Reconceptualizing Plural Sourcing

Firms often procure the same input via multiple means, e.g., making and buying. Recent papers exploring such plural sourcing modes have yielded rich, but inconsistent, theoretical and empirical insights. We suggest that resolving these inconsistencies and setting the foundation for future work requires reconceptualizing two aspects of plural sourcing: what and how. “What” refers to a surprising lack of clarity of what is meant by the “same input”. We reconceptualize same as a spectrum of degrees of similarity and propose how similarity might be measured. “How” refers to the governance modes combined in plural sourcing. Extending the literature’s predominant focus on make-and-buy, we reconceptualize plural sourcing as a set of combined governance modes—make-and-buy, make-and-ally and buy-and-ally—distinguished from single modes of governance by certain shared characteristics, but differing from each other in their capabilities and limitations. We demonstrate the potential of our reconceptualization with propositions predicting the use of plural sourcing and choice of specific plural sourcing modes as a function of similarity, technological volatility and performance ambiguity. Reconceptualizing “what” and “how” resolves strains between existing studies, strengthens the foundation for future work and provides theoretical, empirical and managerial insights relevant to governance choice situations beyond plural sourcing itself.