The ugly twins: Failed global sourcing projects and their substitutes

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Abstract

Purpose of the paper and literature addressed: Analyzing the impact of failed global sourcing projects on the entire commodity group and exploring isomorphism as potential antecedent to the observed phenomenon. The paper is embedded in the global sourcing literature, as well as isomorphism and total cost analysis.

Research method: Secondary data analysis.

Research findings: 1) Each failed global sourcing project had an “ugly twin”, i.e. the material which was not delivered by the new supplier had to be purchased from another supplier, usually the old supplier which was meant to be replaced. This re-sourcing was associated with poorer commercial conditions. 2) Higher savings expectations corresponded with lower realization rate. We interpret this finding as an expression of the presence of mimetic isomorphism.

Main contribution: Exposing the “ugly twins” and empirically testing the isomorphism assumption. Findings ask to expand total cost calculations by including the costs of failed projects. Global sourcing benefits may be over-estimated by previous studies, as they do not seem to deduce the costs of failed projects from overall savings. Firms are alerted that unrealistically high savings expectations are very likely to result in disappointment. Thus projects should preferably be avoided.
Original languageEnglish
Number of pages14
Publication statusPublished - 2 Sep 2010
Event26th IMP Conference 2010 - Budapest, Hungary
Duration: 2 Sep 20104 Sep 2010
Conference number: 26

Conference

Conference26th IMP Conference 2010
CountryHungary
CityBudapest
Period2/09/104/09/10

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