Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- Notes on contributors
- Preface: the reconfiguration of the world economy
- Part I Conceptual frameworks and theories
- 1 Global outsourcing and offshoring
- 2 Globalization of R&D
- 3 A theory of the outsourcing firm
- Part II The offshoring and outsourcing of R&D and innovative activities
- Part III Management issues in offshoring and virtual teamwork
- Part IV Empirical analyses and case studies of outsourcing and offshoring
- Index
- References
3 - A theory of the outsourcing firm
Published online by Cambridge University Press: 10 January 2011
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- Notes on contributors
- Preface: the reconfiguration of the world economy
- Part I Conceptual frameworks and theories
- 1 Global outsourcing and offshoring
- 2 Globalization of R&D
- 3 A theory of the outsourcing firm
- Part II The offshoring and outsourcing of R&D and innovative activities
- Part III Management issues in offshoring and virtual teamwork
- Part IV Empirical analyses and case studies of outsourcing and offshoring
- Index
- References
Summary
Introduction
Outsourcing has evolved into a significant organizational practice over the last decade (Hoecht and Trott, 2006). However, as firms expand the practice by outsourcing increasingly key and core functions, new management challenges can be anticipated. The organizational changes that accompany these challenges are likely to be sweeping, suggesting that it is now appropriate to consider the need for a comprehensive behavioral theory of the outsourcing firm.
Both transaction cost economics (TCE) and the resource-based view of the firm (RBV) have been useful perspectives to investigate the determinants and conditions under which firms can best leverage outsourcing (Holcomb and Hitt, 2007; McIvor, 2009). Transaction cost economics provides clear direction as to economic trade-offs and contracting styles that a firm can use to evaluate the consequences of a potential outsourcing decision (Williamson, 2008). Similarly, the resource-based view highlights how unique capabilities of the firm can offer advantage when appropriately matched to environmental conditions (Peteraf, 1993); this has made it an effective measure to determine the extent to which a firm's competencies can and should be outsourced (Jennings, 2002; McIvor, 2003).
While TCE and RBV offer helpful vehicles for measuring the efficiencies gained through outsourcing, they offer a less helpful look into the organizational changes that occur within the firm as it outsources an increasingly larger percentage of its functionality to external contract providers.
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- Global Outsourcing and OffshoringAn Integrated Approach to Theory and Corporate Strategy, pp. 73 - 104Publisher: Cambridge University PressPrint publication year: 2010