Capabilities, Contractual Hazards, and Governance: Integrating Resource-Based and Transaction Cost Perspectives

Abstract

We address independent and joint effects of contractual hazards and technological capabilities on governance, arguing that strong technological capabilities improve a firm's ability to govern transactions, making outsourcing feasible despite certain contractual hazards. Examining a random sample of 405 service contracts from a single information technology firm, we found that contractual hazards encouraged internalizing transactions. Weak technological capabilities increased the likelihood of subcontracting, but strong technological capabilities had no independent effect. The latter had impact only in the presence of certain contractual hazards. These results illuminate why firms facing similar levels of contracting hazards organize their transactions differently. 1 We acknowledge that capabilities come in many forms and variations-technological, managerial, operational, marketing-based, etc. We focus on technological capabilities, defined as superior ability to create a good or service that meets a customer's requirements for functionality, quality, and cost and schedule (see Hoetker, 2005: 78). We focus thus for several reasons. First, technological capabilities have been shown to have a strong influence on governance (e.g., Hoetker, 2005; Leiblein & Miller, 2003). Second, technological capabilities are central to resource-based theories of firm-specific advantage (see Kogut & Zander, 1992; Mahoney & Pandian, 1992; Martin & Salomon, 2003b). Finally, technological capabilities have been shown to be particularly important in high-technology industries such as information technology, which is examined here (e.g., Mayer, 2006; Mayer & Argyres, 2004; Martin & Salomon, 2003b).

International R&D service outsourcing by technology-intensive firms: Whether and where?

“…More specifically, as firms accumulate technological capabilities they will not only be under more pressure to search for world-class suppliers, but also better equipped than other firms to establish outsourcing agreements with foreign providers (Mayer & Salomon, 2006) and to effectively manage a loosely coupled network of external suppliers by performing the role of systems integrator (Brusoni et al, 2001). Therefore, although firms lacking these capabilities would also benefit from global outsourcing, whatever the motive for doing so, they may not have the capability to manage such agreements.…”

“…On the one hand, empirical studies analyzing the R&D outsourcing decisions by technological firms tended to overlook the location dimension (Afuah, 2001;Hitt et al, 1998;Leiblein & Miller, 2003;Mayer & Salomon, 2006;Mol, 2005;Narula, 2001;Pisano, 1990;Veugelers & Cassiman, 1999). On the other, those studies more focused on the location decision either tended to analyze only FDI or internal modes of governance (captive offshoring) (Belderbos, 2001;Berry, 2006;Bunyaratavej et al, 2007;Cantwell, 1995;Demirbag & Glaister, 2010;Doh, Bunyaratavej, & Hahn, 2009;Kuemmerle, 1999;Odagiri & Yasuda, 1996;Piscitello & Santangelo, 2010;von Zedwitz & Gassmann, 2002) or to analyze the offshoring phenomenon in the aggregate without distinguishing between internal (captive offshoring) and external (outsource offshoring) modes of governance (Dossani & Kenney, 2003;Lewin & Couto, 2007;Lewin et al, 2009;Manning et al, 2008;Mudambi, 2008).…”

Capacidad Transaccional: Evidencias Del Sistema Financiero Peruano

“…Diversos autores han mostrado intentos de materializar esa relación. Estos autores han abordado diferentes aspectos de esta relación, entre ellos, la confianza (Dyer, 1997;Poppo & Zenger, 2002), la coordinación eficiente (Langlois & Foss, 1999), la creación de mayores beneficios en la firma (Madhok, 1996), el aprendizaje (Mayer & Argyres, 2004), la mejora de la capacidad de elección (Hoetker, 2005), la reducción de costos de transacción bajo riesgos contractuales (Mayer & Salomon, 2006) y el complemento para la innovación . Este nuevo constructo se conoce, en la literatura, como la capacidad transaccional y será ampliado en el próximo ítem.…”

“…Aunque existen algunos estudios sobre la capacidad transaccional (Argyres & Mayer, 2007;Cannon & Homburg, 2001;Dyer, 1997;Dyer & Singh, 1998;Hoetker, 2005;Jacobides & Winter, 2005;Langlois & Foss, 1999;Loasby, 2002, Madhok, 1996Mayer & Salomon, 2006;Poppo & Zenger, 2002;, su consolidación es un tema pendiente.…”

“…La posibilidad y necesidad existentes para que ambos enfoques puedan complementarse ha hecho que diversos investigadores (Argyres & Mayer, 2007;Brahm & Tarziján, 2014;Hoetker, 2005;Jacobides & Winter, 2005;Langlois & Foss, 1999;Loasby, 2002;Mayer & Salomon, 2006;Poppo & Zenger, 2002) sigan la propuesta de analizarlos de forma conjunta. Esa nueva corriente de investigación es diversa.…”