SPECIFIC PERFORMANCE MEASUREMENT INSTRUMENTS FOR SOURCING STRATEGY

Abstract

Sourcing has become quite a popular topic in both research and practise of modern business management. It brings a revolutionary philosophy and approach today's management because of technology, globalization and the never ending pursuance of competitive advantage. However, present performance measurement instruments have nor been able to provide the necessary support in strategic decisions and performance improvement. This paper attempts to propose and test an innovative performance measurement by introducing new parameters on the existing financial and non-financial performance measurements specifically in the development of strategic sourcing management. Basically the research is based on the Industrial Organization (I0) Theory, the Transaction Cost Theory and the Resource Based View (RBV). Meanwhile, Questionnaires were sent via mail survey to 1300 firms and 314 of them responded. In sum the findings suggest that the use of the proposed measurement instruments reflect better performance of the organizations in this sourcing study (make or buy).