Title: An investigation of the role played by frequency and uncertainty in hotel outsourcing decisions

Authors: Dawne Lamminmaki

Addresses: Department of Accounting, Finance and Economics, Centre for Tourism Sport and Service Innovation, Griffith University, Gold Coast Campus, Queensland 4222, Australia

Abstract: This paper draws on Transaction Cost Economics (TCE) theory (Coase; Williamson) to examine hotel outsourcing. The study focuses on the uncertainty and frequency attributes, two of three activities attributes that TCE theorists see as affecting the propensity to outsource. Qualitative data was collected by interviewing 15 senior managers in large hotels. While several observations made supported the frequency tenet of TCE, which holds that frequently and extensively conducted activities will be outsourced to a low extent, two specific departures were noted. These departures resulted in the proposition of an extension to the TCE frequency tenet. The TCE doctrine also holds that uncertain activities will be outsourced to a low extent. Again, although observations made supported this view, one specific observation that contradicted the theory was noted.

Keywords: transaction cost economics; TCE; hotels; outsourcing; transaction costs; uncertainty; frequency; hotel management.

DOI: 10.1504/IJSTM.2009.022524

International Journal of Services Technology and Management, 2009 Vol.11 No.2, pp.182 - 201

Published online: 14 Jan 2009 *

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