| Peer-Reviewed

Research of Integrating RBV and TCE to Explore Outsourcing Decision of TMT

Received: 24 December 2016     Published: 4 January 2017
Views:       Downloads:
Abstract

Efficiency firms have increasingly turned to outsourcing in an effort to capture cost savings. A critique of these theories as a means of understanding the complexities of R&D outsourcing is presented. The paper has used the Resource-Based View (RBV) and Transaction Cost Economics (TCE) to examine the role of specialized capabilities as a potential source of value creation in firms. Such a study would further contribute to an understanding of the outsourcing phenomenon within firms. A research model is developed that proposes different hypotheses to test from the TCE and RBV of the firm. The main contribution of this study is the offer of a mechanism to combine both theories for the outsourcing decision. This research anticipative finding the TMT positively moderates between TCE and RBV attributes to present competence on integration is support, also indicating the decisions on outsourcing can be inherent advantages in firms.

Published in International Journal of Economics, Finance and Management Sciences (Volume 4, Issue 6)
DOI 10.11648/j.ijefm.20160406.20
Page(s) 378-383
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Outsourcing, Transaction Cost Economics, Resource-Based View, Top Management Team

References
[1] Antras. “Incomplete contracts and the product cycle.” American Economic Review, 95 (2005): 1054-1073.
[2] Barney. “Firm resource and sustained competitive advantage.” Journal of Management, 17 (1991): 49-61.
[3] Barney and Clark. Resource-Based Theory: Creating and Sustaining Competitive Advantage. Oxford University Press, 2007.
[4] Bartell. “Information systems outsourcing: a literature review and agenda for future research.” International Journal of Organizational Theory and Behavior, l (1998): 17‐44.
[5] Belderbos, R., M. Carree and B. Lokshinb. “Cooperative R&D and firm performance.” Research Policy, 33 (2004): 1477-1492.
[6] Bolat & Yilmaz. “The relationship between outsourcing and organizational performance: Is it myth or reality for the hotel sector.” International Journal of Contemporary Hospitality Management, 21 (2009): 7-23.
[7] Castanias and Helfat. “Managerial resources and rents.” Journal of Management, 17 (1991): 155-171.
[8] Cesaroni. “Technological outsourcing and product diversification: Do markets for technology affect firm’s strategies?” Research Policy, 33(2004): 1547-1564.
[9] Coase. “The nature of the firm.” Economica, 4 (1937): 386-405.
[10] Crane. Renewed focus on financial performance. www.Outsourcing-Journal.com/issues/jan, 1999.
[11] Creswell. Qualitative inquiry and research design: choosing among five approaches. London: Sage Publications, 2007.
[12] Cristina, Q, G., Carlos, B. V., and Vanesa, G. P. Technological Assets and Top Management Teams: Their Impact on the Capital Raised by Research-Intensive Firms Going Public. Innovation, Strategy, and Structure-Organizations, Institutions, Systems and Regions, 2011.
[13] Espino-Rodríguez, T. F., P. C. Lai and T. Baum. “Asset specificity in make or buy decisions for service operations: An empirical application in the Scottish hotel sector.” International Journal Service Industry Manage, 19 (2008): 111-133.
[14] Everaert, P., G. Sarens and J. Rommel. (2010). “Using transaction cost economics to explain outsourcing of accounting.” Small Bus Econ., 35 (2010): 93-112.
[15] Global Views. www.markit.com/Commentary/Get/04092014PMI-data-show-US-and-UK, 2013.
[16] Granstrand, O., Patel, P., Pavitt, K. “Multi-technology corporations: why they have Distributed rather than Distinctive Core competencies.” California Management Review, 39 (1997): 8-25.
[17] Grant. Contemporary Strategy Analysis. Oxford: Blackwell Publishing, 2005.
[18] Haleblian and Finkelstein. “Top management team size, CEO dominance, and firm performance: the moderating roles of environmental turbulence and discretion.” Academy of Management Journal, 36 (1993): 844-863.
[19] Hambrick and Cho. “The influence of top management team heterogeneity on firms’ competitive moves.” Administrative Science Quarterly, 41 (1996): 659-685.
[20] Hambrick and Mason. “Upper echelons: the organization as a reflection of its top managers.” Academy of Management Review, 9 (1984): 193-206.
[21] Jahns, C., Hartmann E., Bals L. “Offshoring: dimensions and diffusion of a new business concept.” Journal of Purchasing and Supply Management, 3 (2006): 218-231.
[22] Jin and Zedtwitz. “Technological capability development in China’s mobile phone industry.” Technovation, 28 (2008): 327-334.
[23] Lamminmaki “Outsourcing in Australian hotels: a transaction cost economics perspective.” Journal of Hospitality and Tourism Research, 31 (2007): 73-110.
[24] Langer. “Outsourcing Trends in Biopharmaceutical Manufacturing.” Pharmaceutical Technology, 1 (2014).
[25] Leiblein and Miller. “An empirical examination of transaction and firm level influences on the vertical boundaries of the firm.” Strategic Management Journal, 24 (2003): 830-859.
[26] Levitas, E., McFadyen, M. A. “Managing liquidity in research-intensive firms: signaling and cash flow effects of patents and Alliance activities.” Strategic Management Journal, 30 (2009): 659-678.
[27] Liza and Maria. Drivers of the Offshore Outsourcing of R&D: Empirical Evidence from French Manufacturers. University of Nottingham, GEP, 2009.
[28] Mayer and Salomon. “Capabilities, contractual hazards, and governance: integrating resource-based and transaction cost perspectives.” Academy of Management Journal, 49 (2006): 942-959.
[29] McIvor. “How the transaction cost and resource-based theories of the firm inform outsourcing evaluation.” Journal of Operations Manage, 27 (2009): 45-63.
[30] McGrath, R. G., Macmillan, I. C. and Venkataraman, S. “Defining and developing competence-a strategic process paradigm.” Strategic Management Journal, 16 (1995): 251-275.
[31] Neves, L. A., Hamacher, S. and Scavarda, L. F. “Outsourcing from the perspectives of TCE and RBV: A multiple case study.” Scientific Information System, 24(2014): 687-699.
[32] Nicholson, B., Jones, J. and Espenlaub S. Transaction costs and control of outsourced accounting: Case evidence from India. Management Accounting Research, 17 (2006): 238-258.
[33] Peteraf. “The cornerstones of competitive advantage: a resource-based view.” Strategic Management Journal, 14 (1993): 179-188.
[34] Petrochemical Global. http://www.businesswire.com/news/home/20130212006448/en/Research-Markets-Analyzing-Global-Petrochemical-Industry-2013.
[35] Poppo and Zenger. “Alternative theories of the firm: transaction cost, knowledge-based, and measurement explanations for make-or-buy decisions in information services.” Strategic Management Journal, 19 (1998): 853-877.
[36] Prahalad and Hamel. “The core competence of the corporation.” Harvard Business Review, 68(1990): 79-91.
[37] Pounder, R. W., Cantrell, R. S. and Daly, J. P. (2011). “The impact of outsourcing on firm value: newinsights.” SAM Advance Management Journal, 76 (2011).
[38] Qinn and Hilmer. “Strategic outsourcing.” Sloan Management Review, (1994): 43-55.
[39] Quinn. “Outsourcing innovation: The new engine of growth.” Sloan Management Review, 41 (2000): 13-23.
[40] Ronan. “What is the right outsourcing strategy for your process?” European Management Journal, 26 (2008): 24-34.
[41] Tallman, S. B. “Strategic management models and resource-based strategies among MNEs in a host market.” Strategic Management Journal, 12 (1991): 69-82.
[42] Teece. “Profiting from technological innovation.” Research Policy, 15 (1986): 285-305.
[43] Tebboune and Urquhart. “Netsourcing Strategies for Vendors: A Resource-Based and Transaction Cost Economics Perspective“. Journal of Information Technology, 31 (2015): 32-47.
[44] Van hoek. “The purchasing and control of supplementary third-party logistics services.” The Journal of Supply Chain Management, 36 (2000): 14-26.
[45] Williamson. “Transaction cost economics: the governance of contractual relations.” Journal of Law and Economics, 22 (1979): 3-61.
[46] Williamson. The economic institution of capitalism, The Free Press, New York, 1985.
[47] Yin. Case study research: design and methods. Thousand Oaks: Sage, 2009.
[48] Zarutskie. “The role of top management team human capital in venture capital markets: evidence from first-time funds.” Journal of Business Venturing, 25 (2010): 155-172.
Cite This Article
  • APA Style

    Tien-Chin Wang, Ming-Fa Chen. (2017). Research of Integrating RBV and TCE to Explore Outsourcing Decision of TMT. International Journal of Economics, Finance and Management Sciences, 4(6), 378-383. https://doi.org/10.11648/j.ijefm.20160406.20

    Copy | Download

    ACS Style

    Tien-Chin Wang; Ming-Fa Chen. Research of Integrating RBV and TCE to Explore Outsourcing Decision of TMT. Int. J. Econ. Finance Manag. Sci. 2017, 4(6), 378-383. doi: 10.11648/j.ijefm.20160406.20

    Copy | Download

    AMA Style

    Tien-Chin Wang, Ming-Fa Chen. Research of Integrating RBV and TCE to Explore Outsourcing Decision of TMT. Int J Econ Finance Manag Sci. 2017;4(6):378-383. doi: 10.11648/j.ijefm.20160406.20

    Copy | Download

  • @article{10.11648/j.ijefm.20160406.20,
      author = {Tien-Chin Wang and Ming-Fa Chen},
      title = {Research of Integrating RBV and TCE to Explore Outsourcing Decision of TMT},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {4},
      number = {6},
      pages = {378-383},
      doi = {10.11648/j.ijefm.20160406.20},
      url = {https://doi.org/10.11648/j.ijefm.20160406.20},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20160406.20},
      abstract = {Efficiency firms have increasingly turned to outsourcing in an effort to capture cost savings. A critique of these theories as a means of understanding the complexities of R&D outsourcing is presented. The paper has used the Resource-Based View (RBV) and Transaction Cost Economics (TCE) to examine the role of specialized capabilities as a potential source of value creation in firms. Such a study would further contribute to an understanding of the outsourcing phenomenon within firms. A research model is developed that proposes different hypotheses to test from the TCE and RBV of the firm. The main contribution of this study is the offer of a mechanism to combine both theories for the outsourcing decision. This research anticipative finding the TMT positively moderates between TCE and RBV attributes to present competence on integration is support, also indicating the decisions on outsourcing can be inherent advantages in firms.},
     year = {2017}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Research of Integrating RBV and TCE to Explore Outsourcing Decision of TMT
    AU  - Tien-Chin Wang
    AU  - Ming-Fa Chen
    Y1  - 2017/01/04
    PY  - 2017
    N1  - https://doi.org/10.11648/j.ijefm.20160406.20
    DO  - 10.11648/j.ijefm.20160406.20
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
    SP  - 378
    EP  - 383
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20160406.20
    AB  - Efficiency firms have increasingly turned to outsourcing in an effort to capture cost savings. A critique of these theories as a means of understanding the complexities of R&D outsourcing is presented. The paper has used the Resource-Based View (RBV) and Transaction Cost Economics (TCE) to examine the role of specialized capabilities as a potential source of value creation in firms. Such a study would further contribute to an understanding of the outsourcing phenomenon within firms. A research model is developed that proposes different hypotheses to test from the TCE and RBV of the firm. The main contribution of this study is the offer of a mechanism to combine both theories for the outsourcing decision. This research anticipative finding the TMT positively moderates between TCE and RBV attributes to present competence on integration is support, also indicating the decisions on outsourcing can be inherent advantages in firms.
    VL  - 4
    IS  - 6
    ER  - 

    Copy | Download

Author Information
  • Dept. of International Business, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan

  • Dept. of International Business, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan

  • Sections