Economics of Outsourcing

Edited by Leslie P. Willcocks, Professor of Technology, Work and Globalisation, London School of Economics and Political Science, UK and Mary C. Lacity, David D. Glass Chair and Distinguished Professor of Information Systems, Sam M. Walton College of Business, University of Arkansas, US

‘. . .a weighty yet solid set of critical economic writings that narrow their topic to the major issues involved in outsourcing and offshoring work for countries and business establishments alike. A powerful blend of data and critical analysis that college-level readers will find important.’

• Contents:Dedication to Ronald CoaseAcknowledgementsIntroductionLeslie P. Willcocks and Mary C. LacityPART ITHE THEORETICAL FOUNDATION, CRITIQUES AND REVIEW OF TRANSACTION COST ECONOMICS 1. R.H. Coase (1937), ‘The Nature of the Firm’, Economica, 4, 386–4052. Oliver E. Williamson (1991), ‘Comparative Economic Organization: The Analysis of Discrete Structural Alternatives’, Administrative Science Quarterly, 36 (2), June, 269–963. Ian R. Macneil (1978), ‘Contracts: Adjustment of Long-term Economic Relations Under Classical, Neoclassical, and Relational Contract Law’, Northwestern University Law Review, 72 (6), 854–9054. R.H. Coase (1998), ‘The New Institutional Economics’, American Economic Review: Papers and Proceedings, 88 (2), May, 72–45. Sumantra Ghoshal and Peter Moran (1996), ‘Bad for Practice: A Critique of the Transaction Cost Theory’, Academy of Management Review, 21 (1), January, 13–476. Richard Carter and Geoffrey M. Hodgson (2006), ‘The Impact of Empirical Tests of Transaction Cost Economics on the Debate on the Nature of the Firm’, Strategic Management Journal, 27 (5), May, 461–767. Jeffrey T. Macher and Barak D. Richman (2008), ‘Transaction Cost Economics: An Assessment of Empirical Research in the Social Sciences’, Business and Politics, 10 (1), ii, 1–638. Mary C. Lacity, Leslie P. Willcocks and Shaji Khan (2011), ‘Beyond Transaction Cost Economics: Towards an Endogenous Theory of Information Technology Outsourcing’, Journal of Strategic Information Systems, 20 (2), June, 139–57PART IIVERTICAL INTEGRATION9. Kirk Monteverde and David J. Teece (1982), ‘Supplier Switching Costs and Vertical Integration in the Automobile Industry’, Bell Journal of Economics, 13 (1), Spring, 206–21310. David T. Levy (1985), ’The Transactions Cost Approach to Vertical Integration: An Empirical Examination’, Review of Economics and Statistics, 67 (3), August, 438–4511. Soon Ang and Detmar W. Straub (1998), ‘Production and Transaction Economies and IS Outsourcing: A Study of the U.S. Banking Industry’, MIS Quarterly, 22 (4), December, 535–52 12. Mark Wahrenburg, Andreas Hackethal, Lars Friedrich and Tom Gellrich (2006), ‘Strategic Decisions Regarding the Vertical Integration of Human Resource Organizations: Evidence for an Integrated HR Model for the Financial Services Industry in Germany, Austria and Switzerland’, International Journal of Human Resource Management, 17 (10), October, 1726–7113. Matthew Bidwell (2010), ‘Problems Deciding: How the Structure of Make-or-Buy Decisions Leads to Transaction Misalignment’, Organization Science, 21 (2), March–April, 362–7914. Nicholas S. Argyres and Todd R. Zenger (2012), ‘Capabilities, Transaction Costs, and Firm Boundaries’, Organization Science, 23 (6), November–December, 1643–57PART IIICONTRACTUAL RELATIONSHIPS 15. Laura Poppo and Todd Zenger (2002), ‘Do Formal Contracts and Relational Governance Function as Substitutes or Complements?’, Strategic Management Journal, 23 (8), August, 707–72516. Paul L. Joskow (1987), ‘Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets’, American Economic Review, 77 (1), March, 168–8517. Martin Brown, Armin Falk and Ernst Fehr (2004), ‘Relational Contracts and the Nature of Market Interactions’, Econometrica, 72 (3), May, 747–8018. Shaila M. Miranda and C. Bruce Kavan (2005), ‘Moments of Governance in IS Outsourcing: Conceptualizing Effects of Contracts on Value Capture and Creation’, Journal of Information Technology, 20 (3), September, 152–6919. Vivek Choudhury and Rajiv Sabherwal (2003), ‘Portfolios of Control in Outsourced Software Development Projects’, Information Systems Research, 14 (3), September, 291–31420. Kathleen M. Eisenhardt (1989), ‘Agency Theory: An Assessment and Review’, Academy of Management Review, 14 (1), January, 57–7421. Kyle J. Mayer and Robert M. Salomon (2006), ‘Capabilities, Contractual Hazards, and Governance: Integrating Resource-based and Transaction Cost Perspectives’, Academy of Management Journal, 49 (5), October, 942–59PART IVGLOBAL SOURCING DECISIONS22. Gene M. Grossman, Elhanan Helpman and Adam Szeidl (2005), ‘Complementarities between Outsourcing and Foreign Sourcing’, American Economic Review: Papers and Proceedings, 95 (2), May, 19–2423. Robert C. Feenstra and Gordon H. Hanson (2005), ‘Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm’, Quarterly Journal of Economics, 120 (2), May, 729–6124. Pol Antràs (2005), ‘Property Rights and the International Organization of Production’, American Economic Review: Papers and Proceedings, 95 (2), May, 25–3225. Janet Y. Murray, Masaaki Kotabe and Stanford A. Westjohn (2009), ‘Global Sourcing Strategy and Performance of Knowledge-Intensive Business Services: A Two-Stage Strategic Fit Model’, Journal of International Marketing, 17 (4), 90–10526. Matthias Holweg, Andreas Reichhart and Eui Hong (2011), ‘On Risk and Cost in Global Sourcing’, International Journal of Production Economics, 131 (1), May, 333–41PART VINNOVATION AND OUTSOURCING 27. Michael A. Stanko and Roger J. Calantone (2011), ‘Controversy in Innovation Outsourcing Research: Review, Synthesis and Future Directions’, R&D Management, 41 (1), January, 8–2028. Carmen Weigelt and M.B. Sarkar (2012), ‘Performance Implications of Outsourcing for Technological Innovations: Managing the Efficiency and Adaptability Trade-Off ‘, Strategic Management Journal, 33 (2), February, 189–21629. Jeremy Howells, Dimitri Gagliardi and Khaleel Malik (2008), ‘The Growth and Management of R&D Outsourcing: Evidence from UK Pharmaceuticals’, R&D Management, 38 (2), March, 205–219PART VIECONOMIC AND PERFORMANCE EFFECTS 30. Kholekile L. Gwebu, Jing Wang and Li Wang (2010), ‘Does IT Outsourcing Deliver Economic Value to Firms?’, Journal of Strategic Information Systems, 19 (2), June, 109–12331. Mary C. Lacity, Stan Solomon, Aihua Yan and Leslie P. Willcocks (2011), ‘Business Process Outsourcing Studies: A Critical Review and Research Directions’, Journal of Information Technology, 26 (4), December, 221–5832. Markus Reitzig and Stefan Wagner (2010), ‘The Hidden Costs of Outsourcing: Evidence from Patent Data’, Strategic Management Journal, 31 (11), November, 1183–20133. George N. Kenyon and Mary J. Meixell (2011), ‘Success Factors and Cost Management Strategies for Logistics Outsourcing’, Journal of Management and Marketing Research, 7, April, 1–1734. Ronald F. Premuroso, Terrance R. Skantz and Somnath Bhattacharya (2012), ‘Disclosure of Outsourcing in the Annual Report: Causes and Market Returns Effects’, International Journal of Accounting Information Systems, 13 (4), December, 382–40235. Joseph Chen, Harrison Hong, Wenxi Jiang and Jeffrey D. Kubik (2013), ‘Outsourcing Mutual Fund Management: Firm Boundaries, Incentives, and Performance’, Journal of Finance, LXVIII (2), April, 523–58Index