LAUSR

Firms in many industries are faced with challenges in effectively managing their sourcing portfolios, defined as a firm’s collection of different sourcing choices (e.g., domestic in-house, domestic outsourcing, offshore outsourcing and captive offshoring) used to conduct a particular value-chain activity. While existing research provides valuable insights on the key factors driving firms’ decision-making regarding individual sourcing choice, important questions remain regarding antecedents and the evolution of portfolios of sourcing choices. We adopt a co-evolutionary perspective to answer the questions of how firms configure their sourcing portfolios, and what triggers changes in these configurations over time. In this study, we examine changes in bio-pharmaceutical firms’ sourcing portfolios for clinical trials. Based on qualitative case study analysis of four firms in this industry, we identify and track changes in internal and external processes of variation, selection and retention. Our study contributes to the co-evolutionary perspective on offshoring and outsourcing by refining the organizational level of analysis to consider portfolios as an important unit of analysis, and also by identifying evolutionary processes and mapping an evolutionary trajectory of changes in sourcing portfolios.