Operational effects and firms' responses Perspectives of New Zealand apparel firms on international outsourcing

Purpose - The purpose of this paper is to clarify the impact of international outsourcing on manufacturing strategy and performance of apparel manufacturing firms. The authors aim to show how managers address the effects of international outsourcing on four dimensions of manufacturing strategy cost, quality, flexibility and delivery. Design/methodology/approach - The paper utilises a qualitative exploratory approach. The authors adopted a case study method, collecting data through face-to-face, semi-structured interviews with managers of six apparel manufacturing firms, selected on the basis of a number of criteria, including their use of international outsourcing. Findings - The findings show that international outsourcing generates both positive and negative effects on the firms' competencies in four manufacturing dimensions (cost, quality, flexibility and delivery). A conceptual framework is presented that shows how firms' managerial actions carried out to address the effects of outsourcing play a crucial role in determining their manufacturing performance. Research limitations/implications - Because the sample comprised small and medium-sized apparel firms from New Zealand, the findings may lack generalisability. Further research could expand this work to large multinational companies and service providers in international outsourcing. Practical implications - The findings suggest that managers of apparel firms which engage in international outsourcing of manufacturing need to consider the impacts on their manufacturing strategy, particularly with respect to the potential trade-offs between the manufacturing priorities. Originality/value - The paper addresses a research gap in the outsourcing and manufacturing literatures by exploring the effects of international outsourcing on manufacturing strategy, and the impact of managerial responses to these effects, on firm performance.