How Multi-Sourcing Can Influence Management Control: Case Study Evidence From the Electronic Products Supply Chain

46 Pages Posted: 21 Sep 2022

See all articles by Neale Gilbert O'Connor

Neale Gilbert O'Connor

Monash University Malaysia; Monash University Malaysia

Jason D. Schloetzer

Georgetown University - McDonough School of Business; Georgetown University - Department of Accounting and Business Law; Georgetown University - Department of Accounting and Business Law

Jorge Romero

Towson University

Anne Wu

National Chengchi University (Taipei)

Date Written: August 2022

Abstract

This study investigates how multi-sourcing can influence the use of management controls in the presence of varying buyer-supplier power dependencies. Multi-sourcing is an interorganizational design choice that can help buyers collect valuable information to facilitate cost and performance comparisons across multiple sources of supply. We leverage prior research to develop a conceptual framework that highlights how multi-sourcing can enable buyers to use cost management and performance management controls differently depending on the nature of buyer-supplier power dependencies. We then use case studies of three electronic product manufacturers to illustrate the framework, yielding empirically testable propositions regarding when multi-sourcing may enable cost management controls, performance management controls, and both types of control. The evidence demonstrates the importance of simultaneously considering multiple interorganizational design choices when studying management controls in supply chains. We also highlight how multi-sourcing may help supply chains promote non-financial goals, including those related to environmental and social activities.

Keywords: Management controls, Performance management, Cost management, Interfirm relationships, Competitive priorities, Information technology industry.

JEL Classification: M40, M41, M16, L23, L24, L63

Suggested Citation

O'Connor, Neale Gilbert and O'Connor, Neale Gilbert and Schloetzer, Jason D. and Romero, Jorge and Wu, Anne, How Multi-Sourcing Can Influence Management Control: Case Study Evidence From the Electronic Products Supply Chain (August 2022). British Accounting Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4201438

Neale Gilbert O'Connor

Monash University Malaysia ( email )

Petaling Jaya, Selangor 46150
Malaysia
60122005964 (Phone)

Monash University Malaysia ( email )

Malaysia
0122005964 (Phone)
47500 (Fax)

Jason D. Schloetzer (Contact Author)

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States
202-687-2672 (Phone)

HOME PAGE: http://explore.georgetown.edu/people/jds99/?PageTemplateID=319

Georgetown University - Department of Accounting and Business Law ( email )

McDonough School of Business
Washington, DC 20057
United States

Georgetown University - Department of Accounting and Business Law ( email )

McDonough School of Business
Washington, DC 20057
United States

Jorge Romero

Towson University ( email )

8000 York Road, ST 100A
Towson, MD 21204
United States

Anne Wu

National Chengchi University (Taipei) ( email )

No. 64, Chih-Nan Road
Section 2
Wenshan, Taipei 11623
Taiwan

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