Do make or buy decisions matter? The influence of organizational governance on technological performance

Frédéric Dalsace (), Michael Leiblein and Jeffrey Reuer
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Frédéric Dalsace: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper investigates how firms' decisions to outsource or internalize production affect their technological performance. While several popular arguments and some anecdotal evidence suggest a direct association between outsourcing and technological performance, the effects of firms' governance decisions are likely to be contingent upon several specific attributes underlying a given exchange. This paper first demonstrates how standard performance models can improperly suggest a positive relationship between firms' outsourcing decisions and their technological performance. Models that account for firm- and transaction-specific features are then presented, which indicate that neither outsourcing nor internalization per se result in superior performance; rather, a firm's technological performance is contingent upon the alignment between firms' governance decisions and the degree of contractual hazards. Copyright © 2002 John Wiley & Sons, Ltd.

Keywords: outsourcing; vertical integration; innovation (search for similar items in EconPapers)
Date: 2002-07-02
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Citations: View citations in EconPapers (109)

Published in Strategic Management Journal, 2002, Vol.23, n°9, pp. 817-833. ⟨10.1002/smj.259⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00457649

DOI: 10.1002/smj.259

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