Understanding contextual factors influencing insourcing decisions at a Swedish manufacturing company
(2021) MTTM05 20211Engineering Logistics
- Abstract
- Problem description: A vast amount of research has been done on outsourcing due to the trend of outsourcing activities to low-cost countries that have influenced the manufacturing industry. However, many researchers emphasize that there is not enough research conducted on the subject of insourcing decisions. Hence, it is necessary to explore this area further to create a deeper understanding of the subject. With Unit Alpha facing a possible insourcing decision, there is an opportunity to study this decision and explore what factors influence the decision of interest to further contribute to theory and create a deeper understanding of the underlying motives of insourcing decisions.
Purpose: The purpose of this thesis is to explore what... (More) - Problem description: A vast amount of research has been done on outsourcing due to the trend of outsourcing activities to low-cost countries that have influenced the manufacturing industry. However, many researchers emphasize that there is not enough research conducted on the subject of insourcing decisions. Hence, it is necessary to explore this area further to create a deeper understanding of the subject. With Unit Alpha facing a possible insourcing decision, there is an opportunity to study this decision and explore what factors influence the decision of interest to further contribute to theory and create a deeper understanding of the underlying motives of insourcing decisions.
Purpose: The purpose of this thesis is to explore what and how contextual factors influence insourcing decisions within a large-scale decentralized manufacturing organization.
Research questions: What are the contextual factors influencing insourcing decisions in the context of a large-scale decentralized organization within the manufacturing industry? How are the contextual factors influencing insourcing decisions in the context of a large-scale decentralized organization within the manufacturing industry? How are the contextual factors influencing a current insourcing decision at Unit Alpha?
Methodology: An exploratory study of insourcing decisions at the case company. The aim was to understand the influential factors of insourcing decision-making. A literature review was conducted before interviews were held to help make decisions on what data to collect. The case study conducted was a single-case study with an embedded unit of analysis to get a deeper understanding. Data collection was mainly through interviews. The data analysis was conducted by comparing findings from the literature review with empirics.
Conclusion: The study identified a wide set of contextual factors and their influence on insourcing decisions. The identified factors were categorized into ten aggregated dimensions: strategic intent, macro-environment, physical capital resources, human capital resources, organizational capital resources, dynamic capabilities, operational capabilities, costs, quality, and risks. Most identified factors within these dimensions coincided with those described in the literature. However, some factors appeared to be more or less significant to insourcing decisions than what is described in the literature. Utilization of capacity and production volumes appeared to play a significant role, while quality-related factors played a less significant role. The disconnection between strategic intent and insourcing decisions described in the literature was found to not hold true for the case company, where insourcing is viewed as a possibility to achieve the strategic intentions of the organization. The decisions were mostly grounded on long-term strategic plans. Furthermore, two factors highly specific for the context emerged, intra-organizational coordination and cross-divisional information sharing. One key takeaway was that a high degree of the factors could act both as barriers and enablers for insourcing decisions. The investigation of the contextual factors influencing a current decision at Unit Alpha was concluded with insourcing not being possible at the moment. In this decision, the current production volumes, and lack of information regarding future volumes were the deciding factors. Based on the investigation, a model for future decisions of similar character was developed for the case company. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9056454
- author
- Thorn, Elias LU and Ahlborg, Felicia LU
- supervisor
- organization
- course
- MTTM05 20211
- year
- 2021
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- Insourcing, Decision-making, Contextual factors, Manufacturing industry, Sourcing
- report number
- 5945
- language
- English
- id
- 9056454
- date added to LUP
- 2021-06-18 13:53:55
- date last changed
- 2021-06-18 13:53:55
@misc{9056454,
abstract = {{Problem description: A vast amount of research has been done on outsourcing due to the trend of outsourcing activities to low-cost countries that have influenced the manufacturing industry. However, many researchers emphasize that there is not enough research conducted on the subject of insourcing decisions. Hence, it is necessary to explore this area further to create a deeper understanding of the subject. With Unit Alpha facing a possible insourcing decision, there is an opportunity to study this decision and explore what factors influence the decision of interest to further contribute to theory and create a deeper understanding of the underlying motives of insourcing decisions.
Purpose: The purpose of this thesis is to explore what and how contextual factors influence insourcing decisions within a large-scale decentralized manufacturing organization.
Research questions: What are the contextual factors influencing insourcing decisions in the context of a large-scale decentralized organization within the manufacturing industry? How are the contextual factors influencing insourcing decisions in the context of a large-scale decentralized organization within the manufacturing industry? How are the contextual factors influencing a current insourcing decision at Unit Alpha?
Methodology: An exploratory study of insourcing decisions at the case company. The aim was to understand the influential factors of insourcing decision-making. A literature review was conducted before interviews were held to help make decisions on what data to collect. The case study conducted was a single-case study with an embedded unit of analysis to get a deeper understanding. Data collection was mainly through interviews. The data analysis was conducted by comparing findings from the literature review with empirics.
Conclusion: The study identified a wide set of contextual factors and their influence on insourcing decisions. The identified factors were categorized into ten aggregated dimensions: strategic intent, macro-environment, physical capital resources, human capital resources, organizational capital resources, dynamic capabilities, operational capabilities, costs, quality, and risks. Most identified factors within these dimensions coincided with those described in the literature. However, some factors appeared to be more or less significant to insourcing decisions than what is described in the literature. Utilization of capacity and production volumes appeared to play a significant role, while quality-related factors played a less significant role. The disconnection between strategic intent and insourcing decisions described in the literature was found to not hold true for the case company, where insourcing is viewed as a possibility to achieve the strategic intentions of the organization. The decisions were mostly grounded on long-term strategic plans. Furthermore, two factors highly specific for the context emerged, intra-organizational coordination and cross-divisional information sharing. One key takeaway was that a high degree of the factors could act both as barriers and enablers for insourcing decisions. The investigation of the contextual factors influencing a current decision at Unit Alpha was concluded with insourcing not being possible at the moment. In this decision, the current production volumes, and lack of information regarding future volumes were the deciding factors. Based on the investigation, a model for future decisions of similar character was developed for the case company.}},
author = {{Thorn, Elias and Ahlborg, Felicia}},
language = {{eng}},
note = {{Student Paper}},
title = {{Understanding contextual factors influencing insourcing decisions at a Swedish manufacturing company}},
year = {{2021}},
}