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Examining the Implications of Organizational Structure Changes from a Transaction Cost Perspective

  • Conference paper
New Studies in Global IT and Business Service Outsourcing (Global Sourcing 2011)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 91))

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Abstract

Firms’ rationale to outsource parts of their IT function are mainly based on cost reduction. Many vendors applied a high level of standardization in organizing the delivery of IT services to decrease their cost level. Drawing on the Transaction Cost Economics the objective of our study is to examine how environmental uncertainty and asset specificity affect vendors’ functional organizational structure and, in turn, influences ex-post transaction costs. A retrospective view on a case study was investigated from the perspective of a global outsourcing vendor. Our results suggest that the vendor’s functional organizational structure can be considered as a mediator in minimizing the ex-post transaction costs. Executives and managers need to be aware that uncertainty and asset specificity may lead to an increase of the coordination costs. Therefore, vendors need to reassess their organizational structure regularly and implement adjustments to control their ex-post transaction costs.

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Author information

Authors and Affiliations

  1. Faculty of Technology, Policy and Management, Delft University of Technology, The Netherlands

    Albert Plugge

  2. Faculty of Strategy, Marketing and International Business, Maastricht School of Management, The Netherlands

    Jacques Brook

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  1. Albert Plugge
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  2. Jacques Brook
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Editor information

Editors and Affiliations

  1. Warwick Business School, University of Warwick, Coventry, UK

    Julia Kotlarsky

  2. London School of Economics, London, UK

    Leslie P. Willcocks

  3. Rotterdam School of Management, Erasmus University, Rotterdam, The Netherlands

    Ilan Oshri

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© 2011 Springer-Verlag Berlin Heidelberg

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Plugge, A., Brook, J. (2011). Examining the Implications of Organizational Structure Changes from a Transaction Cost Perspective. In: Kotlarsky, J., Willcocks, L.P., Oshri, I. (eds) New Studies in Global IT and Business Service Outsourcing. Global Sourcing 2011. Lecture Notes in Business Information Processing, vol 91. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24815-3_5

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  • DOI: https://doi.org/10.1007/978-3-642-24815-3_5

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-24814-6

  • Online ISBN: 978-3-642-24815-3

  • eBook Packages: Computer ScienceComputer Science (R0)

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