Title: Make-buy decisions in the face of technological change: does industry clockspeed matter?

Authors: Robert K. Perrons, Ken Platts

Addresses: University of Cambridge, Institute for Manufacturing, 16 Mill Lane, Cambridge, CB2 1RX, UK. ' University of Cambridge, Institute for Manufacturing, 16 Mill Lane, Cambridge, CB2 1RX, UK

Abstract: Some evidence in the area of make-buy decisions for new technologies suggests that it is a good idea for a company to pursue a fairly rigorous ||make|| policy in the early days of a potentially disruptive innovation. Other studies prescribe exactly the opposite, promoting instead a ||buy|| strategy. This paper seeks to bridge the gap between these perspectives by suggesting that both strategies are valid, but that they are most successfully applied in different market environments. The ||make|| prescription may be more suited to either extremely fast or extremely slow rates of technological change, while a ||buy|| strategy might be more appropriate in market sectors where technologies evolve at a medium pace. This paper highlights the importance of industry clockspeed and supplier relationships in make-buy decisions for new technologies, and puts forward two new hypotheses that require empirical testing.

Keywords: outsourcing; make-or-buy decisions; supplier relationships; industry clockspeed; SMEs; technological change; technology transfer; innovation.

DOI: 10.1504/IJMED.2005.006020

International Journal of Management and Enterprise Development, 2005 Vol.2 No.1, pp.1 - 11

Published online: 23 Jan 2005 *

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