Prioritizing Offshore Vendor Selection Criteria for the North American Geospatial Industry

219 Pages·2017·3.49 MB·English

Walden University
ScholarWorks
Walden Dissertations and Doctoral Studies
Walden Dissertations and Doctoral Studies
Collection
2014
Prioritizing Offshore Vendor Selection Criteria for
the North American Geospatial Industry
Simon Wolfgang Musaeus
Walden University
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Walden University

College of Management and Technology

This is to certify that the doctoral study by

Simon Musaeus

has been found to be complete and satisfactory in all respects,
and that any and all revisions required by
the review committee have been made.

Review Committee
Dr. Christos Makrigeorgis, Committee Chairperson, Doctor of Business Administration
Faculty

Dr. Alexandre Lazo, Committee Member, Doctor of Business Administration Faculty

Dr. Lionel de Souza, University Reviewer, Doctor of Business Administration Faculty

Chief Academic Officer
Eric Riedel, Ph.D.

Walden University
2014
Abstract

Prioritizing Offshore Vendor Selection Criteria
for the North American Geospatial Industry
by
Simon Musaeus

Dipl.-Ingenieur Vermessungswesen (univ.), 1993
University of the Federal Armed Forces Munich, Germany

Doctoral Study Submitted in Partial Fulfillment
of the Requirements for the Degree of
Doctor of Business Administration

Walden University
December 2014
Abstract
The U.S. market for geospatial services totaled US $2.2 billion in 2010, representing 50%
of the global market. Data-processing firms subcontract labor-intensive portions of data
services to offshore providers in South and East Asia and Eastern Europe. In general,
half of all offshore contracts fail within the first 5 years because one or more parties
consider the relationship unsuccessful. Despite the high failure rates, no study has
examined the offshore vendor selection process in the geospatial industry. The purpose
of this study was to determine the list of key offshore vendor selection criteria and the
efficacy of the analytic hierarchy process (AHP) for ranking the criteria that North
American geospatial companies consider in the offshore vendor selection process. After
the selection of the initial list of factors from the literature and their validation in a pilot
study, a final survey instrument was developed and administered to 15 subject matter
experts (SMEs) in North America. The SMEs expressed their preferences for one
criterion over another by pairwise comparisons, which served as input to the AHP
procedure. The results showed that the quality of deliverables was the top ranked (out of
26) factors, instead of the price, which ranked third. Similarly, SMEs considered social
and environmental consciousness on the vendor side as irrelevant. More importantly, the
findings indicated that the structured AHP process provides a useful and effective
methodology whose application may considerably improve the quality of the overall
vendor selection process. Last, improved and stabilized business relationships leading to
predictable budgets might catalyze social change, supporting stable employment.
Consumers could benefit from derivative improvements in product quality and pricing.
Prioritizing Offshore Vendor Selection Criteria
for the North American Geospatial Industry
by
Simon Musaeus

Dipl.-Ingenieur Vermessungswesen (univ.), 1993
University of the Federal Armed Forces Munich, Germany

Doctoral Study Submitted in Partial Fulfillment
of the Requirements for the Degree of
Doctor of Business Administration

Walden University
December 2014
Dedication
I dedicate this study to the people who made it possible that I could start this so
important phase of my life. To my beloved partner, Mayra, who pushed me to start this
program and was an eternally patient motivator, companion, editor, and sparring partner.
To my late father, Wolfgang Musäus, who planted in me the seed of lifelong learning and
of never giving up when facing a challenge. To my late mother Beate Musäus, who
fostered the value of creative thinking in me, and to my two children Jasmina and
Manuel, in the hope that it may be a motivation to them to pursue the degree themselves.
To my friends Andreas Dunker and Udo Becker, who have supported me during these
years and accepted the reduced time I could dedicate to them.
Acknowledgments
My gratitude goes to Dr. Christos Makrigeorgis (“Dr. M”) for his candor and
guidance throughout the study. Though not always patient, you always helped me to
understand concepts and requirements in the most efficient way. Thanks to Dr.’s
Alexandre Lazo and Lionel de Souza for your continuing support. An acknowledgement
I would like to give Dr. Freda Turner; your advice helped me to find a quantitative study
topic under the guidance of Dr. M. Some instructors of Walden University during my
career, who helped me to develop not only taste but passion for scientific work on
business, are Dr. Diane Dusick for her outstanding introduction to quantitative methods,
Dr. Gene Haugen for his “crash-course” in business strategy, and Dr. Carolyn Salerno for
her dedication in helping me on my first prospectus. You have a considerable part into
my success in business and this significant personal achievement. Finally, I want to
express my gratitude to all business partners and specialists who have contributed
valuable information about their practices and evaluations during personal
communications and through completion of two different surveys.
Table of Contents
List of Tables ........................................................................................................................... v
List of Figures ........................................................................................................................ vii
Section 1: Foundation of the Study .......................................................................................... 1
Background of the Problem ............................................................................................... 3
Problem Statement ............................................................................................................. 6
Purpose Statement .............................................................................................................. 6
Nature of the Study ............................................................................................................ 7
Research Question ............................................................................................................. 9
Hypotheses ....................................................................................................................... 10
Survey Questions ....................................................................................................... 12
Theoretical Framework .................................................................................................... 15
Definition of Terms .......................................................................................................... 17
Assumptions, Limitations, and Delimitations .................................................................. 20
Assumptions ............................................................................................................... 20
Limitations ................................................................................................................. 21
Delimitations .............................................................................................................. 22
Significance of the Study ................................................................................................. 23
Contribution to Business Practice .............................................................................. 23
Implications for Social Change .................................................................................. 24
A Review of the Professional and Academic Literature .................................................. 26
i
Strategy for Searching the Literature ......................................................................... 27
The Geospatial Industry ............................................................................................. 28
The Buyer-Vendor Relationship in the Geospatial Industry ...................................... 30
Outsourcing ................................................................................................................ 32
The Vendor Selection Problem .................................................................................. 35
Multicriteria Decision Making (MCDM) .................................................................. 40
Summary and Transition ................................................................................................. 50
Section 2: The Project ............................................................................................................ 51
Purpose Statement ............................................................................................................ 52
Role of the Researcher ..................................................................................................... 52
Participants ....................................................................................................................... 53
Research Method and Design .......................................................................................... 54
Method ....................................................................................................................... 55
Research Design ......................................................................................................... 57
Population and Sampling ................................................................................................. 58
Ethical Research ............................................................................................................... 60
Data Collection ................................................................................................................ 60
Instruments ................................................................................................................. 60
Data Collection Technique......................................................................................... 69
Data Organization Techniques ................................................................................... 73
Data Analysis Technique ................................................................................................. 74
ii
Reliability and Validity .................................................................................................... 87
Reliability ................................................................................................................... 87
Validity ...................................................................................................................... 88
Summary and Transition ................................................................................................. 91
Section 3: Application to Professional Practice and Implications for Change ...................... 92
Overview of Study ........................................................................................................... 92
Presentation of the Findings ............................................................................................. 95
The Pilot Study .......................................................................................................... 95
The Follow-up Survey ............................................................................................... 98
Data Analysis ............................................................................................................. 99
Discussion of the Results ......................................................................................... 115
Conclusion ............................................................................................................... 120
Applications to Professional Practice ............................................................................ 121
Implications for Social Change ...................................................................................... 122
Recommendations for Action ........................................................................................ 123
Recommendations for Further Study ............................................................................. 124
Reflections ..................................................................................................................... 125
Summary and Study Conclusions .................................................................................. 126
References ............................................................................................................................ 128
Appendix A: Factors for Vendor Selection from the Literature .......................................... 152
Appendix B: Initial AHP-Tree from Literature Review ...................................................... 154
iii