Global procurement of service activities by service firms

Abstract

Global procurement of service activities has received an increasing amount of managerial attention in recent years. Service firms seem to have begun sourcing part of their service activities from abroad in much the same way as manufacturing firms have sourced components and finished goods in the past 30 years. However, little is known about the nature of service global sourcing strategy. In this study, we examine the differences in the characteristics of core service activities provided by service firms that market pure service activities versus those service firms that market service activities which involve tangible goods, and the extent to which both types of service firms engage in internal and foreign sourcing of core service activities before the service activities are provided to their customers. The results show, among others, that the level of inseparability of core service activities performed and/or sourced by “pure” service firms is significantly higher than that of “non‐pure” service firms and that “non‐pure” service firms consider foreign sourcing drivers as much more important factors in influencing the decisions in selecting potential suppliers for core service activities. Managerial and theoretical implications are explored.

Citation

Kotabe, M. and Murray, J.Y. (2004), "Global procurement of service activities by service firms", International Marketing Review, Vol. 21 No. 6, pp. 615-633. https://doi.org/10.1108/02651330410568042