A decision-making model to outsource complex product systems research and development projects

https://doi.org/10.35912/amor.v2i4.1115
Published: Jun 10, 2022

Abstract:

Purpose: Complex product systems are goods with high technology. Research and development on their production requires resources beyond the capability of an organization. This study aimed to propose a decision-making model to outsource CoPS R&D projects.

Research methodology: The decision-making criteria were identified using the literature review and the Fuzzy Delphi method. Two conceptual models were developed using structural equation modeling. The pattern of relationships among criteria were determined by employing the DEMATEL technique. Then to prioritize the criteria and select between alternatives, the analytical network process was utilized.

Results: In the intra-organizational model, “project characteristics” has a positive effect on “requirements” and the latter has a similar effect on “competency”. In the extra-organizational model, the “competency” has a positive effect on the “task performing capability”, and the latter has a similar effect on the “adaptability”. A two-stage decision model was developed. In the first stage, the decision to in/outsource the project is taken. In the second one, the mechanism of outsourcing is determined.

Limitation: Due to the breadth of types of inter-organizational cooperation in the range of integration between the organization and the supplier, only one of these types, namely outsourcing, has been addressed.

Contribution: An organization cannot outsource the development of CoPS unless it enjoys the technological, contractual, project control, integration, and soft technologies competencies. Furthermore, appropriate communication strategies and adequate financial resources are required. The managers of organizations developing CoPS such as airplanes, missiles, and power plants and can utilize the implications of the model.

Keywords:
1. CoPS
2. R&D
3. Outsourcing
4. Decision making
5. SEM
6. ANP
Authors:
Hassan Torabi
Faculty of Management and Industrial Engineering, Malek Ashtar University of Technology, Tehran, Iran
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How to Cite
Torabi, H. (2022). A decision-making model to outsource complex product systems research and development projects. Annals of Management and Organization Research, 2(4), 289–313. https://doi.org/10.35912/amor.v2i4.1115
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Issue & Section
Vol. 2 No. 4 (2021): May
Articles
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References

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    Beigi, N. A. K. (2020). Investigating, identifying and evaluating organizational and infrastructural strategic factors affecting organizational management processes from the perspective of productivity management. Annals of Management and Organization Research, 1(4), 285-305.

    Bojadziev, G., & Bojadziev, M. (1995). Fuzzy sets, fuzzy logic, applications (Vol. 5). World scientific.

    Bryman, A. (2016). Social research methods. Oxford university press.

    Buss, P., & Peukert, C. (2015). R&D outsourcing and intellectual property infringement. Research Policy, 44(4), 977-989.

    Cheng, C.-H., & Lin, Y. (2002). Evaluating the best main battle tank using fuzzy decision theory with linguistic criteria evaluation. European Journal of Operational Research, 142(1), 174-186.

    Cheng, X., Fu, S., & de Vreede, G.-J. (2021). Determinants of trust in computer-mediated offshore software-outsourcing collaboration. International Journal of Information Management, 57, 102301.

    Cheng, Y., & Johansen, J. (2014). Operations network development: internationalisation and externalisation of value chain activities. Production Planning & Control, 25(16), 1351-1369.

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    Dedehayir, O., Nokelainen, T., & Mäkinen, S. J. (2014). Disruptive innovations in complex product systems industries: A case study. Journal of Engineering and Technology Management, 33, 174-192.

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    Hsu, C.-C., & Liou, J. J. H. (2013). An outsourcing provider decision model for the airline industry. Journal of Air Transport Management, 28, 40-46. https://doi.org/https://doi.org/10.1016/j.jairtraman.2012.12.009

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    Li, S., Kang, M., & Haney, M. H. (2017). The effect of supplier development on outsourcing performance: the mediating roles of opportunism and flexibility. Production Planning & Control, 28(6-8), 599-609.

    Lin, H., & Darnall, N. (2015). Strategic alliance formation and structural configuration. Journal of Business Ethics, 127(3), 549-564.

    Mazumder, S., & Garg, S. (2021). Decoding digital transformational outsourcing: The role of service providers’ capabilities. International Journal of Information Management, 58, 102295.

    Munjal, S., Requejo, I., & Kundu, S. K. (2019). Offshore outsourcing and firm performance: Moderating effects of size, growth and slack resources. Journal of Business Research, 103, 484-494.

    Naghizadeh, M., Manteghi, M., Ranga, M., & Naghizadeh, R. (2016). Managing integration in complex product systems: The experience of the IR-150 aircraft design program. Technological Forecasting and Social Change.

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    Poudeh, H. D., Cheshmberah, M., Torabi, H., Gavareshki, M. H. K., & Hosnavi, R. (2019). Determining and prioritizing the factors influencing the outsourcing of Complex Product Systems R&D projects employing ANP and grey-DEMATEL method (case study: Aviation Industries Organization, Iran). Technology in Society, 56, 57-68.

    Safdari Ranjbar, M., Ghazinoori, S., & Manteghi, M. (2021). Evolution of Iran’s gas turbine sectoral innovation system as a complex product system (CoPS). African Journal of Science, Technology, Innovation and Development, 1-15.

    Safdari Ranjbar, M., Rahman Seresht, H., Manteghi, M., & Ghazi Nouri, S. S. (2016a). Acquisition of knowledge and technological Capabilities of Manufacturing th Complex Product Systems in Developing Countries: Case Study: IGT25 Gas Turbine 6th International and 10th National Conference on Technology Management, Tehran, Iran.

    Safdari Ranjbar, M., Rahman Seresht, H., Manteghi, M., & Ghazi Nouri, S. S. (2016b). The propulsions of aquisiting and creating technological capabilities for Manufacturing the Complex Product Systems in Latecomer firms: A Case Study of the Oil Turbo Compressor (OTC). Innovation Management, 5(3), 519-529.

    Smith, E. (2017). Globalization and the colonial origins of the great divergence: intercontinental trade and living standards in the Dutch East India Company's commercial empire, c. 1600-1800. Economic History Review, 70(2), 679-680. https://doi.org/10.1111/ehr.12555

    Tadelis, S., & Williamson, O. E. (2012). Transaction cost economics. The handbook of organizational economics, 159.

    TAGHIZADEH, G., TORABI, H., & RAJABZADEH, M. (2022). Modeling and analysis of effective factors in the outsourcing of R&D projects by SEM and ISM approaches: A case study of" Iranian aviation industries organization". Sigma Journal of Engineering and Natural Sciences, 40(1), 196-207.

    Tirkolaee, E. B., Goli, A., & Weber, G.-W. (2020). Fuzzy mathematical programming and self-adaptive artificial fish swarm algorithm for just-in-time energy-aware flow shop scheduling problem with outsourcing option. IEEE transactions on fuzzy systems, 28(11), 2772-2783.

    Warner, M. (2017). On globalization ‘with Chinese characteristics’? Asia Pacific Business Review, 23(3), 309-316.

    Yassine, A. A. (2019). Managing the Development of Complex Product Systems: An Integrative Literature Review. IEEE Transactions on Engineering Management.

    Yeo, C., & Saboori-Deilami, V. (2017). Strategic challenges of outsourcing innovation in global market. Asia Pacific Journal of Innovation and Entrepreneurship.

    Yuan, Y., Chu, Z., Lai, F., & Wu, H. (2020). The impact of transaction attributes on logistics outsourcing success: A moderated mediation model. International Journal of Production Economics, 219, 54-65.

    Zhou, F., Wang, X., Goh, M., Zhou, L., & He, Y. (2019). Supplier portfolio of key outsourcing parts selection using a two-stage decision making framework for Chinese domestic auto-maker. Computers & Industrial Engineering, 128, 559-575.

    Zhou, J., Zhu, J., & Wang, H. (2020). Strategic cooperation with capital-constrained supplier and downstream competition in complex product systems. Computers & Industrial Engineering, 139, 106139.

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  2. Babin, R., & Quayle, A. (2016). ISO 37500–Comparing outsourcing life-cycle models. Strategic Outsourcing: An International Journal.
  3. Barge-Gil, A., & López, A. (2014). R&D determinants: Accounting for the differences between research and development. Research policy, 43(9), 1634-1648.
  4. Beaugency, A., Sakinç, M. E., & Talbot, D. (2015). Outsourcing of strategic resources and capabilities: opposing choices in the commercial aircraft manufacturing. Journal of Knowledge Management, 19(5), 912-931.
  5. Beigi, N. A. K. (2020). Investigating, identifying and evaluating organizational and infrastructural strategic factors affecting organizational management processes from the perspective of productivity management. Annals of Management and Organization Research, 1(4), 285-305.
  6. Bojadziev, G., & Bojadziev, M. (1995). Fuzzy sets, fuzzy logic, applications (Vol. 5). World scientific.
  7. Bryman, A. (2016). Social research methods. Oxford university press.
  8. Buss, P., & Peukert, C. (2015). R&D outsourcing and intellectual property infringement. Research Policy, 44(4), 977-989.
  9. Cheng, C.-H., & Lin, Y. (2002). Evaluating the best main battle tank using fuzzy decision theory with linguistic criteria evaluation. European Journal of Operational Research, 142(1), 174-186.
  10. Cheng, X., Fu, S., & de Vreede, G.-J. (2021). Determinants of trust in computer-mediated offshore software-outsourcing collaboration. International Journal of Information Management, 57, 102301.
  11. Cheng, Y., & Johansen, J. (2014). Operations network development: internationalisation and externalisation of value chain activities. Production Planning & Control, 25(16), 1351-1369.
  12. Choi, J. J., Ju, M., Kotabe, M., Trigeorgis, L., & Zhang, X. T. (2018). Flexibility as firm value driver: Evidence from offshore outsourcing. Global Strategy Journal, 8(2), 351-376.
  13. Cuervo-Cazurrra, A., Mudambi, R., & Pedersen, T. (2017). Globalization: Rising skepticism. Global Strategy Journal, 7(2), 155-158. https://doi.org/10.1002/gsj.1156
  14. Cunningham, I., & James, P. (2017). Analysing public service outsourcing: The value of a regulatory perspective. Environment and Planning C: Politics and Space, 35(6), 958-974.
  15. Dedehayir, O., Nokelainen, T., & Mäkinen, S. J. (2014). Disruptive innovations in complex product systems industries: A case study. Journal of Engineering and Technology Management, 33, 174-192.
  16. Ellram, L., & Tate, W. L. (2015). Redefining supply management? s contribution in services sourcing. Journal of Purchasing and Supply Management, 21(1), 64-78.
  17. Ertosun, O. G., & Adiguzel, Z. (2018). Leadership, personal values and organizational culture. In Strategic design and innovative thinking in business operations (pp. 51-74). Springer.
  18. Espino-Rodríguez, T. F., Chun-Lai, P., & Gil-Padilla, A. M. (2017). Does outsourcing moderate the effects of asset specificity on performance? An application in Taiwanese hotels. Journal of Hospitality and Tourism Management, 31, 13-27. https://doi.org/https://doi.org/10.1016/j.jhtm.2016.10.003
  19. Feng, T., Ren, Z. J., & Zhang, F. (2019). Service outsourcing: Capacity, quality and correlated costs. Production and Operations Management, 28(3), 682-699.
  20. Forozandeh, M. (2021). The effect of supply chain management challenges on research and development projects using Fuzzy DEMATEL and TOPSIS approach. Annals of Management and Organization Research, 2(3), 175-190.
  21. Gelderman, C. J., Semeijn, J., & Mertschuweit, P. P. (2016). The impact of social capital and technological uncertainty on strategic performance: The supplier perspective. Journal of Purchasing and Supply Management, 22(3), 225-234.
  22. Gholz, E., James, A. D., & Speller, T. H. (2018). The second face of systems integration: An empirical analysis of supply chains to complex product systems. Research policy, 47(8), 1478-1494.
  23. Ghorbani, S., & Khanachah, S. N. (2020a). Investigating the reasons for failures and delays in R&D projects with the project management approach. Annals of Management and Organization Research, 1(4), 319-334.
  24. Ghorbani, S., & Khanachah, S. N. (2020b). Provide a model for establishing a comprehensive knowledge management system in knowledge-based organizations based on success factors. Annals of Management and Organization Research, 2(1), 1-12.
  25. Hsu, C.-C., & Liou, J. J. H. (2013). An outsourcing provider decision model for the airline industry. Journal of Air Transport Management, 28, 40-46. https://doi.org/https://doi.org/10.1016/j.jairtraman.2012.12.009
  26. Killen, C. P., Geraldi, J., & Kock, A. (2020). The role of decision makers’ use of visualizations in project portfolio decision making. International Journal of Project Management, 38(5), 267-277.
  27. Lambrechts, W., & Van Petegem, P. (2016). The interrelations between competences for sustainable development and research competences. International Journal of Sustainability in Higher Education.
  28. Li, S., Kang, M., & Haney, M. H. (2017). The effect of supplier development on outsourcing performance: the mediating roles of opportunism and flexibility. Production Planning & Control, 28(6-8), 599-609.
  29. Lin, H., & Darnall, N. (2015). Strategic alliance formation and structural configuration. Journal of Business Ethics, 127(3), 549-564.
  30. Mazumder, S., & Garg, S. (2021). Decoding digital transformational outsourcing: The role of service providers’ capabilities. International Journal of Information Management, 58, 102295.
  31. Munjal, S., Requejo, I., & Kundu, S. K. (2019). Offshore outsourcing and firm performance: Moderating effects of size, growth and slack resources. Journal of Business Research, 103, 484-494.
  32. Naghizadeh, M., Manteghi, M., Ranga, M., & Naghizadeh, R. (2016). Managing integration in complex product systems: The experience of the IR-150 aircraft design program. Technological Forecasting and Social Change.
  33. Newman, W. L. (1991). Social research methods: Qualitative and quantitative approaches. Allyn and Bacon.
  34. Poudeh, H. D., Cheshmberah, M., Torabi, H., Gavareshki, M. H. K., & Hosnavi, R. (2019). Determining and prioritizing the factors influencing the outsourcing of Complex Product Systems R&D projects employing ANP and grey-DEMATEL method (case study: Aviation Industries Organization, Iran). Technology in Society, 56, 57-68.
  35. Safdari Ranjbar, M., Ghazinoori, S., & Manteghi, M. (2021). Evolution of Iran’s gas turbine sectoral innovation system as a complex product system (CoPS). African Journal of Science, Technology, Innovation and Development, 1-15.
  36. Safdari Ranjbar, M., Rahman Seresht, H., Manteghi, M., & Ghazi Nouri, S. S. (2016a). Acquisition of knowledge and technological Capabilities of Manufacturing th Complex Product Systems in Developing Countries: Case Study: IGT25 Gas Turbine 6th International and 10th National Conference on Technology Management, Tehran, Iran.
  37. Safdari Ranjbar, M., Rahman Seresht, H., Manteghi, M., & Ghazi Nouri, S. S. (2016b). The propulsions of aquisiting and creating technological capabilities for Manufacturing the Complex Product Systems in Latecomer firms: A Case Study of the Oil Turbo Compressor (OTC). Innovation Management, 5(3), 519-529.
  38. Smith, E. (2017). Globalization and the colonial origins of the great divergence: intercontinental trade and living standards in the Dutch East India Company's commercial empire, c. 1600-1800. Economic History Review, 70(2), 679-680. https://doi.org/10.1111/ehr.12555
  39. Tadelis, S., & Williamson, O. E. (2012). Transaction cost economics. The handbook of organizational economics, 159.
  40. TAGHIZADEH, G., TORABI, H., & RAJABZADEH, M. (2022). Modeling and analysis of effective factors in the outsourcing of R&D projects by SEM and ISM approaches: A case study of" Iranian aviation industries organization". Sigma Journal of Engineering and Natural Sciences, 40(1), 196-207.
  41. Tirkolaee, E. B., Goli, A., & Weber, G.-W. (2020). Fuzzy mathematical programming and self-adaptive artificial fish swarm algorithm for just-in-time energy-aware flow shop scheduling problem with outsourcing option. IEEE transactions on fuzzy systems, 28(11), 2772-2783.
  42. Warner, M. (2017). On globalization ‘with Chinese characteristics’? Asia Pacific Business Review, 23(3), 309-316.
  43. Yassine, A. A. (2019). Managing the Development of Complex Product Systems: An Integrative Literature Review. IEEE Transactions on Engineering Management.
  44. Yeo, C., & Saboori-Deilami, V. (2017). Strategic challenges of outsourcing innovation in global market. Asia Pacific Journal of Innovation and Entrepreneurship.
  45. Yuan, Y., Chu, Z., Lai, F., & Wu, H. (2020). The impact of transaction attributes on logistics outsourcing success: A moderated mediation model. International Journal of Production Economics, 219, 54-65.
  46. Zhou, F., Wang, X., Goh, M., Zhou, L., & He, Y. (2019). Supplier portfolio of key outsourcing parts selection using a two-stage decision making framework for Chinese domestic auto-maker. Computers & Industrial Engineering, 128, 559-575.
  47. Zhou, J., Zhu, J., & Wang, H. (2020). Strategic cooperation with capital-constrained supplier and downstream competition in complex product systems. Computers & Industrial Engineering, 139, 106139.