DEALING WITH CRISIS: USING SUBCONTRACTING FOR THE DEVELOPMENT OF THE CROATIAN LEATHER MANUFACTURING AND PROCESSING INDUSTRY

As literature suggests, subcontracting presents an important source of support of various kinds to small and medium-sized companies from large ones as well as an important source of efficiency and competitiveness. It is considered as an instrument of industrial and economic development and employment creation in developed and developing countries, and particularly in labour intensive industries. A reduction of demand, a change in consumption patterns, a global shift from production and economic crisis have increased the interest of many researchers analyzing subcontracting relationships mostly in textile and clothing industry. This paper is investigating the role of subcontracting in the case of the Croatian leather manufacturing and processing industry with an aim of getting better insight into its contribution to the development of this sector. Therefore, for the purpose of this paper, a two-phase research study, including a qualitative approach, was used: 1) the first phase on the sample of companies operating in the Croatian leather manufacturing and processing industry which intended to find out overall perception of benefits and limitations of subcontracting for the Croatian footwear and leather manufacturing companies; 2) the second phase on the group of the Croatian footwear and leather manufacturing companies, focusing on the success of subcontracting in dealing with global crisis. The findings of the study confirm that positive relationships between subcontracting and business performance was found as well as some areas for improvement.