Services based outsourcing continues to be a growing trend for US companies. At such a juncture, there is a tendency for companies to pursue this strategy without careful evaluation of the costs and risks involved. The evaluation of the cost-benefit analysis is crucial before making a decision as to whether one should outsource or not. Transactional Cost Economics (TCE) is one model that has re...

Purpose To determine the impact of announcements regarding ICT-enabled offshoring on the share prices of public companies. Method/approach – The study is carried out by means of an event study. Findings The finding from this research is that investors do not tend to reward offshoring announcements. It is most likely that the value of the firm will be perceived as unchanged or if there is a reac...

Firms’ boundary choices have undergone careful examination in recent years, particularly in information services. While transaction cost economics provides a widely tested explanation for boundary choice, more recent theoretical work advances competing knowledge-based and measurement cost explanations. Similar to transaction cost economics, these theories examine the impact of exchange attribut...

Transaction cost economics faces serious problems concerning the way it deals, or fails to deal, with bounded rationality, the efficiency of outcomes, trust, innovation, learning and the nature of knowledge. The competence view yields an alternative perspective on the purpose and boundaries of the firm. However, the competence view cannot ignore issues of governance, and in spite of serious cri...

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