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Poppo and Zenger (1998 ) p resented by Yaxian Xie

Testing alternative theories of the firm: transaction cost, knowledge‐based, and measurement explanations for make‐or‐buy decisions in information services. Poppo and Zenger (1998 ) p resented by Yaxian Xie. Introduction. Research Questions

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Poppo and Zenger (1998 ) p resented by Yaxian Xie

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  1. Testing alternative theories of the firm: transaction cost, knowledge‐based, and measurement explanations for make‐or‐buy decisions in information services Poppo and Zenger (1998) presented by Yaxian Xie

  2. Introduction • Research Questions • Considering competing/alternative explanations based on TCE, KBV and measurement issues, how is boundary choice driven by exchange attributes? • Contributions • Comparative examination • DVs: • Boundary choice • governance performance (methodological difficulty)

  3. A Model of Institutional Comparative Performance

  4. Determinants of Comparative Performance • Asset specificity • Measurement difficulty • Technological uncertainty • Economies of scale • Magnitude of skill set

  5. Method • Data • Key informant • Sample: 1368 information service exchanges (across 152 companies) • Measurement (DVs) • Exchange Performance (common features across market and firm): • overall cost; quality of output or service; responsiveness to problems or inquiries • Boundary Choice • Percentage of outsourcing • Decision-making process measure

  6. Results

  7. Results (part)

  8. Conclusions • Findings • Support TCE (asset specificity decreases market effectiveness) • Consistent with agency theory and property rights (measurement difficulties decrease internal performance; NOT market performance) • Boundary choices matter (markets and hierarchies possess different capacities with various exchange attributes) • Contributions • Comparative examination of multiple theories

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