Theoretical considerations for make-or-buy decisions during ‘product design and engineering’: Three Indian case studies

Make-or-buy decisions taken during `product design and engineering´ often happen based on incomplete and inaccurate information but have tremendous effects on the manufacturing function; this is an under-researched topic. Based on three cases in India, the study examines the processes and decision-making for make-or-buy during new product development from three theoretical perspectives: Transaction Cost Economics, Resource-Based View and notion of core competencies (in chronological order of being established). Driven by both strategic intents and experiences with suppliers, these companies resorted to developing in-house capabilities rather than continuation of supply. That finding leads to reflection on the validity of current theoretical propositions and can be traced back to literature on outsourcing that dates back decades.