How does concurrent sourcing affect performance?

Purpose - "Concurrent sourcing" is a term used by Parmigiani to describe the phenomenon where a firm simultaneously buys and makes the same good or service. The purpose of this paper is to develop propositions that suggest how concurrent sourcing affects performance. Design/methodology/approach - Based on transaction cost, agency, neoclassical economic, knowledge-based, and resource-based theory, it is proposed to show how concurrent sourcing affects performance. Findings - The paper argues that concurrent sourcing improves performance when firms face a combination of volume uncertainty, technological uncertainty, performance uncertainty, non-decomposability, transaction-specific investments, and strong internal and external capabilities. Research limitations/implications - The paper maps the relationships between concurrent sourcing and performance and discusses how these relationships can be modelled. The propositions and discussion offer researchers a starting-point for further research. Practical implications - The propositions that are developed suggest that managers should consider using concurrent sourcing when they face problems caused by volume uncertainty, technological uncertainty, performance uncertainty, non-decomposability, and asset specificity. Concurrent sourcing can also be a way to exploit both strong internal capabilities and external suppliers' strong capabilities. Originality/value - The main contribution is a number of propositions, explanations, and discussions regarding how concurrent sourcing affects performance of the market and the hierarchy.