How manufacturers' long-term orientation toward suppliers influences outsourcing performance

This study aims to examine the mechanisms that connect manufacturers' long-term orientation toward suppliers to outsourcing performance. Using a data set collected from 244 manufacturing companies operating in China, this study tests several proposed hypotheses. The results of this study reveal that: 1) long-term orientation has a positive impact on the governance mechanism (i.e. both contractual and relational governance) and supplier development, subsequently enhancing outsourcing performance; 2) supplier development not only enhances outsourcing performance directly, but also does so indirectly by promoting both contractual and relational governance. This study contributes to current theory of outsourcing relationship management and further provides practical insights into the mechanisms that help manufacturers enhance outsourcing performance.