Domestic sourcing, EU sourcing and transcontinental sourcing : the effect of social capital on different methods of sourcing

In the last decades, global sourcing has been one of the significant sourcing methods to gain a competitive advantage. Although global sourcing is a well-researched topic, there is still a lack of research when comparing it with domestic sourcing and EU sourcing. All of these three different sourcing methods pose their challenges. Therefore, examining the effect of social capital on these sourcing methods is the purpose of this study. A qualitative analysis was performed in the form of 22 semi-structured expert interview. Purchasing experts put highest emphasis on the difference in culture and language. With increasing distance, it also gets more challenging to build a strong relationship between buyer and supplier. The most crucial result of this study is that the effects of social capital on sourcing can be divided into two steps. First, the significant difference between domestic sourcing and EU sourcing is the increasing importance of cultural and linguistic barriers, the further the supplier is located away from the buyer. The second step is the occurrence of even larger distances, which results in difficulties of meeting frequently and building any trust or commitment. The results of this research cannot be generalised due to the limited sample size. Nevertheless, they can be used as indications and insights into which social capital dimension affects sourcing the most. Moreover, they show which sourcing method is affected by social capital the most.