A strategic needs perspective on operations outsourcing and other inter-firm relationships Erica Mazzola, Giovanni Perrone n DICGIM, Universit  a degli Studi di Palermo, Viale delle Scienze, 90128 Palermo, Italy article info Article history: Received 8 April 2011 Accepted 15 February 2013 Keywords: Inter-firm relationships Inter-firm relationship formation Governance mode choice Secondary data analysis abstract This paper considers two issues: the formation of inter-firm relationships, and the choice of governance form. These have been widely investigated in both the strategic management and operations manage- ment fields. This paper contributes to the literature in three ways. First, we address why firms enter inter-firm relationships by hypothesizing that managers enter them to pursue three strategic needs, that is: efficiency/effectiveness, knowledge/learning, and global market access. Our first contribution evidences the relationship between the above strategic needs and a number of operational objectives that managers normally pursue in an inter-firm relationship. Second, we hypothesize how the achievement of the above strategic needs influences the choice of governance form. Third, we compare our framework with the operations management approach to strategic networks by evidencing similarities between the two approaches and showing that managers pursue a similar approach when they face inter-firm agreement issues, whether agreements are supply-chain- or strategy-oriented. We empirically test our framework using secondary data consisting of 95 inter-firm agreements. Our findings largely support the theoretical predictions, and also have important practical implications. First, our results offer managers ‘‘practice’’ suggestions on what kinds of objectives can be pursued together in inter-firm relationships to achieve specific strategic needs, and which governance form is most suitable, depending on the strategic need in question. Second, we consider the strategic reasoning concerning inter-firm relationship management, and some engineering issues, such as time and quality objectives, that, while largely considered in the operations management literature, are often neglected in the strategic management field. & 2013 Elsevier B.V. All rights reserved. 1. Introduction In 2007, Chartered Semiconductor signed an alliance with IBM and Samsung to develop its chip business. In an article published by Hamm (2007), the CEO of Chartered declared that this agree- ment would be beneficial for all partners involved, since they did not have large enough volumes in the competitive and costly business of chip manufacturing to go on alone. Banding together their energies, the three manufacturers were able to benefit from significant cost reductions, learning opportunities and economies of scale associated with large-scale global deployment, and improve- ments in technical efficiency. Moreover, the fact that these three companies could all produce a chip in the same way was attractive to customers. In 2012 General Motors (GM) and PSA Peugeot Citro¨ en announced the creation of a long-term and broad-scale strategic alliance that leverages the combined strengths and capabilities of the two companies, contributes to the profitability of both partners and strongly improves their innovativeness. The two firms shared engineering development and hoped to launch the first common design by 2016. In a press release on the alliance appeared on Pearson and Schmidt (2012), the two CEOs claimed that they were investing together in the motor industry to combine GM’s expertise with PSA Peugeot Citro ¨ en’s capabilities. The alliance allowed both companies to drive new growth opportunities, reduce complexity and risks of new vehicle programs, and improve innovation rate of new projects. In another instance, in 2011 NEC Corporation and Lenovo closed the establishment of a joint venture (Yamaguchi, 2011). The agreement aligned NEC, Japan’s number one PC company, with Lenovo, the fastest growing top-five PC maker in the world. The new joint venture gave both companies a unique opportunity to grow in the Japanese PC businesses through a stronger market position, an enhanced product portfolio, and expanded distribu- tion channels. ‘‘The agreement with NEC is a perfect fit for our strategy. It reinforces our commitment to our core PC business while, at the same time, providing important new opportunities for growth in a new market, such as Japan’’ said Yang Yuanqing, Contents lists available at SciVerse ScienceDirect journal homepage: www.elsevier.com/locate/ijpe Int. J. Production Economics 0925-5273/$ - see front matter & 2013 Elsevier B.V. All rights reserved. http://dx.doi.org/10.1016/j.ijpe.2013.02.012 n Corresponding author. Tel.: þ39 91 665 7035; fax: þ39 91 665 7039. E-mail address: giovanni.perrone@unipa.it (G. Perrone). iPlease cite this article as: Mazzola, E., Perrone, G., A strategic needs perspective on operations outsourcing and other inter-firm relationships. International Journal of Production Economics (2013), http://dx.doi.org/10.1016/j.ijpe.2013.02.012 Int. J. Production Economics ] (]]]]) ]]]–]]]