STRATEGIC AND OPERATIONAL CHOICES FOR SMALL SUBCONTRACTING FIRMS - EMPIRICAL RESULTS AND AN INTERPRETATIVE MODEL

Based on empirical research, presents an interpretative model of the d ynamics occurring in the subcontracting relationships between large pu rchasers and small subcontractors. Shows that the small units often su pply a product that is not sufficiently differentiated and technologic ally advanced; are for the most part dependent on a few large purchase rs; find it increasingly difficult to follow the contractor's quality and reliability requirements; have an adequate amount of machinery but neglect other forms of investment (i.e. in data processing equipment, education and training); and have problems with the introduction of i nnovations especially due to the lack of a skilled workforce. Illustra tes the subcontracting behaviour of small businesses by means of a mod el which considers two aspects: the ''strategic positioning'', evaluat ed in terms of kind and object of subcontracting; and the ''operationa l positioning'', regarding the introduction of innovations into the op erations. The different areas of strategic and operational positioning are discussed in terms of competitive and earning success. Indicates a possible strategic-operational development pathway leading towards m ore qualified subcontractors/large purchaser relationships.