Managing Quality in Outsourced Production: Construct Development and Measurement Validation

Abstract

There exists a large body of academic and practitioner literature that has led to a deep understanding of the practices and behaviors necessary to manage quality within a firm's own factory walls. However, the literature on the effectiveness of the approaches used by buyers to manage the quality of outsourced production is surprisingly scant. In this paper, the authors develop and evaluate scales that are necessary for academic research on the management of production outsourced to contract manufacturers (CMs). They use the existing empirical, analytical, and practitioner literature to generate and define relevant constructs. They develop new scales where necessary and adapt existing scales where possible to measure these constructs. They then follow a two-stage approach to assess their reliability and validity. In the first stage, the authors follow a rigorous item-sorting process to refine these scales. In the second stage, they employ factor analyses using data collected from 123 buyers and 100 CMs to formally assess multiple forms of reliability and validity; they find that most of their scales exhibit good psychometric properties and can be used for research. The authors conclude the paper with some suggestions for research on managing quality in outsourced production.

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