Location Flexibility in Global Sourcing: Modalities and Tradeoffs in an Era of Increased Volatility

Increased volatility is the new normal for globalized and interconnected supply chains. Complementing studies on governance and supplier flexibility this conceptual paper aims to fill an extant research gap in relation to firms’ location flexibility in global sourcing. In an increasingly dynamic and globally integrated economic environment, firms develop the capacity to swiftly relocate tasks and resources to reduce the impact of location-specific risks, but also to benefit from arising location opportunities. In this perspective, the paper outlines modalities, individually and in combination, in developing location flexibility and discusses fundamental managerial tradeoffs between cost efficiency and imitability associated with these modalities. The study has important implications for ongoing debates on global sourcing and organizational flexibility.