Effects of internal and relational capabilities on outsourcing: an integrated model

The purpose of this paper is to analyse the impact of relational capability compared to that of internal capability on outsourcing, and the influence of relational capability as a moderating variable between outsourcing and internal capabilities. The paper aims to integrate the internal and relational perspectives in a single model of strategic evaluation.

This work analyses the outsourcing process in a representative sample of firms operating in a region of Spain. To accomplish the research objectives, a personal survey was conducted using a questionnaire to evaluate 13 activities of the order distribution process in the supply chain.

The results indicate that internal capabilities have a negative effect on outsourcing while relational capabilities have a positive effect. They also show that, the greater the relational capabilities of an operation are, the less significant the relationship between internal capabilities and outsourcing will be.

Firstly, by using the proposed model, companies can evaluate their internal and relational strategies and compare them to the sector averages at a given moment. Secondly, they can detect opportunities to improve competitiveness and develop relational capabilities for some of the activities that they wish to outsource. This work helps identify which process activities to outsource and which type of relationship should be maintained to develop a set of capabilities.

This paper provides a comprehensive application of a theoretical framework in a new model of strategic evaluation of outsourcing. Another innovation of this work is the introduction of relational capabilities as a variable moderating the relationship between internal capabilities and outsourcing.