Management Control of Support Services: The Case of IT Sourcing

22 Pages Posted: 11 Jul 2009

See all articles by Eric La Lau

Eric La Lau

affiliation not provided to SSRN

Michel A. van der Laan

affiliation not provided to SSRN

Anne-Marie Kruis

Nyenrode University

Roland F. Spekle

Nyenrode Business University

Date Written: April 10, 2009

Abstract

This paper provides evidence on the factors that influence the design of the control arrangements that govern support services. Based on TCE, we hypothesize that control structure choices depend on asset specificity, uncertainty, and frequency. Using survey data on IT sourcing decisions from 89 firms in the construction industry, we find support for most of our hypotheses. Our results indicate that asset specificity negatively affects firms’ propensity to outsource, and that (behavioural) uncertainty intensifies this negative effect. As expected, we also find that frequency has a negative direct effect on the willingness to outsource IT services provision. However, we find no support for the hypothesized interaction between asset specificity and frequency.

Keywords: support services, sourcing decisions, information technology, transaction cost economics

JEL Classification: L22, M41

Suggested Citation

La Lau, Eric and van der Laan, Michel A. and Kruis, Anne-Marie and Spekle, Roland F., Management Control of Support Services: The Case of IT Sourcing (April 10, 2009). Available at SSRN: https://ssrn.com/abstract=1432628 or http://dx.doi.org/10.2139/ssrn.1432628

Eric La Lau

affiliation not provided to SSRN ( email )

Michel A. Van der Laan

affiliation not provided to SSRN ( email )

Anne-Marie Kruis

Nyenrode University ( email )

3621 BG Breukelen
Netherlands

Roland F. Spekle (Contact Author)

Nyenrode Business University ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC
Netherlands

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