Production Economies, Transaction Cost And Internal Agency Cost: A Model For IS Sourcing Decisions

摘要

This paper extends prior studies on IS outsourcing by proposing a model that explicitly examines the effects of internal agency cost on IS sourcing decisions. Drawn on findings from prior IS sourcing studies, the research model in this paper argues that IS sourcing decisions are determined by the relative effects of vendor production economies, outsourcing transaction cost, and internal agency cost. Since certain attributes of transactions can simultaneous impact transaction cost and internal agency cost, the make-buy choice predicted by the research model in the current study may be different from that explained purely from a transaction cost perspective.