Abstract

This research-in-progress considers the make/buy dichotomy common in research on IT outsourcing (ITO) transaction arrangements. Recent strategic management research finds that several kinds of transaction arrangements exist and categorizes them on three independent dimensions of control. Using a sample of 100+ ITO transactions from a small consulting firm, I plan to empirically test the relationship between use of these arrangements in ITO transactions and value created and captured by the transaction partners. Expected findings of the completed research will contribute to the outsourcing literature by validating a more nuanced means of analyzing outsourcing transactions. In addition, this research aids scholars’ understanding of how transaction arrangements contribute to the creation of value for transaction partners. Finally, this research contributes an additional IS perspective on a prominent theory of the firm, transaction cost economics (TCE), and contributes to ongoing debate in the IS literature regarding the applicability of TCE to ITO transactions.

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