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Information Technology and the Organizational Structure of Modern Business Outsourcing

  • Soichiro TakagiEmail author
  • Hideyuki Tanaka
Article

Abstract

The organization of modern business has been affected by the development of information technology. Information technology, in particular, affects organizational structure through vertical disintegration and international production sharing. For example, firms outsource information services such as software development and call-center operations, and also computing services. This study considers the outsourcing of information services as being promoted by a drastic reduction of transaction costs, rather than simply by the difference in production costs. This study also focuses on the service attributes that affect the transaction costs of information services, and provides an analytical tool for the firm’s choice of organizational structures. It also discusses the outsourcing decisions of firms by using this tool with examples of several types of outsourcing of information services.

Key words

Offshore Outsourcing Cloud computing Transaction Cost Economics 

Category&Number

JEL Classification Code

L2 

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Notes

Acknowledgement

The authors wish to thank the commentator for the helpful comments at The 12th International Conference of the Japan Economic Policy Association. The authors also thank anonymous referees for their useful comments. This work was partially supported by JSPS KAKENHI, Grant Number 23500306.

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Copyright information

© Japan Economic Policy Association (JEPA) 2014

Authors and Affiliations

  1. 1.Interfaculty Initiative in Information StudiesThe University of TokyoTokyoJapan
  2. 2.Interfaculty Initiative in Information Studies, Graduate School of Interdisciplinary Information StudiesThe University of TokyoTokyoJapan

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