Implications of uncertainty on firm outsourcing decisions

Issue title: Outsourcing

Guest editors: Falguni Sen

Article type: Research Article

Authors: King, David R.^{; *}

Affiliations: US Air Force, 1060 Air Force Pentagon (F/A-22 PEO) Washington, DC 20330-1060, USA. Tel.: +1 703 588 7304; Fax: +1 703 588 6247; E-mail: [email protected]

Note: [*] The views expressed in this research are those of the authors and do not reflect the official policy or position of the United States Air Force, Department of Defense, or the U.S. Government.

Abstract: Outsourcing inherently considers what activity needs to reside within a given firm. The difficulty of exchanges between firms in the face of uncertainty affects where work on developing and producing new products is performed. Theory is developed and explored using a case study that explains firm sourcing decisions as a response to uncertainty within the context of industry structure and related transaction costs. Viewing outsourcing broadly results in a better delineation of outsourcing options. Implications for management research and practice are identified.

Keywords: Outsourcing, innovation, firm boundaries, uncertainty, transaction cost economics, industrial organization economics

DOI: 10.3233/HSM-2006-25204

Journal: Human Systems Management, vol. 25, no. 2, pp. 115-125, 2006