TY - JOUR
T1 - Why locate manufacturing in a high-cost country? A case study of 35 production location decisions
AU - Ketokivi, Mikko
AU - Turkulainen, Virpi
AU - Seppälä, Timo
AU - Rouvinen, Petri
AU - Ali-Yrkkö, Jyrki
N1 - Funding Information:
This paper has been completed as a part of the InSource project conducted by ETLA, The Research Institute of the Finnish Economy, and KTH, Royal Institute of Technology in Stockholm, Sweden. We gratefully acknowledge financial support by the Finnish Funding Agency for Innovation (Tekes), Sweden's Innovation Agency (VINNOVA), the BRIE-ETLA research project, and Academy of Finland. We also thank the 35 case companies for investing a considerable amount of their time and their expertise to this research effort.
Publisher Copyright:
© 2017 Elsevier B.V.
PY - 2017/3/1
Y1 - 2017/3/1
N2 - In this paper, we examine in detail 35 final assembly location decisions to gain understanding of the manufacturing location decision from strategy and economic policy perspectives. We are particularly interested in the decision to locate final assembly specifically in a high-cost (high GDP per capita) environment. In contrast with the earlier literature, we focus not just on manufacturing activities themselves, but also the key linkages between production, market, supply chain, and product development. These linkages are examined using three key concepts from theories of organization design: formalization, specificity, and coupling. Using these concepts, an analysis of the micro-structure of each case reveals important commonalities that inform our understanding of location decisions. We conclude by discussing the policy implications of our findings.
AB - In this paper, we examine in detail 35 final assembly location decisions to gain understanding of the manufacturing location decision from strategy and economic policy perspectives. We are particularly interested in the decision to locate final assembly specifically in a high-cost (high GDP per capita) environment. In contrast with the earlier literature, we focus not just on manufacturing activities themselves, but also the key linkages between production, market, supply chain, and product development. These linkages are examined using three key concepts from theories of organization design: formalization, specificity, and coupling. Using these concepts, an analysis of the micro-structure of each case reveals important commonalities that inform our understanding of location decisions. We conclude by discussing the policy implications of our findings.
KW - Case study
KW - International operations
KW - Manufacturing location decisions
KW - Supply chain management
UR - http://www.scopus.com/inward/record.url?scp=85010210729&partnerID=8YFLogxK
U2 - 10.1016/j.jom.2016.12.005
DO - 10.1016/j.jom.2016.12.005
M3 - Article
AN - SCOPUS:85010210729
SN - 0272-6963
VL - 49-51
SP - 20
EP - 30
JO - Journal of Operations Management
JF - Journal of Operations Management
ER -