The relationship development aspect of production transfer

Abstract

Production transfers are a result of outsourcing and offshoring decisions. Because of the strategic focus of the outsourcing literature, the operational issues of relationship development between sender and receiver and its impact on the transfer progress have not been fully depicted. The purpose of the present paper is to explore relationship development during production transfer. To fulfil this purpose, we studied three different production transfers and derived four propositions for further testing. Our main conclusions included that dependence and power gradually shift between the sender and the receiver and that the relationship between them sets the arena for what types of relationships can be developed between the receiver and the suppliers. Furthermore, short social distances can bridge cultural and technological distances to some extent, because it motivates the actors to bring their relationship into a more developed state. Finally, we noticed that the headquarters’ involvement can work both as an inhibitor as well as a converter.