An Investigation into the Nature of the Relationship of Corporate Culture to Logistics Outsourcing Decisions

The purpose of this research was to investigate the relationships between corporate culture and logistics outsourcing. Using primarily depth interviews, data was collected from twenty-eight participants from three companies. Grounded theory methodology was utilized to interpret the data. Models were developed that provide frameworks for understanding the role cultural orientations take in influencing the “perform versus buy” decision in logistics outsourcing in the participating companies, and in the approaches those firms take regarding the relationships they develop with logistics suppliers.

The findings of the research indicate that, for the participating companies, cultural orientations concerning control and transactional/relational exchange influence the outsourcing and inter-firm relationship strategies of the buying firm. These strategies in turn affect the extent of logistics outsourcing the participating firms engaged in, and the types of relationships those firms established with their logistics suppliers. An additional finding of the research is that a cyclical, five-stage process of logistics outsourcing occurred within the participating firms. The model of this process provides a new framework for studying decision making in firms that are considering or are engaged in logistics outsourcing.

Managerial implications for both buying and selling firms, further opportunities for research, and a proposed research agenda are provided.