Outsourcing, subcontracting-in and radical innovativeness: The moderating effect of manufacturing strategy

Purpose - The authors aim to develop and test hypotheses that link outsourcing and subcontracting-in activities of small high-tech firms to their radical innovativeness. In addition, they seek to investigate how a firm's strategy moderates the associations between their outsourcing and subcontracting-in activities and radical innovativeness. Design/methodology/ approach - The authors utilized regression analytical technique and categorical moderation analytical technique to test their hypotheses on survey data of 579 firms. Findings - Results show that outsourcing has a positive association with radical innovativeness. In contrast, subcontracting-in shows a negative association with radical innovativeness. Finally, the influence of both outsourcing and subcontracting-in activities on radical innovativeness are contingent upon a firm's manufacturing strategy. Research limitations/ implications - There are potential limitations relating to the authors' use of secondary data. There is a need to investigate the processes through which outsourcing and subcontracting-in relate to innovation performance. Practical implications - An implication of this study is that in order to develop radical innovativeness, firms need to consider their strategic or competitive inclination when evaluating their outsourcing and subcontracting-in decisions and activities. Social implications - There are also social implications since outsourcing and subcontracting-in activities involve social relationships. Originality/value - Linking boundary spanning activities of firms to innovation performance represents a contribution to the literature. Further, establishing that the effectiveness of such boundary activities depends on a firm's specific manufacturing strategy represents a contribution.