The Role of Resource Based View and Transaction Cost Economics in Outsourcing Decision and Implementation – Methodological and Research Paradigmatic Review

The historical heritage for the adoption of outsourcing concept is attributed to cost savings. Gradually, outsourcing concept has moved beyond the cost saving measure to a strategic theme wherein evaluation of core competency, competition and resource framework has become important criterion in outsourcing. This article examines the academic literature to do a comprehensive assessment of research activities regarding the role of theoretical dimensions like resource based view and transaction cost view in outsourcing strategy. The objective of this article is six fold. Firstly, it examines the basic theme of Outsourcing, TCE [1] and RBV [2] theories. Secondly, it determines the methodology review framework and data collection approach to do comprehensive assessment and synthesis of research activities till date. Thirdly, it undertakes the analysis and interpretation regarding status of RBV and TCV in outsourcing strategy from 1991 to 2009 across nineteen academic journals, to evaluate and compare the current and past research trends in terms of methodologies applied. Fourthly, it compares and contrasts the role of theoretical disciplines during different stages of outsourcing strategy (decision making versus implementation). Fifthly, it compares the published outsourcing research and trends of work regarding the increasing importance of RBV and TCE together as a criterion for outsourcing strategy rather than individually. Finally, it uncovers the implications of this study and the directions for future research. Keywords: RBV; TCE; outsourcing strategy; qualitative research; quantitative research; research paradigms; outsourcing decision [1] TCE refers to Transaction Cost Economics theory. [2] RBV refers to Resource Based View theory.