Abstract
Many organizations have employed the concepts of ‘asset specificity’ and ‘uncertainty’ from transaction cost theory (TCT), and ‘strategic resources’ from the resource-based view (RBV) as drivers of their information systems (ISs) sourcing decisions. They, however, face a dilemma when TCT and the RBV suggest different sourcing alternatives. The study identifies contexts where sourcing decisions made based on these two theories differ, and examines which theory accounts better for an organization's sourcing decisions. Results show that a high-specificity asset is a major driver of sourcing decisions. It overpowers the effects of uncertainty on sourcing decisions; while a non-strategic resource has no impact on sourcing decisions. In particular, where the two theories make conflicting predictions, organizations should not always outsource non-strategic resources. Non-strategic resources that involve high specificity should be retained internally. The paper concludes with implications for academics and practitioners, and a discussion of future research directions.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
