Critical Competencies in Virtual Service Webs

Julian Jones, B. Bowonder and Douglas Wood

European Management Journal, 2003, vol. 21, issue 1, 48-61

Abstract: The paper reviews Williamson's transaction cost framework [Markets and Hierarchies (1975)] in light of new, and often location-independent influences to argue that conventional concepts including clustering, scale and scope economies and comparative advantage are becoming less clearly defined, and hence less useful in predicting industry structures in service transactions. Using a sample of service-based innovations, we describe how Williamson's account omits the key role that underwriting plays in mobilising new web-based options. The resulting 'service web model' provides a more complete account of the fragmentation of service chains arising from virtualisation and adds another dimension to discussion of comparative advantage conventionally focused primarily on goods exchanges.

Keywords: Firm; boundaries; Comparative; advantage; Outsourcing; Global; value; chains; Virtualisation; Transaction; costs; Services; Governance (search for similar items in EconPapers)
Date: 2003
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