Do outsourcing and non-outsourcing New Zealand SMEs perform and perceive international outsourcing differently?

Abstract

International outsourcing of goods and services has become an integral part of the value chain of many firms. However, most outsourcing research relates to MNEs, with little emphasis on SMEs. This study aims to address this significant gap in research by focussing on international outsourcing perception and performance differences between outsourcing and non-outsourcing manufacturing SMEs in New Zealand. Based on a sample of 74 New Zealand SMEs within the manufacturing sector, the findings suggest that SMEs engaged in international outsourcing perform significantly better than non-outsourcing SMEs. Both outsourcing and non-outsourcing SMEs have similar perceptions regarding outsourcing challenges. However, the former perceive outsourcing benefits more favourably. The findings are discussed in the light of resource based view and core competency theory of the firm.