The Importance of Client Heterogeneity in Predicting Make-or-Buy Decisions

Authors

• Geoffrey M. Kistruck, York University
• Shad Morris, Brigham Young University Law SchoolFollow
• Justin W. Webb, University of North Carolina at Charlotte
• Charles E. Stevens, Lehigh University

Keywords

intermediation, outsourcing, client heterogeneity, professional services, transaction costs, capabilities

Abstract

Scholars have begun to merge the transaction cost economics and capabilities perspectives to examine outsourcing decisions. Further integrating these perspectives with intermediation theory, we assert that a firm's decision to use an intermediary when entering a foreign market is largely a function of the intermediary's relative capabilities and relative transaction costs (i.e., relative advantage). We hypothesize that the intermediary's relative advantage is influenced by three significantly intertwined exchange conditions: client heterogeneity, intermediary risk, and firm learning. Using a sample of 929 new foreign market initiatives by a global consulting firm, our results support our theory.

Original Publication Citation

"Kistruck, G., Morris, S. Webb, J., & Stevens, C. 2015. The Importance of Client Heterogeneity in Predicting Make-or-Buy Decisions. Journal of Operations Management, 33: 97-110."

BYU ScholarsArchive Citation

Kistruck, Geoffrey M.; Morris, Shad; Webb, Justin W.; and Stevens, Charles E., "The Importance of Client Heterogeneity in Predicting Make-or-Buy Decisions" (2015). Faculty Publications. 9015.
https://scholarsarchive.byu.edu/facpub/9015

Document Type

Peer-Reviewed Article

Publication Date

2015

Publisher

Journal of Operations Management

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Full Professor

Copyright Use Information

https://lib.byu.edu/about/copyright/