The Impact of Environmental Dynamism on Strategic Outsourcing Success

Authors: Mohamad Ghozali Hassan, Abdul Aziz Othman, Mohd Azril Ismail

Abstract:

Adapting quickly to environmental dynamism is essential for an organization to develop outsourcing strategic and management in order to sustain competitive advantage. This research used the Partial Least Squares Structural Equation Modeling (PLSSEM) tool to investigate the factors of environmental dynamism impact on the strategic outsourcing success among electrical and electronic manufacturing industries in outsourcing management. Statistical results confirm that the inclusion of customer demand, technological change, and competition level as a new combination concept of environmental dynamism, has positive effects on outsourcing success. Additionally, this research demonstrates the acceptability of PLS-SEM as a statistical analysis to furnish a better understanding of environmental dynamism in outsourcing management in Malaysia. A practical finding contributes to academics and practitioners in the field of outsourcing management.

Keywords: Environmental Dynamism, Customer Demand, Technological Change, Competition Level, Outsourcing Success.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1337767

References:

[1] A. Cingoz, and A. A. Akdogan, “Strategic Flexibility, Environment Dynamism, and Innovation Performance: An empirical study,” Social and Behavioral Sciences, vol. 99, pp. 582-589, 2013.
[2] R. Achrol, and L. W. Stern, “Environment Determinants of Decision- Making Uncertainty in Marketing Channels,” Journal of Marketing Research, vol. 25, no. 1, pp. 36-50, 1988.
[3] J. Anderson, and B. Weitz, “Determinants of Continuity in Conventional Industrial Channel Dyads,” Marketing Science, vol. 8, no. 8, pp. 310- 323, 1989.
[4] D. Miller, P. Friesen, “Innovation in Conservative and Entrepreneurial Firms: Two models of strategic momentum.” Strategic Management Journal, vol. 3, pp. 1-25, 1982.
[5] R. Dwyer, and M. A. Welsh, “Environmental Relationships of the Internal Political Economy of Marketing Channels,” JMR, Journal of Marketing Research, no. 22, pp. 387, Nov. 1985.
[6] T. G. Noordewier, G. John, J. R. Nevin, “Performance Outcomes of Purchasing Arrangements,” Journal of Marketing, vol. 54, no. 4, pp. 80- 93, 1990.
[7] R. S. Kaplan, and D. P. Norton, “The Balanced Scorecard: Measures that drive performance,” Harvard Business Review, vol. 70, pp. 71-79, 1992.
[8] D. Elmuti, “The Perceived Impact of Outsourcing on Organizational Performance,” Mid-American Journal of Business, vol. 18, no. 2, pp. 33- 37, 2003.
[9] J. F. Hair, W. C. Black, B. J. Babin, R. E. Anderson, and R. L. Tatham, Multivariate Data Analysis. 6th ed. Uppersaddle River, New Jersey: Pearson Education International, Inc., 2006.
[10] P. B. Lowry, and J. Gaskin, “Partial Least Squares (PLS) Structural Equation Modeling (SEM) for Building and Testing Behavioral Causal Theory: When to choose it and how to use it,” IEEE Transactions on Professional Communication, vol. 57, no. 2, pp. 123-146, 2014.
[11] C. Fornell, and D. Larcker, “Evaluating Structural Equation Models with Unobservable Variables and Measurement Error,” J. Mark. Re., vol. 18, pp. 39-50, 1981.
[12] J. Nunnally, Psychometric Theory. 2nd ed. New York: McGraw-Hill, 1978.
[13] E. Carmines, and R. Zeller, Reliability and Validity Assessment. Beverly Hills (CA): Sage, 1979.
[14] W. S. Chow, and L. S. Chan, “Social Network and Shared Goals in Organizational Knowledge Sharing,” Inf. Mang., vol. 45, no. 7, pp. 24- 30, 2008.
[15] J. Hulland, “Use of Partial Least Squares (PLS) in Strategic Management Research: A Review of Four Recent Studies,” Strategic Management Journal, vol. 20, no. 2, pp. 195-204, 1999.
[16] J. Cohen, Statistical Power Analysis for the Behavioral Sciences. Hillside, HJ: L. Erlbaum Associates, 1988.
[17] B. H. Wixom, and H. J. Watson, “An Empirical Investigation of the Factors Affecting Data Warehousing Success,” MIS Quarterly, vol. 25, no. 1, pp. 17-41, 2001.