Seminario

A New Dimension in Global Value Chains:

Control vs. Delegation in Input Procurement
14 ottobre 2021
Orario di inizio 
14:00
Online
Destinatari: 
Tutti/e
Partecipazione: 
Online
Email per prenotazione: 
Scadenza prenotazioni: 
14 ottobre 2021, 12:30
Contatti: 
school.socialsciences@unitn.it
Speaker: 
Bilgehan Karabay, Royal Melbourne Institute of Technology, Australia

Abstract

We study the optimal organizational structure of a firm in a sequential supply chain when investments are relationship specific and contracts are incomplete. The market structure for the final product is monopolistic competition. Production follows a preordered sequence and exhibits high complementarity between stages. There are three types of actors: upstream suppliers, downstream suppliers and final-good producers (firms). In designing their organizational structure, firms in each stage choose not only the ownership structure, i.e., vertical integration versus outsourcing, but also the input-procurement strategy, i.e., delegation versus control. The separation of asset ownership and input-procurement rights leads to a novel organizational mode, which we call `outsourcing with delegation.' We determine the implications of this new organizational mode in firms' global sourcing decisions.