An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity

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Articles

An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity Q1

Reham A. Eltantawy a,n, Larry Giunipero b a

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b

Marketing and Logistics Department, Coggin College of Business, University of North Florida, FL 32224, United States Marketing Department, College of Business, Florida State University, FL, United States

art ic l e i nf o

a b s t r a c t

Article history: Received 13 March 2013 Received in revised form 14 May 2013 Accepted 5 July 2013

Recently, much of the thought in strategic sourcing, i.e., dominant logic, has shifted away from the exchange of tangible goods and toward the exchange of intangibles, specialized skills and knowledge, and processes. This study refers to strategic sourcing dominant logic as strategic sourcing centricity (SSC) and describes it as a sourcing management′s mindset based on learning, performance, planning, and relational orientations and manifests itself in the implementation of SS to meet supply management objectives and satisfy stakeholder requirements. Building on insights on intangibility derived from resource-based theory (RBV), the study proposes and empirically tests strategic sourcing centricity (SSC). The authors test the operational measures of SSC dimensions and its impact on performance on a sample of 174 supply management executives. The results indicate strong support for the theorized framework. Managerial implications and future research agenda are provided. Published by Elsevier Ltd.

Keywords: Strategic sourcing Resource-based view Performance

1. Introduction Over recent decades, scholars and practitioners have increasingly recognized that strategic sourcing provides a competitive advantage. Literature broadly defines strategic sourcing (SS) as the process of designing and managing supply networks in line with operational and organizational performance objectives (Kocabasoglu and Suresh, 2006; Narasimhan and Das, 1999). This study focuses on the managerial mindset, i.e., the dominant logic, behind such process. Competitive trends drive many companies to emphasize a more integrative dominant logic in their SS practices. Many historical examples illustrate why firms have shifted their mindset in strategic sourcing thought and practice, i.e., their strategic sourcing dominant logic. For example, Harley–Davidson, for instance, has moved to simpler contracts with more emphasis on trust and relationship building with their suppliers (Rendon, 2005). Leaders in supply management, such as Honda, emphasize continuous improvement, supplier development, and dedicated teams working with supplier bases to reduce costs (Asmus and Griffin, 2012).These practices are guided by a dominant logic to SS that focuses on intangible resources and the cocreation of value and relations with suppliers and internal and external customers.

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Corresponding author. Tel.: +1 904 620 1505; fax: +1 904 620 2782. E-mail addresses: [email protected] (R.A. Eltantawy), [email protected] (L. Giunipero).

Despite not being tested in this study, strategic sourcing centricity (SSC) is expected to be an antecedent to and a crucial determinant of SS. The term centricity has widely been used in the marketing (e.g., Gummesson, 2008; Sheth and Sisodia, 1999; Sheth et al., 2000; Singh and Koshy, 2010) supply chain literatures (e.g., Baines et al., 2009; Bowersox et al., 2000; Frankel et al., 2008; Keller et al., 2010) to describe a dominant logic that corresponds to a cognitive structure, a mindset (Grant, 1988; Prahalad and Bettis, 1995) that impacts the processes by which managers attend to and process information (Lampel and Shamsie, 2000). Centricity was used in the literature in multiple contexts to describe a dominant logic that, for example, corresponds to and is driven by product (e. g., Baines et al., 2009), customer (e.g., Frankel et al., 2008), or design (Khan et al., 2012). In essence, a dominant logic is the lens and orientation through which managers see emerging opportunities (options) for the firm (Prahalad, 2004). SSC determines the extent of a company′s orientation to the needs and goals of its strategic sourcing function. This notion of centricity can provide light in understanding the question of how sourcing managers recognize the options available to the firm and, subsequently, formulate their SS decisions and programs. Becoming strategic sourcing-centric entails an amalgam of sourcing-driven ideologies. Therefore, one of the intended contributions of this study is to provide an answer to the question: what is the dominant logic that impacts SS? The recent shift in SS dominant logic points SS toward a more comprehensive and inclusive dominant logic, one that integrates goods with services and provides a richer foundation for the

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Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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development of strategic sourcing thought and practice. Nevertheless, despite the wide recognition that SS has achieved, few researchers have attempted to identify and test the centricity in the managerial mindset that guides SS practices today. The goal of this study is to develop and operationalize strategic sourcing centricity (SSC); a set of internal ideologies that reflect the supply-management organization′s dominant logic. Consequently, this study conceptualizes SSC as a second-order construct defined as a sourcing management′s mindset based on learning, performance, planning, and relational orientations and manifests itself in the implementation of SS to meet supply management objectives and satisfy stakeholder requirements. From a conceptual perspective, this study fills a gap in the literature by offering a holistic account of SSC. Numerous previous studies have linked SS to financial or operational measures. However, the evidence is somewhat fragmented because of (1) the scope of investigated SS decisions, (2) the breadth of performance measurements. First, the majority of studies investigate specific sourcing decisions’ such as training and skill development (Carr and Smeltzer, 1999), global sourcing (Trent and Monczka, 2003), supplier selection (Kannan and Tan, 2002) or seek to identify the performance contribution of strategic alignment or internal integration (Gonzalez-Benito, 2007; Vaart and Donk, 2008). However, investigating single or few sourcing decisions limits the explanatory power (Hartmann et al., 2012). This study departs from this literature by examining a comprehensive measure of a managerial mindset, rather than processes, and fills this gap in the literature by offering a holistic account of SSC verified with a literature review. The developed second-order construct′s; SSC, impact on performance is empirically tested via a national survey. Second, SSC as a second-order construct allows researchers to deploy it in theory verification as a holistic representation of complex phenomenon because it allows researchers to match broad predictors with broad performance outcomes. Second-order constructs are pervasive in logistics, operations management and supply chain management research. A construct is a second-order construct when it refers to several distinct but related dimensions treated as a single theoretical concept. Examples of second-order constructs include supply management orientation (SMO) defined, based on literature, as four supplier-specific dimensions; long-term relationship with suppliers, supplier involvement in the product development process, a reduced number of suppliers, and a quality focus in selecting suppliers (Shin et al., 2000). In another study, SS consisted of four sub-constructs: strategic purchasing, inter-functional integration of purchasing, information sharing with suppliers, and supplier development (Kocabasoglu and Suresh, 2006). Finally, supply chain orientation (SCO) was described by Hult et al. (2008) as customer, competitor, supplier, logistics, operations, and value-chain orientations and by Min and Mentzer (2004) to include cultural elements of relations with supply chain partners: trust, commitment, cooperative norms, organizational compatibility, and top management support. Second-order constructs provide holistic representations of complex phenomena and allow researchers to match broad predictors with broad outcomes (Edwards, 2001; Hanisch et al., 1998). In other words, SSC as a second-order construct is proposed to explain the fragmented results in supply chain and strategic management theories regarding SS and performance. From a measurement perspective, this study′s contribution is in the operationalization of SSC. Despite the proliferation of SS literature and calls for such work (e.g., Ho et al., 2002), there have been few, if any, studies to develop measurement scales of SS-related concepts. This research provides a sound understanding of the dimensions of SSC. The role of scientific inquiry is to establish the relationships among the constructs of the theory, some of which must be related to observable data (Churchill, 1999).

In other words, without operationalizing the SS-related constructs, we cannot further advance scientific knowledge of the phenomenon, nor promote the successful application of SS in practice. From a managerial perspective, SSC places supply management within an integrated framework and acknowledges it as key requisite for attaining an organization′s overall objectives. As shifts occur to strategic sourcing implementations, such as the ones noted above, changes in the broader sourcing strategies reflected by SSC also emerge. This study contends that developing a strategic sourcing centricity (SSC) can provide managers with a workable approach to resolving their implementation difficulties. Without developing a SSC inside a firm, it is not possible to implement SS across the firm and attain the performance outcomes promised by supply strategies. 1.1. Objective of the study The goal of this study is to develop and operationalize strategic sourcing centricity (SSC); a set of internal ideologies that reflect the supply-management organization′s dominant logic. The following five sections present our research and findings. In Section 2, we explore the theoretical background that grounds our research. Here we also present the literature review and hypothesized framework. In Section 3, we present the results of a nationwide cross-sectional survey among senior purchasing managers to validate the SSC framework. In Section 4 the study results are discussed and the research and, then, managerial implications are presented in Section 5. In Section 6 suggested research agenda as well as limitations are presented.

2. Theoretical background and literature review 2.1. Strategic sourcing Researchers may agree on the importance of strategic sourcing, but rarely have they presented a holistic view (including antecedents) of this important construct (see Table 1). Previous research on strategic sourcing flows into three streams. Studies in the first stream of research focus on the drivers of the makeversus-buy decision: namely, whether in-house production provides the organization with a competitive advantage (e.g., Walker, 1988), whether the organization has the resources to produce inhouse or the opportunities to acquire those resources, and/or whether the technology required for the operation is immature and elicits few suppliers (e.g., Baier et al., 2008; Freeman and Cavinato, 1990; Venkatesan, 1992; Welch and Nayak, 1992). The second stream of research on strategic sourcing focuses on the long-term implications of strategic sourcing for the procurement process and on buyer/supplier relationships (e.g., Anderson and Katz, 1998; Narasimhan and Das, 1999; Paulraj and Chen, 2005; Sislian and Satir, 2000). The third stream of research focuses on the dimensions of strategic sourcing. One shortcoming of these research streams is that each study concentrates on different dimensions of strategic sourcing, and therefore, fails to complete a picture. Additionally, these research approaches to strategic sourcing offer no empirical studies aside from those of an anecdotal nature, with few exceptions that provided empirical examination of SS and/or its long-term implications (e.g., Kocabasoglu and Suresh, 2006; Narasimhan and Das, 1999; Shin et al., 2000; Smeltzer et al., 2003). After a thorough review of the literature it becomes apparent that these differing definitions are the result of having multiple constructs in one term. Building on the work of Kocabasoglu and Suresh (2006) and Kern et al. (2011), who operationalize SS as a second-order construct, this research clarifies this confounding by

Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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Table 1 Strategic sourcing. Walker (1988) Venkatesan (1992) Welch and Nayak (1992) Anderson and Katz (1998) Narasimhan and Das (1999) Shin et al. (2000) Sislian and Satir (2000) Smeltzer, et al. (2003) Paulraj and Chen (2005) Baier et al. (2008)

An approach to the make-versus-buy decisions, based on transaction cost theory, where the focus is on the strategic nature of the asset and the level of specialization in determining the outcome of the decision An approach to the make-versus-buy decision, where the importance of the component to competitive advantage is considered An approach to procurement, where manufacturing cost analysis is augmented by consideration of technological and strategic factors in makeversus-buy decisions A framework that is built on the concept of total cost of ownership and assists companies to determine the purchasing strategy for different components according to their values in achieving internal performance objectives and customer satisfaction Designing and managing supply network in line with operational and organizational performance objectives The management efforts or philosophy necessary for creating an operating environment in which the buyer and supplier interact in a coordinated fashion A framework to assist make-versus-buy decisions by considering the importance of a component in achieving advantage and the future opportunities in having the process needed for in-house production A systematic and comprehensive process of acquiring inputs as well as managing supplier relations in a manner that achieves value in obtaining the organization′s long-term objectives Initiatives that foster superior relationships between supply chain members to create a win–win situation for both the buyer and supplier firms An alignment achieved by translating manufacturing competitive priorities-through decisions on, e.g., facilities and technology and their subsequent implementation via projects and programs-into a profile of manufacturing strengths and weaknesses that supports the business unit′s overall strategic orientation and positively influences business performance

postulating that firms who desire to implement SS first need to adopt a second-order SSC that represent the mindset and the ideologies behind SS. To date, we find little holistic exploration of the managerial mindset behind SS in the operations-management literature that might explain why some firms are more successful than others in their SS programs (Handfield et al., 2009). However, when making sourcing decisions, buyers tend to rely on their perceptions of their firm′s opportunities, past actions, their senses of identity (Brown and Duguid, 1991; Shook et al., 2009), and environmental trends (Shook et al., 2009). These perceptions translate into an overarching centricity that manifests itself in SS decisions; SSC. Certainly, capturing this unobservable centricity represents a challenge according to the resource-based-view (RBV) of the firm as discussed in the following section. 2.2. Strategic sourcing centricity and the resource-based view (RBV) We rely on the resource-based view (RBV) of the firm for our study′s theoretical foundation. The basic premise of the RBV is that top-performing firms are those that are able to develop, obtain, and/ or exploit strategic resources–that is, those assets that are rare, valuable, and difficult to imitate or substitute (Barney, 1991; Wernerfelt, 1984). The key theoretical thrust of the RBV is its contention that the inimitability of valuable resources leads to sustainable competitive advantage and above-average returns (Barney, 1991, 2001). Significantly, intangible and hard-toobserve resources such as SSC are, by definition, inimitable. In the meantime, SS practices guided by an integrative centricity enable some businesses to achieve superior performance (Smeltzer et al., 2003). SSC, therefore, represents an inimitable resource, which, despite its intangibility, nevertheless contributes substantially to a firm′s competitive advantage. Empirical RBV studies have contributed significantly to operational practices (Armstrong and Shimizu, 2007), despite the difficulties in dealing with the intangible constructs inherent in the RBV (Godfrey and Hill, 1995). Similarly, the intangibility of SSC presents a challenge to its conceptualization and measurement. Godfrey and Hill (1995) suggest starting this conceptualization/ measurement process by tapping observable variables that may then indirectly reveal unobservable ones. Few previous studies have taken this approach of measuring observable indicators that then were used to reveal more complex, unobservable, secondorder constructs (e.g., Hult et al., 2001; Shin et al., 2000). We implement this mode of inquiry by investigating SSC as a strategic

resource that influences a firm′s outcome. Building on the previous studies, we first develop predictions explaining, how observable indicators reflect our hypothesized dimensions of SSC. 2.3. Literature and hypothesized framework A systematic review of pertinent literature to identify the dimensions of SSC was conducted. The review followed the three-phase approach outlined by Tranfield et al. (2003): (1) planning the review: defining objectives; preparing the proposal and developing the protocol; (2) conducting the review: identifying, selecting, evaluating and synthesizing the relevant articles; and (3) reporting and dissemination of the results: descriptive reporting of citations and thematic reporting of journal articles. For the synthesis of the selected papers, the study employed an analytic approach in order to quantitatively integrate research findings across a number of individual studies (Hunter and Schmidt, 1990). The systematic literature review approach can overcome important limitations that are inherent in traditional narrative summaries of research. Systematic methods impose discipline on the review process and provide an efficient way to summarize the results of a large number of studies and can uncover associations not previously identified (Delbufalo, 2012). The review protocol was developed around the following research question: “What are the constructs that represent sourcing management′s mindset leading to SS and subsequent performance outcomes?” The domains for the research synthesis are the empirical (both qualitative and quantitative) papers on in the marketing, supply chain and operation management literatures. Considering the above, several choices with regard to the typology of studies to be included and the eligibility criteria (i.e. the inclusion and exclusion criteria) have been made. The review was conducted by searching the Business Source Premier (EBSCO), ABI/Informs and Ingenta (including Science Direct) databases. They were found to have the greatest coverage coupled to functionality and full article access in the fields of marketing, supply chain, and operation management, which are relevant for the study. Only published peer-reviewed journal articles were considered, both practitioner and academic. Equally, books, chapters in books, conference proceedings, working papers and other unpublished works were excluded. Following David and Han (2004), this was aimed at enhancing quality control. The review considers two restrictions: (1) on the basis of date of publication: only articles published from January 1980 to March 2013 were considered; and (2) language: the review included only articles

Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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published in the English language. In order to address the multidimensionality of SSC definition, papers’ substantive relevance was ensured by requiring that selected articles containing “strategic sourcing” as primary keyword and contained at least one of the following additional keywords: sourcing, procurement, industrial buying, buyer(s), interorganization or inter-organization, supply chain, buyer–supplier, supply management, and purchasing. Papers’ substantive relevance was also ensured by requiring that articles selected contained at least one of the following additional keywords in their abstracts: orientation or oriented, centric or centricity, ideology(ies), disposition(al), and mind-set. Stemming from literature on SS, these keywords appear particularly relevant in order to tap into the constructs that represent sourcing management′s mindset. Following Newbert′s (2007) approach, empirical content was ensured by requiring that selected articles also contain at least one of the following “methodological” keywords in their abstract: data, empirical, test, statistical, finding, result, case study, survey, longitudinal, and evidence. Substantive and empirical relevance of the review was enhanced by reading all the abstracts for substantive context (i.e. discussion of antecedents, effects, outcomes and/or consequences of SS in supply chain relationships) and empirical content (i.e. mention of quantitative or qualitative analysis). Substantive and empirical relevance was finally ensured by reading all remaining articles in their entirety for substantive context and adequate empirical content. This enforced the alignment between the selected articles and the review objectives, i.e., the aim is to map the constructs that have been examined empirically as managerial dispositional antecedents (managerial mindset) of SS and reveal which of these constructs exhibit a strong relationship with SS and performance outcomes. The systematic literature review of supply chain, operations management and marketing literatures (see Table 2 for a summary) supports four first-order constructs as dimensions of the centricity prevailing SS managers’ thought; H1. The constructs of (a) learning, (b) performance, (c) planning, and (d) relational orientations are first-order indicators of strategic sourcing centricity.

While other indicators may be possible, we focus on these four constructs because of their acceptable fit with the systematic review criteria, substantive relevance and established conceptual links to strategic sourcing′s holistic functioning within a firm. The following section details the findings from relevant literature supporting these four dimensions. 2.3.1. Dimensions of strategic sourcing centricity 2.3.1.1. Learning orientation. Describes a disposition toward developing new knowledge or insights with the potential to influence behavior (Huber, 1991; Hult et al., 2002a). This orientation represents the degree to which the corporate buyer and internal customers of the focal SS unit stress the value of learning for long-term benefit, both of the supply chain organization and of the specific supply management unit. Learning orientation is defined, in this study, by the sourcing management′s degree of focus on exploiting opportunities for new ideas and processes and on pursuing knowledge for long-term benefits of supply management (Baker and Sinkula, 2002). Applications of RBV suggest that learning orientation and the knowledge to identify non-core activities for outsourcing (Grant and Baden-Fuller, 1995; Kogut and Zander, 1993; Kraljic, 1983) operate as a strategic resource within supply-chain organizations (e.g., Hult et al., 2002b; Kim et al., 2006). Additionally, managerial and marketing studies indicate that a learning orientation fosters SS (e.g., Calantone et al., 2002). Thus, learning orientation serves as a valuable and unique (i.e., inimitable) resource. When companies invest in relationship-specific assets such as learning orientation, (e.g., sharing expertise), they reduce opportunistic risk while fostering SS (Dwyer et al., 1987). Hence, we posit the following: H1a. Learning orientation is a dimension of strategic sourcing centricity. 2.3.1.2. Performance orientation. Performance orientation encourages goals and creates motivation to achieve bottom-line results (Snell and Dean, 1994). Goal-directed behavior focuses the sourcing organization on improving performance. Early research indicates that such behavior occurs in which cost

Table 2 Strategic sourcing centricity dimensions. Source

Insight

Learning orientation describes the sourcing management′s degree of focus on exploiting opportunities for new ideas and processes and on pursuing knowledge for longterm benefits of supply management Dwyer et al. (1987). Investments in learning orientation reduce opportunistic risk while fostering supply management Baker and Sinkula (2002) Learning orientation has long-term benefits for supply management Calantone, Cavusgil, and Zhao Learning orientation fosters strategic sourcing (2002) Hult et al., (2002b) Learning orientation is a strategic resource within supply-chain organizations Kim, Hong, and Chang (2006) Learning orientation strategic resource within organizations Performance orientation is the degree to which sourcing management perceives strategic sourcing as a source of competitive advantage, one that contributes to the attainment of the goals of the firm and its suppliers Snell and Dean (1994) Performance orientation creates motivation to achieve bottom-line results Kocabasoglu and Suresh (2006) Performance orientation is crucial today as an increase in market uncertainty over the last two decades requires goal directed behaviors Slater et al. (2007) Performance orientation is a requisite to meeting market uncertainty and increased supply risks Planning orientation is the extent to which sourcing management tends to direct supply management activities to align with organizational objectives and focus on the strategic part of the job rather than the tactical part. Cavinato (1991) The level of input that purchasing provides to strategic planning indicates the function′s planning orientation Naveh and Erez (2004) Planning orientation develops a tolerance to errors and that encourages risk taking and experimentation to improve process performance Naor et al. (2010) Planning orientation encourages employees to adopt innovative technologies, which can enhance long-term performance Relational orientation is the degree to which the corporate buyer and internal customers of the focal SS unit stress the interconnectedness and mutual dependence with the activities of suppliers across the supply chain. Kamath and Liker (1994) Relational orientation is a requisite for effective product development Baker and Sinkula (1999) Relational orientation is valuable resource that contribute to firm′s competitive advantage Choi and Krause (2006) Relational orientation has its implications for transaction costs, risks, responsiveness, and innovation

Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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minimization is treated as a vehicle to capturing purchasing performance (Kraljic, 1983). However, the complexity increases when the purchased material is scarce or of significant value to the buying organization; in such an instance, “performance” cannot easily trace to one indicator, such as cost minimization. Performance orientation is defined here as the degree to which sourcing management perceives strategic sourcing as a source of competitive advantage, one that contributes to the attainment of the goals of the firm and its suppliers. Sourcing mangers with a performance orientation focus on performing well because they see good performance as a means to obtaining extrinsic rewards from others (e.g., supervisors) (Kohli et al., 1998) and are concerned with being judgedable and showing evidence of ability by being successful (Ames, 1984; Ames and Archer, 1988). According to the RBV applications, the above mentioned complexity makes performance orientation a valuable, and difficult to replicate, resource to strategic sourcing, Supply chain, marketing, and logistics, literatures today reflect an increase in market uncertainty over the last two decades (e.g., Kocabasoglu and Suresh, 2006; Slater et al., 2007). Uncertainty is created by threats of resource depletion, intensified competition, and accelerated technological change. Such increasing complexity means that firms that establish performance orientation will be more likely to develop successful strategic sourcing. Hence, we arrive at: H1b. Performance orientation is a dimension of strategic sourcing centricity. 2.3.1.3. Planning orientation. Planning orientation describes the tendency to direct all activities toward opportunities consistent with the firm′s capabilities in order to achieve its long-term goals (Carr and Pearson, 2002; Carr and Smeltzer, 1997). Previous research demonstrates that planning orientation is a valuable resource that helps develop a tolerance to errors and that encourages risk taking and experimentation to improve process performance (Naveh and Erez, 2004). Planning orientation is defined in this study by the extent to which sourcing management tends to direct supply management activities to align with organizational objectives and focus on strategic part of the job rather than the tactical part. Planning serves as an important component of purchasing strategy initiatives in Ellram and Carr′s (1994) description of three different levels. At the lowest level, the firm initiates internal planning by developing a purchasing strategy; second, its planning allows the purchasing firm to play a supportive role in achieving the objectives of other functions or of the organization; and finally, the firm′s plans rely upon purchasing as a function of strategic value. The level of input that purchasing provides to strategic planning indicates the function′s planning orientation (Cavinato, 1991). In an SS setting, a planning orientation encourages employees to adopt innovative technologies, which can enhance longterm performance (Naor et al., 2010). Creating an extended planning horizon leads to higher performance (Choi and Hartley, 1996). This leads us to the contention that: H1c. Planning orientation is a dimension of strategic sourcing centricity. 2.3.1.4. Relational orientation. Relational orientation describes a firm′s predilection to routinely seek and disseminate information regarding components of its supplier relationships and supply base. These components include the business processes, practices, opportunities, or challenges of investing in and utilizing those project management assets (Brito and Nogueira, 2009; Giunipero and Pearcy, 2000) inherent in maintaining and structuring supplier relationships and the supply base (Choi and Hong, 2002). In contrast, a transactional oriented, adversarial buyer focuses on transaction-cost economizing (Chen and Paulraj,

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2004; Ghoshal and Insead, 1996). Relational orientation is defined in this study as the degree to which the corporate buyer and internal customers of the focal SS unit stress the interconnectedness and mutual dependence with the activities of suppliers across the supply chain. Previous literature linked superior performance to relational orientation elements deployed to encourage partners to adopt a relationship orientation. For example, relying on fewer suppliers (e.g., Choi and Hong, 2002; Choi and Krause, 2006), the development and maintenance of long-term relationships (e.g., Cusumano and Takeishi, 1991; Kamath and Liker, 1994; Wu and Choi, 2005), and strategic alliances (Baker and Sinkula, 1999) were all documented to be valuable resources that contribute to firm′s competitive advantage. These firm are, hence, more likely to focus on knowledge development and exchange and to increase investment in “relationship-specific assets” (Madhok and Tallman, 1998). Thus, it also serves as a valuable dimension of SSC: H1d. Relational orientation is a dimension of strategic sourcing centricity. In summary, in the above section we coalesce pertinent literature; learning, performance, planning and relation orientations, to portray literatures’ outlook on consolidating into practice the different dimensions of SSC. The next section addresses the empirical examination of the main premise of this research; (a) learning, (b) performance, (c) planning, and (d) relational orientations are first-order indicators of strategic sourcing centricity.

2.3.2. Strategic sourcing centricity and performance The potential of sourcing decisions to influence operational performance, such as cost savings, improvements in quality of goods and services, or innovations in cooperation with suppliers attracted the attention of academia and senior management (Carr and Pearson, 2002; Das and Narasimhan, 2000; Ellram et al., 2002). However, what eventually matters most for senior management is the improvement sourcing executives can contribute toward the financial success of the company (Hartmann et al., 2012). The management philosophy of these sourcing executives, i. e., SSC, will ultimately have financial implications. Chief Executive Officers (CEO) and Chief Financial Officers (CFO) understandably want justification of investments into SS while sourcing executives are given shared accountability for the company′s financial success (Ellram and Liu, 2002; Hartmann et al., 2012). Whilst the impact of SS on operational performance is understood, its influence on profitability performance is less clear (Johnson and Templar, 2011). Showing SS contribution to profitability performance is of central importance but poses a major challenge (Nollet et al., 2008). Studies that investigate the relationship between SS and company success often link few SS activities directly to general financial performance outcomes, e.g., market share or return on investment. This approach limits the explanatory value of a study because few SS activities cannot account for the many other factors in the buyer′s unit that exert an influence on the financial outcome (Vaart and Donk, 2008). Linking fragmented SS activities to holistic outcomes can be confounding. In this study, we avoid this problem by linking a holistic account of SSC, which captures the overarching managerial philosophy that guides all SS decisions, to profitability performance. This study contends that SSC is a rare, valuable, and difficult to imitate or substitute resource. The four dimensions collectively form idiosyncratic and somewhat “sticky” bundles of resources, making SSC rare and firm specific. The resource heterogeneity creates differences in each firm′s ability to conceive of and execute particular value-creating strategies which in turn lead to inter-firm

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Fig. 1. Hypothesized framework.

performance differences (Morgan, 2012). Accordingly, Fig. 1 provides a diagram of the hypothesized framework. Once a firm has effectively deployed these four dimensions, any resulting competitive advantage is sustained by the inability of others to substitute or imitate this firm-specific combination of resources, SSC, on which the firm′s strategy is based. Because SSC is built on a bundle of interrelated dimensions, competitors cannot observe the complete bundle and the complex interplay among its underlying dimensions (Chen et al., 2010; Tanriverdi and Venkatraman, 2005). The unobservable characteristic of learning, performance-, planning-, and relational-orientations is reinforced by the tacit nature of each individual dimension, which is shaped over time in specific environments, and is subject to path dependency and inertia. In summary, we argue that the difficulty of observing the complex interplay between the multiple interrelated dimensions in a SSC, coupled with the path dependent and tacit nature of each individual dimension creates significant barriers to imitation or substitution by comparable resources. Therefore, H2. An increase in the level of SSC increases firm′s profitability performance.

3. Methodology 3.1. Quantitative data collection 3.1.1. Measures The literature review is used to inform operationalizing a reflective model of SSC. In the model SSC is specified as a second-order factor that reflects the first-order factors of learning-, performance-, planning-, and relational-orientations. These conceptualized first order orientations are measured as resources in ways that support the inimitability, value, and rarity characteristics (Barney, 1991). The proposed SSC dimensions were tested via a survey instrument created in correspondence to the findings of the relevant literature. The survey comprised pre-established measures that have been published in supply chain, operations management and marketing literature of our first-order constructs (see sources of the measures in Table 4). The scales used have been widely published in the marketing, supply chain, and operations management literatures. As summarized in Table 4 the learning orientation scale was adapted from Hult et al., 2003; performance orientation scale was adapted from Min and Mentzer (2004); planning orientation scale was adapted from Carr and Smeltzer

(1997) and Carr and Pearson, 2002); relational orientation scale was adapted from Hult et al. (2000) and Giunipero and Pearcy (2000); and the profitability performance scale was adapted from Min and Mentzer,(2004) and Matsuno and Mentzer (2000). Despite their widespread use in the literature, all scales were tested for face validity in relation with our framework with two executives (with major responsibility for training within their organizations). One of the executives worked in the food industry and the other in the transportation industry. The questionnaire addressed top sourcing officers.

3.1.2. Sample Nine hundred and thirty (930) members of the Institute for Supply Management (ISM) comprised the sampling frame. The intent was to obtain one response per corporation from an individual holding a high-level position within the corporation. This group was chosen as the respondent group because it is composed of highly ranked top sourcing executives; informed about the subject matter in the survey instrument, especially strategic sourcing. Respondents were sourcing professionals with titles such as manager, director, vice president of sourcing, and vice president of materials management. Each of these sourcing executives served as a key informant. Complete useable responses were returned from a total sample size of 174 respondents, and an 18.7% response rate. Findings by methodology researchers such as Hair et al. (1998) and Hoelter (1983), confirm that the sample size of 174 falls within the recommended range of 100–200 for structural-equation modeling. The possibility of nonresponse bias was checked by comparing 30 early and 30 late respondents for all of the constructs through ANOVA (Armstrong et al., 1977; Wagner and Kemmerling, 2010). No statistically significant differences were found. Thus, it was concluded that no evidence of nonresponse bias existed. In addition to the initial process of reviewing, pilot testing, and revising the survey with industry experts, we applied procedural methods to minimize the potential for common method bias since both independent and dependent measures were obtained from the same source. There were no reverse-coded items, and all the hypotheses were stated in a positive direction (Fugate et al., 2010; Swink and Song, 2007). We conducted prequalification calls to ensure our respondents were high level sourcing managers and had high levels of relevant knowledge, which tends to mitigate single source biases (Mitchell, 1994; Swink and Song, 2007). We also reduced method biases by separating the predictor and criterion variable items over the survey instrument and by assuring the survey participants that their responses would be kept anonymous (Podsakoff et al., 2003).

Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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To explore the possibility of false reporting bias, the respondents were asked how long they personally worked in strategic sourcing. The respondents possessed considerable experience working in strategic sourcing. Seventy-eight percent (78%) of the respondents had more than ten years of purchasing experience and 43% had more than twenty years of experience. The most experienced respondents, those who had acquired more than 30 years of purchasing experience, constituted 16% of the sample. About 80% of the respondents made corporate-wide decisions, and the other 20% made decisions at the business-unit level. The conclusion was made that the respondents are knowledgeable of the framework about which they answered questions. Respondents indicated that they were at the level of Vice President, Director, or Manager (Table 3). The respondents held high positions in the organization (director level or above). About 49% of the respondents in the sample worked in the services sector and 50% in the manufacturing sector.

3.2. Quantitative data analysis and results Due to the covariate nature of the model, structural equation modeling (SEM) was considered an appropriate technique to evaluate the research hypotheses (Fornell and Bookstein, 1982; Table 3 Titles of individuals responding to questionnaire Title Chief Supply Management Officer Supply Manager Director Vice President Other- (strategic manager, lead negotiator, etc.) Total

Percent 8 14 36 20 23 100

7

Loehlin, 1998). Construct validity represents the correspondence between a construct and the operational procedure to measure that construct (Schwab, 1980) and includes reliability and convergent and discriminant validity of the measures of the construct. Regarding the present study, the results of reliability, convergent, and discriminant validities buttress the proposed SSC framework. The data analysis began with assessing the internal consistency of the scales used in this study through the construct reliability estimates (Fornell and Larcker, 1981). These reliability estimates were strong, ranging from .81 (relational orientation) to .93 (profitability performance). The data analysis begins with assessing the internal consistency of the scales used in this study through the construct reliability estimates (Fornell and Larcker, 1981). These reliability estimates were strong, ranging from .81 (relational orientation) to .93 (planning orientation). As shown in Table 4, all the indicators had loadings higher than 0.5, indicating acceptable loadings on their respective factors (Hair et al., 1998). Two tests were used to analyze the convergent validity of the SSC model—H1: 3.2.1. Test 1 LISREL 8 (Jöreskog and Sörbom, 1993) was used to analyze the convergent validity of the SSC model—see Fig. 2. The measurement portion of the model allowed all of the factors in the model to co-vary. Comparative fit index (CFI), incremental fit index (IFI), and goodness of fit index (GFI) needed to be close to or above 0.90 (Hu and Bentler, 1999). The results show an overall acceptable fit of the measurement model to the data, with a chi-square index¼110.9, df¼71, (RMSEA)¼ 0.057, (GFI)¼ 0.92, (AGFI)¼0.87, (NFI)¼0.94, (NNFI)¼0.96, and (CFI)¼ 0.98. 3.2.2. Test 2 Convergent validity was demonstrated by statistically significant path coefficients (Anderson and Gerbing, 1988). Convergent

Table 4 Reliability of measures, means, and standard deviations. Scale items (Cronbach′s α)

Learning (0.86) (adapted from Hult et al., 2003) The basic values of the purchasing process include learning as a key to improvement We agree that our ability to learn is the key to improvement in purchasing The sense around here is that employee learning is an investment, not an expense in the purchasing organization Once we quit learning in purchasing we endanger our future Q5 Performance (0.86) (adapted from Min and Mentzer, 2004) Our organization′s competency in supply management assures greater profits for our firm Our organization′s competency in supply management assures greater profits for our suppliers Our approach to managing suppliers is viewed by upper management as a source of competitive advantage Planning (0.90)a Purchasing professionals should monitor changes in the general business conditions (adapted from Carr and Smeltzer, 1997) Purchasing professionals need to apply analytical skills to understand changes in the general business conditions (adapted from Carr and Smeltzer, 1997) The purchasing function should utilize planning tools (adapted from Carr and Smeltzer, 1997) Comprehensive purchasing strategic thinking supports the overall business strategy ( adapted from Carr and Pearson, 2002) Relational (0.81) Structuring supplier relationships reflects an important aspect of sourcing (adapted from Hult et al., 2000; Giunipero and Pearcy, 2000) Managing the supply base reflects an important aspect of sourcing (adapted from Hult et al.s, 2000; Giunipero and Pearcy, 2000) Utilizing project management programs offers the sense of interconnectedness of sourcing (adapted from Hult et al., 2000) Profitability Performance (0.93) adapted from Min and Mentzer,(2004) and Matsuno and Mentzer (2000)) Our business unit′s return on assets (ROA) relative to our competitors Our business unit′s return on investments (ROI) relative to our competitors Our business unit′s return on sales (ROS) relative to our competitors a

Standard item loadings

Mean

Standard deviation

0.8148 0.7475 0.6651 0.5819

4.9934 5.351 4.755 5.4503

1.2675 1.2066 1.6531 1.2685

0.7923 0.7223 0.702

5.5638 4.5638 4.8658

1.4014 1.5127 1.5451

0.7891

5.0064

1.2684

0.7793

5.0955

1.3242

0.7526 0.7501

4.8217 5.0573

1.2634 1.4198

0.7554

5.118

1.5099

0.6978

5.0807

1.3963

0.5385

4.8199

1.44

0.888 0.8987 0.7856

5.0707 5.2222 5.0505

1.3647 1.4182 1.3353

All scale items were measured via seven-point Likert-type scales ranging from 1 ¼ “strongly disagree” to 7¼ “strongly agree”; “1” ¼not important; “7”¼ most important.

Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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Fig. 2. Convergent validity of strategic sourcing centricity.

validity was evaluated by an examination of the significance of the t-values (Bentler, 1989; Fornell and Larcker, 1981). All the observed variables measuring the constructs of the study′s model had significant t-values (p≤0.001), which provided evidence of the convergent validity. As illustrated in Table 5, the four proposed dimensions of SSC also achieved acceptable discriminant-validity measures. Discriminant validity is important to the discussion of model fit, because it establishes that two or more constructs are separate and distinct from one another. Evidence regarding discriminant validity can be obtained by using the chi-square difference test. The chi-square difference test compares the proposed unconstrained model, which estimates the correlation between a pair of constructs, and a constrained model, which fixes the value of the construct correlation to unity. The difference in chi-square between these models is a chi-square variant, with degrees of freedom equal to one. A significant chi-square difference implies that the unconstrained model is a better fit for the data, thereby supporting the existence of discriminant validity (Bagozzi and Phillips, 1982). Therefore, as evidenced by the two tests of convergent validity and by the discriminant validity test, our results support the proposed framework of SSC and support for H1a, H1b, H1c, and H1d. The results of testing H2; the hypothesized model leading to profitability performance in Fig. 3 (chi-square¼ 168.08, df¼ 103, pvalue ¼ 0.00, (RMSEA) ¼0.06, (GFI) ¼ 0.90, (CFI) ¼0.99, (NFI) ¼0.97, (NNFI) ¼0.98) also indicate support for H2; an increase in the level of SSC increases firm′s profitability performance. 4. Discussion The central research problem of this study was the conceptualization and operationalization of the second-order construct strategic sourcing centricity (SSC) underpinned by the RBV. Reviewing the extant literature applicable to the SSC uncovered four potential dimensions to SSC; learning-, performance-, planning-, and relational orientation. The literature review functions as bases for the operational parameters of SSC dimensions. CFA was utilized to test the set of factors established during the literature review. The resultant SSC framework was operationalized and tested, using data collected from 174 top sourcing executives. The second-order construct satisfied the criteria of the tests of unidimensionality, construct validity, and internal consistency reliability through a series of statistical analyses.

Table 5 Discriminant validity results χ2

Baseline model Discriminant validity tests Planning ¼ Performance Planning ¼ Relational Planning ¼ Learning Relational ¼ Learning Relational ¼ Performance Learning ¼ Performance

Change in χ2

Evidence of discriminant validity

96.56 8.16 90.33 71.84 87.45 8.70

Yes Yes Yes Yes Yes Yes

110.90 207.46 119.06 201.23 182.74 198.35 119.60

The results indicate that successfully moving to SSC will require first cultivating a learning-oriented environment that addresses continual sharing of information. As a consequence, the corporate culture must become one in which those who continually enhance their knowledge advance within a firm. Second, purchasers must move from a practice of merely reacting to user and supplier needs to a mode characterized by advanced planning, market analysis, and analytical studies, and aimed at developing proactive strategies that anticipate market movements. Firms must demand fact-based planning that is forward-looking and based on solid data. Reactions to market changes must occur quickly and efficiently. Third, and perhaps most importantly, supply managers must focus on building relationships and driving improvement through these relationships. They must shift toward interacting with the “key suppliers” to build relationships that extend to the highest levels of the organization and that allow for the free exchange of data across both organizations. Finally, they must focus on performance to drive all these relationships. Traditionally, power has driven the determination of success in negotiations. In the new model, relationships propel a model that measures performance by the mutual gains and successes of both parties.

5. Research and managerial implications The findings have both research and managerial implications. The conceptualization of the SSC construct serves several research platforms. Only recently has research attempted to formally

Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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Fig. 3. Convergent validity of the hypothesized framework.

operationalize SS (e.g., Kocabasoglu and Suresh, 2006), but no attempts have been made to develop SSC, despite calls for such work (e.g., Ho et al., 2002). This research responds to such call and provides a sound understanding of the dimensions of SSC. Previous research has indirectly explored individual aspects or subsets of SS and/or antecedents and performance implications of SS. This study represents the first attempt at conceptualizing the dimensions of SSC. In order for this construct to become more widely adopted and provide a strong foundation for SS and SCM theory to be built upon it, the construct needed to be well defined and complete in its coverage. This process allows for the exploration and a better understanding of the relationships among SSC dimensions and other organizational and SC parameters. There are implications for managers as well. Newer definitions of supply management stress meeting the strategic objectives of the organization with respect to both current and future needs (Monczka et al., 2011). The real challenge is how an organization moves to a “centricity” that produces lasting superior outcomes. Understanding the key requisites for SSC will provide managers with a roadmap to becoming more strategic. Supply managers may use the proposed framework as a basis for strategy formulation. They know that in addition to planning they must develop the talent through applying learning orientation. Further, being strategic will require the firm to move from a transactional posture to one that stresses relationships. Developing a formal supplier relationship program is the first step (Giunipero and Sliva, 2012; Trent et al., 2012). Ultimately, these efforts must produce results that meet supply management performance goals and satisfy stakeholder interests. Doing this will enable a firm to achieve a degree of competitive advantage for the combination of these four first order factors is difficult to imitate and requires the allocation of scarce resources. Managers who are moving their firms to, or who want to improve their current level of, SS need to analyze their firms’ levels of adoption of the four key orientations of SSC. Those beginning a SS process must target achieving these four orientations prior to launching their SS program. Doing so will ensure their firms a better chance of success. Fig. 4 below highlights this conceptual understanding of SSC and its potential impact on SS success. If a firm has a “low degree” of SSC, and its perceived SS success is “low,” it will take the traditional “bid and buy” approach to supply management. Conversely, if SSC is “high” and the perceived SS success is “high,” then the firm will more likely take an “integrated approach” to supply management. While not tested

Perceptionof SS Implementation/Success

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66

9

High

Movement to Broader More Integrated Supply Management

Integrated Proactive Supply Management Utilizing SS

Low

Traditional Supply Management Not Integrated

Movement to Broader More Integrated Supply Management

Low SSC

High SSC

Fig. 4. SSC and its impact on strategic sourcing.

in this study, it is expected that the combination of higher SSC and high perception of SS leads to a more integrated view that will enhance a firm′s SS effectiveness. Low perceived SS or SSC will provide mixed results when the firm is transitioning between traditional supply management and a more strategic outlook. As an obvious corollary then, if a firm amplifies its SSC by adopting the four orientations presented above, it will more likely achieve high SS success. From a supply manager′s perspective, this research provides a greater understanding of the specific dimensions of SSC. Thus, supply managers may use the proposed framework as a basis for supply management and supplier differentiation strategies. Suppliers, on the other hand, must understand the corresponding key evaluation criteria necessary to achieve preferred supplier status.

6. Limitations of the study and suggestions for future research Future research is called for to build an understanding of the extent to which performance outcomes are shaped by SSC. It would be curious to explore the impact on performance in cases of abandoning SSC and the operational repercussions of such shift. This study focuses on SSC as a managerial mindset. Future research is needed to explore projected interdependence between SSC and SS; the managerial philosophy and managerial decisions taken. This likely interdependence raises the question of whether ideologies create a propensity to act, or the accidents of behavior are interpreted and coalesce into ideologies. In other words, future

Please cite this article as: Eltantawy, R.A., Giunipero, L., An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity. Journal of Purchasing and Supply Management (2013), http://dx.doi.org/10.1016/j.pursup.2013.07.001i

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1 research is called for to examine whether SSC is a byproduct of SS, 2 or vice versa. 3 As in any research project, the choices we made in this study 4 imply limitations in the interpretation of our results. First, for 5 instance, by focusing on understanding the sample, we have 6 limited our assessment to a specific unit of analysis. Rather than 7 showing how value is created in buyer–seller relationships overall, 8 our findings refer to a particular context and a specific research 9 question. Second, we obtained data for our research only from the 10 buyer′s perspective of strategic sourcing in key supplier relation11 ships. A vendor′s point of view might differ, either minimally or 12 substantially. Additional research could examine potential gaps 13 between both parties′ value perceptions. Third, our research relies 14 only on single respondents. Other members of the buying organi15 zation might emphasize different value drivers in a key supplier 16 relationship. Because we cannot exclude potential biases, further 17 research could usefully address this limitation. Fourth, the choices 18 we made in developing our sample framework warrant some 19 caution in the generalization of our findings. We sampled respon20 dents among members of the ISM. This approach might favor the 21 inclusion of better-educated purchasing professionals and larger 22 buying organizations. Finally, scholars have called for more long23 itudinal research on strategic sourcing (Narayandas and Rangan, 24 2004; Ulaga and Eggert, 2006). More can be discovered about how 25 strategic sourcing changes over time in close supplier–customer 26 relationships. Further research using a longitudinal design could 27 address this issue. 28 29 30 Q2 Uncited references 31 Anderson and Shimizu (2007), Boyer et al. (2002), Cannon and 32 Homburg (2001), Closs and Mollenkopf (2004), Ganesan (1994), 33 Hewitt et al. (2002), Hult et al. (2002c), Insead and Ghoshal (1996), 34 Jap (1999), Kalwani and Narayandas (1995), Reed and DeFillipi 35 (1990), Smeltzer (1997), Webster (1984). 36 37 38 References 39 40 Ames, Carole, 1984. Achievement attributions and self-instructions under competitive and individualistic goal structures. Journal of Educational Psychology 76 41 (3), 478–487. 42 Ames, Carole, Archer, Jennifer, 1988. Achievement goals in the classroom: students’ 43 learning strategies and motivation processes. Journal of Educational Psychology 80 (September), 260–267. 44 Anderson, J.C., Gerbing, D.W., 1988. Structural equation modeling in practice: a 45 review and recommended two-step approach. Psychological Bulletin 103, 46 411–442. Anderson, J.C., Shimizu, K., 2007. A review of approaches to empirical research on 47 the resource-based view of the firm. Journal of Management 33 (6), 959–986. 48 Armstrong, J., Scott, Overton, Terry S., 1977. Estimating nonresponse bias in mail 49 surveys. Journal of Marketing Research 14 (3), 396–402. 50 Asmus, David, John Griffin. 2012. Strategic Sourcing: Best Practices. Innothink Group. 51 Bagozzi, R.P., Phillips, L.W., 1982. Representing and testing organizational theories: 52 a holistic construal. Administrative Science Quarterly 27, 459–489. 53 Baier, C., Hartmann, E., Moser, R., 2008. Strategic alignment and purchasing efficacy: an exploratory analysis of their impact on financial performance. 54 Journal of Supply Chain Management 44 (4), 36–52. 55 Baines, Tim, Lightfoot, Howard, Peppard, Joe, Johnson, Mark, Tiwari, Ashutosh, 56 Shehab, Essam, Swink, Morgan, 2009. Towards an operations strategy for product-centric servitization. International Journal of Operations & Production 57 Management 29 (5), 494–519. 58 Baker, William E., Sinkula, James M., 1999. The synergistic effect of market 59 orientation and learning orientation on organizational performance. Academy of Marketing Science Journal 27 (4), 411–427. 60 Baker, William E., Sinkula, James M., 2002. Market orientation, learning orientation 61 and product innovation: delving into the organization′s black box. Journal of 62 Market-Focused Management 5 (1), 5–23. Barney, J.B., 1991. Firm resources and sustained competitive advantage. Journal of 63 Management 17 (1), 99–120. 64 Barney, J.B., 2001. Is the resource-based ‘view’ a useful perspective for strategic 65 management research? Yes. Academy of Management Review 26 (1), 41–56. 66 Bentler, D.A., 1989. Controlling unemployment costs. Strategic Finance 71, 43–53.

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