IDEAS home Printed from https://ideas.repec.org/p/ebg/heccah/0776.html
   My bibliography  Save this paper

A comparative Test of the Efficiency, focus and Learning Perspectives of Outsourcing

Author

Listed:
  • Frédéric, DALSACE
  • Nicola C., DRAGONETTI

    (INSEAD)

  • Karel, COOL

    (INSEAD)

Abstract

Despite the fact that vertical integration has been a key question of management studies for more than fifty years, we still do not have a unified, coherent view of outsourcing. In particular, multiple theoretical perspectives such as transaction cost economics, industrial organization, and strategy, could explain the outsourcing decision, but the implications of these different streams have neither been theoretically integrated, nor tested simultaneously. In an attempt to disentangle the various causes of outsourcing, we suggest three different rationales for outsourcing: cost reduction, focusing on core capabilities and importing knowledge into the firm. We develop several hypotheses, which we then test on secondary data on French small- and medium-sized enterprises. Results indicate that the learning rationale appears to be the strongest factor influencing the outsourcing decision. Some performance implications of this rationale are also suggested and tested.

Suggested Citation

  • Frédéric, DALSACE & Nicola C., DRAGONETTI & Karel, COOL, 2003. "A comparative Test of the Efficiency, focus and Learning Perspectives of Outsourcing," HEC Research Papers Series 776, HEC Paris.
  • Handle: RePEc:ebg:heccah:0776
    as

    Download full text from publisher

    File URL: http://www.hec.fr/var/fre/storage/original/application/780dedb3a411076524c50d3974b998d9.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Goldberger, Arthur S., 1981. "Linear regression after selection," Journal of Econometrics, Elsevier, vol. 15(3), pages 357-366, April.
    2. Srinivasan Balakrishnan & Birger Wernerfelt, 1986. "Technical change, competition and vertical integration," Strategic Management Journal, Wiley Blackwell, vol. 7(4), pages 347-359, July.
    3. Krogh, Georg Von & Roos, Johan, 1994. "Corporate divestiture and the phantom limb effect," European Management Journal, Elsevier, vol. 12(2), pages 171-178, June.
    4. Constantinos C. Markides, 1995. "Diversification, restructuring and economic performance," Strategic Management Journal, Wiley Blackwell, vol. 16(2), pages 101-118.
    5. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    6. repec:bla:kyklos:v:52:y:1999:i:2:p:201-18 is not listed on IDEAS
    7. Jeffrey H. Dyer, 1997. "Effective interim collaboration: how firms minimize transaction costs and maximise transaction value," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 535-556, August.
    8. Chung, Ching-Fan & Goldberger, Arthur S, 1984. "Proportional Projections in Limited Dependent Variable Models," Econometrica, Econometric Society, vol. 52(2), pages 531-534, March.
    9. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    10. Kenneth J. Arrow, 1975. "Vertical Integration and Communication," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 173-183, Spring.
    11. Richard N. Langlois & Nicolai J. Foss, 1999. "Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization," Kyklos, Wiley Blackwell, vol. 52(2), pages 201-218, May.
    12. Gianni Lorenzoni & Andrea Lipparini, 1999. "The leveraging of interfirm relationships as a distinctive organizational capability: a longitudinal study," Strategic Management Journal, Wiley Blackwell, vol. 20(4), pages 317-338, April.
    13. Levy, David, 1984. "Testing Stigler's Interpretation of "The Division of Labor Is Limited by the Extent of the Market."," Journal of Industrial Economics, Wiley Blackwell, vol. 32(3), pages 377-389, March.
    14. Ranjay Gulati, 1999. "Network location and learning: the influence of network resources and firm capabilities on alliance formation," Strategic Management Journal, Wiley Blackwell, vol. 20(5), pages 397-420, May.
    15. Perry, Martin K., 1989. "Vertical integration: Determinants and effects," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 4, pages 183-255, Elsevier.
    16. James Richardson, 1996. "Vertical Integration and Rapid Response in Fashion Apparel," Organization Science, INFORMS, vol. 7(4), pages 400-412, August.
    17. Ulset, Svein, 1996. "R&D outsourcing and contractual governance: An empirical study of commercial R&D projects," Journal of Economic Behavior & Organization, Elsevier, vol. 30(1), pages 63-82, July.
    18. Nicolai Foss, 1999. "Research in the Strategic Theory of the Firm: ‘Isolationism’ and ‘Integrationism’," Journal of Management Studies, Wiley Blackwell, vol. 36(6), pages 725-755, November.
    19. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    20. Desirée Blankenburg Holm & Kent Eriksson & Jan Johanson, 1999. "Creating value through mutual commitment to business network relationships," Strategic Management Journal, Wiley Blackwell, vol. 20(5), pages 467-486, May.
    21. Gary Hamel, 1991. "Competition for competence and interpartner learning within international strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 83-103, June.
    22. Greene, William H, 1981. "On the Asymptotic Bias of the Ordinary Least Squares Estimator of the Tobit Model," Econometrica, Econometric Society, vol. 49(2), pages 505-513, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Frédéric, DALSACE & Erin, ANDERSON & William T., ROSS, Jr., 2003. "Path Dependence in Personal Selling : A Meso-Analysis of Vertical Integration," HEC Research Papers Series 787, HEC Paris.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gianni Lorenzoni, 2010. "Genesis of a research field: district, network, strategic network," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 14(3), pages 221-239, August.
    2. Basu, Sandip & Phelps, Corey & Kotha, Suresh, 2011. "Towards understanding who makes corporate venture capital investments and why," Journal of Business Venturing, Elsevier, vol. 26(2), pages 153-171, March.
    3. Lee, Po-Yen & Lin, Hui-Tzu & Chen, Hung-Hsin & Shyr, Yi-Hwan, 2011. "Dynamic capabilities exploitation of market and hierarchy governance structures: An empirical comparison of Taiwan and South Korea," Journal of World Business, Elsevier, vol. 46(3), pages 359-370, July.
    4. Koen H. Heimeriks & Geert Duysters, 2007. "Alliance Capability as a Mediator Between Experience and Alliance Performance: An Empirical Investigation into the Alliance Capability Development Process," Journal of Management Studies, Wiley Blackwell, vol. 44(1), pages 25-49, January.
    5. Heimeriks, K. & Duysters, G.M., 2004. "A study into the alliance capability development process," Working Papers 04.21, Eindhoven Center for Innovation Studies.
    6. Stephan Duschek, 2004. "Inter-Firm Resources and Sustained Competitive Advantage," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 15(1), pages 53-73.
    7. Chen, Hung-hsin & Lee, Po-yen & Lay, Tzyy-jane, 2009. "Drivers of dynamic learning and dynamic competitive capabilities in international strategic alliances," Journal of Business Research, Elsevier, vol. 62(12), pages 1289-1295, December.
    8. Isobe, Takehiko & Makino, Shige & Montgomery, David B., 2002. "Performance Impact of Technological Assets and Reconfiguration Capabilities: The Case of Small Manufacturing Firms in Japan," Research Papers 1768, Stanford University, Graduate School of Business.
    9. Takehiko Isobe & Shige Makino & David Montgomery, 2008. "Technological capabilities and firm performance: The case of small manufacturing firms in Japan," Asia Pacific Journal of Management, Springer, vol. 25(3), pages 413-428, September.
    10. Joerg Freiling, 2004. "A Competence-based Theory of the Firm," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 15(1), pages 27-52.
    11. Ana Redondo-Cano & M. Canet-Giner, 2010. "Outsourcing agrochemical services: economic or strategic logic?," Service Business, Springer;Pan-Pacific Business Association, vol. 4(3), pages 237-252, December.
    12. Duysters, G.M. & Heimeriks, K.H., 2002. "The influence of alliance capabilities on alliance performance: an empirical investigation," Working Papers 02.08, Eindhoven Center for Innovation Studies.
    13. Eungdo Kim & InGyu Lee & Hongbum Kim & Kwangsoo Shin, 2021. "Factors Affecting Outbound Open Innovation Performance in Bio-Pharmaceutical Industry-Focus on Out-Licensing Deals," Sustainability, MDPI, vol. 13(8), pages 1-17, April.
    14. Kazadi, Kande & Lievens, Annouk & Mahr, Dominik, 2016. "Stakeholder co-creation during the innovation process: Identifying capabilities for knowledge creation among multiple stakeholders," Journal of Business Research, Elsevier, vol. 69(2), pages 525-540.
    15. Ana Villar & César Camisón & Montserrat Boronat, 2007. "Technical Strategic Alliances And Performance: The Mediating Effect Of Knowledge ¿Based Competencies," Working Papers. Serie EC 2007-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    16. Heimeriks, K. & Duysters, G.M. & Vanhaverbeke, W.P.M., 2004. "The evolution of alliance capabilities," Working Papers 04.20, Eindhoven Center for Innovation Studies.
    17. Filipe M. Santos & Kathleen M. Eisenhardt, 2005. "Organizational Boundaries and Theories of Organization," Organization Science, INFORMS, vol. 16(5), pages 491-508, October.
    18. Ulrich Lichtenthaler & Eckhard Lichtenthaler, 2009. "A Capability‐Based Framework for Open Innovation: Complementing Absorptive Capacity," Journal of Management Studies, Wiley Blackwell, vol. 46(8), pages 1315-1338, December.
    19. Filipe J. Sousa & Luis M. de Castro, 2004. "The strategic relevance of business relationships: a preliminary assessment," FEP Working Papers 163, Universidade do Porto, Faculdade de Economia do Porto.
    20. Butler, Bella & Soontiens, Werner, 2015. "Offshoring of higher education services in strategic nets: A dynamic capabilities perspective," Journal of World Business, Elsevier, vol. 50(3), pages 477-490.

    More about this item

    Keywords

    outsourcing; transaction cost economics; resource-based view; knowledge-based view;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebg:heccah:0776. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Antoine Haldemann (email available below). General contact details of provider: https://edirc.repec.org/data/hecpafr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.