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The importance of client heterogeneity in predicting make‐or‐buy decisions
Author(s) -
Kistruck Geoffrey M.,
Morris Shad S.,
Webb Justin W.,
Stevens Charles E.
Publication year - 2015
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/j.jom.2014.11.001
Subject(s) - transaction cost , intermediation , outsourcing , merge (version control) , business , industrial organization , pooling , database transaction , microeconomics , intermediary , sample (material) , marketing , economics , computer science , finance , chemistry , chromatography , artificial intelligence , programming language , information retrieval
Scholars have begun to merge the transaction cost economics and capabilities perspectives to examine outsourcing decisions. Further integrating these perspectives with intermediation theory, we assert that a firm's decision to use an intermediary when entering a foreign market is largely a function of the intermediary's relative capabilities and relative transaction costs (i.e., relative advantage). We hypothesize that the intermediary's relative advantage is influenced by three significantly intertwined exchange conditions: client heterogeneity, intermediary risk, and firm learning. Using a sample of 929 new foreign market initiatives by a global consulting firm, our results support our theory.