Title: Governance mode switching and upgrading opportunities in global supply chains: Australasian SMEs in China

Authors: Taghreed Hikmet; Peter Enderwick

Addresses: Department of International Business, Strategy and Entrepreneurship, AUT Business School Private Bag 92006, AUT University, Auckland 1142, New Zealand ' Department of International Business, Strategy and Entrepreneurship, AUT Business School Private Bag 92006, AUT University, Auckland 1142, New Zealand

Abstract: Using a modified transaction cost economics approach, we examine shifts in offshore outsourcing governance modes and their implications for supplier upgrading opportunities using a sample of Australasian SMEs outsourcing to China. We find a high rate of mode switching and extend the literature by analysing pure switches as well as mode expansions and extensions. We find that learning in the local market increases willingness to assume risk and the ability to distinguish supplier competence and establish trust. Where this encourages a change in outsourced transactions by SMEs, mode switches provide potential upgrading opportunities.

Keywords: offshore outsourcing; governance mode switches; China; high-tech SMEs.

DOI: 10.1504/IJGSB.2021.120482

International Journal of Globalisation and Small Business, 2021 Vol.12 No.4, pp.413 - 432

Received: 14 Apr 2021
Accepted: 07 Oct 2021
Published online: 21 Jan 2022 *

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