Toward a model of strategic outsourcing

Journal of Operations Management · 2007 · Volume 25 · Issue 2

DOI: 10.1016/j.jom.2006.05.003

Abstract

Acknowledging efficiency motives, firms have increasingly turned to outsourcing in an effort to capture cost savings. Transaction cost theory (TCT) has been the dominant means of explaining outsourcing as an economizing approach whereby cost efficiencies are achieved by assigning transactions to different governance mechanisms. Recent research has used the resource-based view (RBV) to examine the role of specialized capabilities as a potential source of value creation in relationships between firms. Although research in supply chain management has expanded substantially, only limited applications of TCT and the RBV are available, especially in the field of operations management. We extend both perspectives to explain conditions leading to strategic outsourcing.

Keywords

Strategic outsourcing, Operations strategy, Resource-based view, Transaction cost theory, Resource management, Value creation, Operations management, Supply chain management, Capabilities, Vertical disintegration, Intermediate markets

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