Title: Concurrent sourcing and supplier opportunism

Authors: Niels Peter Mols

Addresses: Department of Economics and Business, Aarhus University, Fuglesangs Allé 4, Building 2632, Room 223, 8210 Aarhus V, Denmark

Abstract: The term 'concurrent sourcing' refers to the practice of a firm to simultaneously make and buy the same components. This paper presents an agency model for explaining how and when concurrent sourcing reduces the likelihood of external supplier opportunism. In the proposed model, the external supplier's expected costs of opportunism are determined as a product of four factors. These four factors are: buyer's likelihood of discovering supplier opportunism, buyer's internalised quantity as reaction to supplier opportunism, asset specificity of external supplier's investments, and multiplier effects. Each of these factors are explained and discussed in the paper. The paper also offers a number of theoretical and managerial implications.

Keywords: supplier opportunism; business-to-business; B2B relationships; plural sourcing; concurrent sourcing; plural governance; agency theory; transaction cost theory; plural form; make-and-buy; tapered integration.

DOI: 10.1504/IJPM.2017.080917

International Journal of Procurement Management, 2017 Vol.10 No.1, pp.89 - 105

Received: 23 May 2015
Accepted: 13 Dec 2015

Published online: 12 Dec 2016 *

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