourcing including newly industrialized countries (NICs) (Chang/Kim 1995), Eastern Europe (Chasin/Jeffe 1979, 1987), China and South East Asia (Chang/Kim 1995, Ghymn/Jacobs 1993, Dzever 1997, Kaynak/Kucukemiroglu 1992) and Western Europe (White 1979, Turnbull 1985, Greer 1971, Niffeneger et al. 1980). Other studies have focused on the perceptions of purchasing managers from a specific country, such as China (Kaynak 1989), Turkey (Gudum/Kavas 1996), New Zealand (Chetty/Dzever/ Quester 1999) and United Kingdom (Greer 1971). …

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