An investigation of the role played by frequency and uncertainty in hotel outsourcing decisions
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This paper draws on Transaction Cost Economics (TCE) theory (Coase, 1937; Williamson, 1985, 1988, 1999) to examine hotel outsourcing. The study focuses on the uncertainty and frequency attributes, two of three activity attributes that TCE theorists see as affecting the propensity to outsource. Findings relating to the third TCE activity attribute, asset specificity, are reported in Lamminmaki (2005). Qualitative data was collected by interviewing fifteen senior managers in large hotels. While several observations made supported the frequency tenet of TCE, which holds that frequently and extensively conducted activities will be outsourced to a low extent, two specific departures were noted. These departures resulted in the proposition of an extension to the TCE frequency tenet. The TCE doctrine also holds that uncertain activities will be outsourced to a low extent. Again, although observations made supported this view, one specific observation that contradicted the theory was noted.
The International Journal of Services Technology and Management
© 2009 Inderscience Publishers. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal website for access to the definitive, published version.
Economic Theory not elsewhere classified
Commerce, Management, Tourism and Services not elsewhere classified