Matching Task Complexity With Supplier Management to Enhance Outsourcing Performance

Abstract

As organizations search for low-cost and complementary resources and capabilities from external partners, the development of strategic outsourcing becomes an increasingly complex task. Without having well-developed outsourcing processes and task complexity management capabilities in place, opportunities for improvement of outsourcing practices are largely unrealized. This study aims to investigate the influence of task complexity on outsourcing practices and explore the appropriate supplier management approaches for managing outsourcing task complexity. This study suggests a research model that addresses the moderating roles of supplier governance and supplier development in the relationship between task complexity and outsourcing performance. We collected data from Chinese manufacturing firms to test the proposed hypotheses. The results of this study reveal that: (1) task complexity negatively relates to outsourcing performance; (2) both contractual and relational governance play an important role in weakening the negative effect of task complexity on outsourcing performance; (3) supplier development also weakens the negative effect of task complexity on outsourcing performance. The findings of this study provide valuable insights into the ways that firms operating in China manage task complexity effectively and achieve desired outsourcing performance.