Firm capabilities as moderators of transaction cost factors and subsidiary domestic outsourcing

Tseng, Cher‐Hung; Chen, Liang‐Tu

doi:10.1108/00251741311291283

Cited by 9 publications

(7 citation statements)

References 65 publications

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“…Determinants of TCA and RBV can be integrated in a prescriptive model (Gereffi et al, 2005;McIvor, 2009) or studied in their interaction (Madhok, 2002;Jacobides and Winter, 2005;Gulbrandsen et al, 2009;Tseng and Chen, 2013). However, TCA and RBV also show a persistent contradictory nature (McIvor, 2009), with relevant implications from a supply chain perspective.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Impacts of non-GMO standards on poultry supply chain governance: transaction cost approach vs resource-based view

Ghozzi

Soregaroli

Boccaletti

et al. 2016

SCM

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Purpose Following a negative attitude of consumers toward genetically modified organisms (GMOs) and the spaces left by the labeling legislation on GMOs of different countries, some retailers and processors introduced their own non-GMO standards, with the intention of avoiding the presence of GMOs in their products. This paper aims to understand how the implementation of these new retailer-driven standards affects governance structures along the supply chain and the determinants of such change focusing on transaction cost approach (TCA) vs resource-based view (RBV). Design/methodology/approach The non-GMO introduction is investigated as a case study in the poultry industry of France and Italy. The case relies on data primarily collected from interviews with the main actors at five stages of the supply chain from the retailer up to animal feed and crop production. Findings Findings indicate that the introduction of non-GMO products had different impacts on the transactions along the supply chain, generally leading to more integrated relationships. Theoretical relevance depends on the observed transaction and the type of governance structure considered. Interestingly, only RBV explains the shift toward hierarchical governance when this is observed. Originality/value This paper contributes to the empirical literature highlighting the upstream effects caused by the adoption of new standards. On the theoretical side, building on Conner and Prahalad’s (1996) seminal work and leveraging on the concepts of opportunism, “potential” superior knowledge and strategic importance of an activity, this research suggests a comparative framework for identifying governance structures and their determinants under TCA and RBV.

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Section: Theoretical Frameworkmentioning

confidence: 99%

Impacts of non-GMO standards on poultry supply chain governance: transaction cost approach vs resource-based view

Ghozzi

Soregaroli

Boccaletti

et al. 2016

SCM

View full text Add to dashboard Cite

show abstract

“…Transaction costs and uncertainty act as moderators of prospective value and competitive advantage (Conner and Prahalad, 1996; Madhok, 1997; Foss and Foss, 2005; Pitelis and Teece, 2009; Meyer et al , 2009). On the other hand, capabilities moderate the influence of transaction costs on the choice of governance, such as governance capabilities allowing to abandon the internalization and choose external contracting (Mayer and Salomon, 2006; Tseng and Chen, 2013; Ray et al , 2013; Steensma and Corley, 2001; Kumar, 2010; Verwaal et al , 2010). TCT’s alignment hypothesis enables the choice between the hierarchy and hybrid expansion.…”

Section: Assessing Compatibility Of the Rbv And Tct Toward Company Expansion And Integrating Themmentioning

confidence: 99%

“…Mutinelli and Piscitello (1998) find the impact of governance on knowledge acquisition and capability development as moderated by transaction costs of acquiring information and potential opportunism of contractors. Strong capabilities lower transaction costs and enable to choose market or outsourcing instead of internalization (Mayer and Salomon, 2006; Tseng and Chen, 2013). Lower transaction costs, in turn, allow for productive capabilities to act as a determinant of governance; higher transaction costs will limit the influence of productive capabilities on governance (Jacobides and Hitt, 2005; Fabrizio, 2012).…”

Section: Assessing Compatibility Of the Rbv And Tct Toward Company Expansion And Integrating Themmentioning

confidence: 99%

The integrated resource-based and transaction cost approach to the growth process of firms

Gancarczyk

2016

JOCM

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Purpose The purpose of this paper is to discuss the process of entrepreneurial growth from the perspective of the resource-based view (RBV) of the firm and transaction cost theory (TCT) and to formulate propositions regarding the entrepreneurs’ decisional rules and structural elements in this process. Design/methodology/approach The argumentation draws upon three fields of academic research, namely, entrepreneurship studies on firm growth as well as strategic management and organization science studies on company scope and size (boundary). A systematic review of the literature was performed that combines the RBV and TCT to explain a firm’s boundary. Findings Three levels of entrepreneurial decisional rules in the process of growth were identified. The first level includes main decisional criteria. The second level approaches the structural elements of growth process, namely, its motives, rationale, mechanism and modes. The third level assumes evolutionary approach to decision making, namely, feedback relationships among transaction costs, governance and capabilities to create value from growth. Originality/value The paper broadens the early stream of research in the process of entrepreneurial growth. It contributes to explaining the way growth is realized, instead of identifying its predictors, which has dominated in to-date studies. The entrepreneurs’ decisional rules and choices in the process of expansion were suggested. Moreover, the integrated RBV-TCT approach was proposed as a theoretical background for studying this phenomenon.

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“…A greater scope of services with an outsourcing provider increases costs related to negotiating and enforcing different contracts and administering and monitoring the relationship (Tseng and Chen, 2013). We propose that this added complexity of hiring more services from a BPO provider brings about increased risks and costs that can be successfully undertaken only by those firms that are already efficient.…”

Section: Hypothesesmentioning

confidence: 99%

Efficiency and the scope of outsourced services: a client firm’s absorptive capacity perspective of knowledge-intensive services

Ellimäki

Aragón‐Correa

Hurtado‐Torres

2021

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PurposeStrategic literature has focused on how economies of scale in a firm offering outsourcing may generate incentives for clients to increase the outsourced services, but there has been limited research on how the clients’ features may influence the scope of services that they hire with an outsourcing provider. This study analyzes whether a client’s efficiency motivates it to increase ties with a specific provider of knowledge-intensive services in the context of business process outsourcing (BPO). We further explore whether industry conditions moderate the relationship.Design/methodology/approachA research framework is developed consisting of three main hypotheses. We combine industry data and proprietary and financial data from a longitudinal sample of 107 client firms of a multinational outsourcing service provider to test our hypotheses.FindingsWe find that more efficient firms hire more services from an outsourcing provider and that the munificence of the client firm’s industry positively moderates this relationship. Our results suggest that efficient clients can better keep transaction costs under control when accessing, assimilating, and exploiting the knowledge embedded in an expanded set of services provided by an outsourcing supplier.Originality/valueThis study extends the absorptive capacity perspective by showing that a client’s efficiency reinforces its opportunities to absorb knowledge-intensive services from a supplier when expanding the range of operations in the context of BPO.

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Firm capabilities as moderators of transaction cost factors and subsidiary domestic outsourcing

Cited by 9 publications

References 65 publications

Impacts of non-GMO standards on poultry supply chain governance: transaction cost approach vs resource-based view

Impacts of non-GMO standards on poultry supply chain governance: transaction cost approach vs resource-based view

The integrated resource-based and transaction cost approach to the growth process of firms

Efficiency and the scope of outsourced services: a client firm’s absorptive capacity perspective of knowledge-intensive services

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