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Transaction cost and its effects towards outsourcing

Mustapa, Fara Diva and Hashim, Maizon (2006) Transaction cost and its effects towards outsourcing. In: Quantity Surveying National Convention, 4-5th Sept. 2006, Sheraton Subang Hotel.

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Abstract

This paper explores the drawbacks of outsourcing which surfaces from the transaction costs. Coupled with the benefits to the host organisation are the drawbacks which include the information costs, negotiating and bargaining, and the costs of policing and enforcement. The paper is based on a case study carried out on the outsourcing of the healthcare support services by the Malaysian Ministry of Health. The case study attempts to generate an understanding on the causes of the significant increase in the operational costs of the abovesaid healthcare support services and relating it to transaction costs. Structured interviews were conducted on those directly involved in the planning, implementing and monitoring of the outsourcing process of the healthcare support services. The findings indicated that bounded rationality, opportunism and asset specificity are the main components of the transaction costs. However, the significant increase in the operational costs of the healthcare support services of the Malaysian Ministry of Health was not entirely due to the effects of the drawbacks of outsourcing.

Item Type:Conference or Workshop Item (Paper)
Additional Information:ISBN 983-41749-2-6
Uncontrolled Keywords:transaction costs, drawbacks, outsourcing, and healthcare support services
Subjects:H Social Sciences > HG Finance
Divisions:Geoinformation Science And Engineering (Formerly known)
ID Code:10687
Deposited By: Ms Zalinda Shuratman
Deposited On:22 Oct 2010 04:57
Last Modified:25 Oct 2010 04:50

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