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How the Transaction Cost and Resource-based Theories of the Firm inform Outsourcing Evaluation

McIvor, R (2009) How the Transaction Cost and Resource-based Theories of the Firm inform Outsourcing Evaluation. Journal of Operations Management, 27 (1). pp. 45-63. [Journal article]

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DOI: 10.1016/j.jom.2008.03.004


Transaction cost economics (TCE) and the resource-based view (RBV) of the firm have been extremely influential in the study of outsourcing both in theory and practice. This paper argues that neither transaction cost economics nor the resource-based view alone can fully explain the complexities of outsourcing. A review and critique of these theories as a means of understanding the complexities of outsourcing is presented. A prescriptive framework for outsourcing evaluation is presented, which was developed from integrating TCE and the RBV, and carrying out in-depth case study research in a number of organizations. The research findings emphasize the utility of integrating TCE and the RBV, and highlight the importance of operations management concepts such as performance management, operations strategy, business improvement, and process re-design to the study of outsourcing. However, the findings have shown that these theories should be applied with caution due to contradictory prescriptions in some instances.

Item Type:Journal article
Keywords:outsourcing, operations strategy, transaction cost economics, resource-based view, and inter-organizational collaboration
Faculties and Schools:Ulster Business School
Ulster Business School > Department of International Business
Research Institutes and Groups:Business and Management Research Institute
ID Code:9103
Deposited By: Professor Ronan McIvor
Deposited On:22 Jan 2010 09:40
Last Modified:07 Mar 2013 10:51

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