Decision-making criteria in tactical make-or-buy issues: an empirical analysis

Abstract

Purpose – The purpose of this paper is to seek to contribute to the assessment of the impact of a number of decision-making criteria in resolving tactical make-or-buy issues in enterprises operating in Greece. Moreover, it sheds light on the relationship between the impact of each criterion and a number of independent variables. Design/methodology/approach – Initially, depth interviews were made with purchasing managers in ten industrial firms operating in Greece. The findings of these interviews and the review of the pertinent literature provided the basis for the questionnaire design. Then, a copy of the questionnaire and a prepaid self-addressed return envelope were mailed to a stratified sample of 300 industrial firms operating in Greece. By the end of this process, 85 questionnaires were received, representing a 28.3 percent response rate. Findings – Cost and quality appear to be the criteria with the most impact, which indicates that companies usually resolve tactical make-or-buy issues in order to achieve short-term cost savings or operational advantage. The emphasis placed upon the other criteria tends to vary with the situation under which the particular make-or-buy issue is resolved. Originality/value – It develops a more precise assessment of the impact of each make-or-buy decision-making criterion and investigates the relationship between this impact and a number of independent variables.