Studying the Behavioral Antecedents of Logistics Outsourcing Intentions : Evidence from Finnish Trading and Manufacturing Companies

Abstract

From the 1990s onwards, outsourcing business functions has undergone a shift from tactical decision to a strategic one, and although today some companies are already withdrawing their outsourced functions back in-house, studies show that outsourcing still remains an attractive alternative for enhancing competitiveness. The strategic angle has meant a stronger focus on the quality of relationship between involved parties, yet the early stages of the outsourcing process where it is considered whether to outsource or not have lacked attention. Although theories like transaction cost economics and core competency approach have been proposed to aid in the decision-making, these have proven to be difficult to be implemented into practice. In this thesis, the problem is approached by finding out what drivers form the base of intentions to outsource logistics functions from an individual’s point of view. By conducting a literary survey logistics and its outsourcing were outlined in terms of a company’s overall business goals, and psychological factors related to strategic decision-making were assessed. Based on the literature, five constructs were identified to predict the intention to increase logistics outsourcing: attitudes, subjective norms, perceived behavioral control, importance of logistics, and logistics asset specificity. These were included in a conceptual framework, which further presents a connection between the intention and the previous level of logistics outsourcing. Web-based questionnaire survey data gathered as a part of Finland State of Logistics 2018 survey was analyzed with covariance based structural equation modeling, and the data was found to support the effect of attitudes and subjective norms on intention, as well as the relationship between intention and previous level of outsourcing. On the contrary, the influence of importance of logistics and logistics asset specificity on intentions could not be confirmed. The results suggest that individuals do not necessarily deliberate the aspects suggested by normative theories on whether to outsource or not. Instead they may rely on psychological factors such as attitudes and norms prior to forming an intention to consent to a strategic decision such as increasing the outsourcing of logistics functions. This offers an implication for what to take into account when designing future theoretical frameworks and processes regarding logistics outsourcing in practice.