Achim Hecker

Explaining Outsourcing Failure

This paper attempts to explain the phenomenon of outsourcing failure by integrating the Relational View and network-/graph theory. Whereas traditional transaction cost theory focuses on problems of ensuring cooperation (motivation) in vertical client-provider relations, we advocate extending the notion of transaction costs to include cooperation and coordination issues in vertical and horizontal relations. Our model depicts organizational structure as a set of nodes and relations (graph). Upon outsourcing, a subset of nodes is removed from the graph. Transaction costs are incurred as a function of both the number of relations across organizational boundaries and the extent of cooperation and coordination problems pertaining to any single relation. We compare production efficiency and transaction cost effects of three types of outsourcing (domestic, offshore, and FDI) vis-a-vis integration to derive a set of testable propositions on the determinants of outsourcing failure and success. Emphasizing the complexity of coordinating a multitude of horizontal, collaborative inter-firm relations, our research sheds a new light on outsourcing failure.

Determinanten von Offshore-Outsourcing-Aktivitäten im deutschen Mittelstand

ZusammenfassungDer vorliegende Beitrag untersucht auf Basis eines umfangreichen Datensatzes die wesentlichen Determinanten von Offshore-Outsourcing bei großen mittelständischen Unternehmen in Deutschland. Solche Aktivitäten erweisen sich als angetrieben durch die Suche nach Kostenvorteilen bei der Leistungserstellung sowie durch die angestrebte Erschließung von Auslandsmärkten. Die gezielte Suche nach überlegenen Kompetenzen und Produktionsfertigkeiten scheint bis jetzt hingegen kaum eine Rolle zu spielen. Ein wesentliches Hemmnis für Offshore-Outsourcing-Aktivitäten sind Transaktionskosten, die aus einer möglichen Hold-up-Situation resultieren. Dabei kommt auch der strategischen Bedeutung betroffener Funktionen ein signifikanter Einfluss zu. Darüber hinaus wird die Bedeutung vorhandener Internationalisierungserfahrung und -kompetenzen für die Offshore-Outsourcing-Neigung belegt.AbstractThis contribution investigates the essential determinants of offshore outsourcing among small and medium-sized enterprises (SMEs) in Germany on the basis of a substantial data set of 584 questionnaires. Offshore outsourcing proves to be driven by the search for cost advantages in the production of goods and services as well as in attempts to open foreign markets. The targeted search for superior productive capabilities and competences appears in contrast to play little role. A critical hurdle for offshore-outsourcing activities are, on the other hand, transaction costs resulting from a potential ‘hold-up situation’ in connection with the strategic importance of such activities. Also addressed is the significance of available experiences of internationalization and international management competences in contributing to a bent for offshore outsourcing.