ABSTRACT
This chapter examines key concepts related to outsourcing. It aims to compare transaction cost, resource-based and network-based perspectives on the outsourcing decision. The chapter presents a framework for analysing 'make, buy or ally’ decisions and the connections between outsourcing and sustainability. It also examines outsourcing decision models by evaluating the so-called ‘make-or-buy’ decision. To consider the make-or-buy decision from a more theoretical perspective it is necessary to explore three important theories: transaction cost economics (TCE), the resource-based view (RBV) and the interaction approach developed by the Industrial Marketing and Purchasing group. TCE is one of the most established economic theories, which underpins not only the concept of outsourcing but also purchasing and supply management. The extended resource-based view presents the interpretation of classic RBV, conceived where the structure and function of a relationship relates to the specificity of resources to be transferred.
