The impact of business process outsourcing on firm performance and the influence of governance : a long term study in the German banking industry

Does BPO pay off at the firm-level? Although there are several studies which analyze the potential benefits of BPO, there is a virtual absence of research papers on BPO outcomes. Based on an analysis of 137 Business process outsourcing (BPO) ventures at 254 German banks in a period between 1994 and 2005, we found that the outsourcer's financial performance in terms of profitability and cost efficiency was increased significantly compared to industry peers without BPO. The increase stems not from workforce reductions but rather from increased employee productivity. Further, we show how BPO governance ensures BPO success: individually negotiated outsourcing contracts help to improve cost efficiency and profitability measures. Relational governance based on trust has only positive effects on profitability. Keywords: Business Process Outsourcing, firm performance, firm characteristics, banking, German banks, governance JEL Classifications: G21, L14, L21, L2

Market-Based Instruments for Water Allocation in India: Issues and the Way Forward

Institutions do matter in managing water scarcity. Institutional reforms in water sector in recent years have tried to replace the existing 'command-and-control approach' with more innovative and comprehensive marketbased approach. Based on a comprehensive literature review, this paper highlights various issues involved in marketbased institutional reforms in the water sector in various countries. This paper finds that even though there are some problems, the market-based institutional reforms are capable of generating relatively higher benefits through efficient, equitable and sustainable water allocation mechanisms. This paper also provides policy suggestions on introducing market-based instruments formally in the water sector in the Indian context

Outsourcing the Human Resource Function: Environmental and Organizational Characteristics that Affect HR Performance

A theoretical model is presented that identifies environmental and organizational characteristics that affect human resource (HR) performance in an organization. Specifically, we address the issue of when and under what circumstances does HR outsourcing contribute value to the firm by attempting to identify environmental and organizational characteristics that affect HR department performance and how HR outsourcing mediates that relationship. We propose that supplier competition in the HR provider market has a direct effect on the amount of HR outsourcing which in turn has a direct effect on HR performance. Environmental uncertainty (primary, competitive, and supplier) is proposed to moderate the relationship between amount of HR outsourcing and HR performance while asset specificity is proposed to moderate the relationship between supplier competition and amount of HR outsourcing. An earlier version of this paper was presented at the Southwest Academy of Management meeting in Houston, Texas, March, 2003, and received the 2003 Irwin/McGraw-Hill Distinguished Paper Awar

Traceability in the U.S. Food Supply: An Application of Transaction Cost Analysis

Suboptimal supply of food and agricultural traceability is framed in a transaction cost analysis. We propose a model that considers the variables of opportunism potential, agency costs, uncertainty, asset specificity, frequency, and transaction costs. The model is then applied to the development of a typology of feasible governance modes – market, hybrid, firm, or public bureau, considering levels of transaction costs and competencies of private firms. Theoretical and practical implications are discussed and future research opportunities are suggested.traceability supply, transaction cost economics, agency theory, Agribusiness,

An evaluation of performance information procurement system (PIPS)

Since procurement is seen as crucial for project success, many\ud methods have been developed and papers written about this issue. A remarkable\ud contribution in this field comes from Dean Kashiwagi (Arizona State University,\ud USA) who underpins his support for the Performance Information Procurement\ud System (PiPS) with claims of high project performance and client satisfaction.\ud Kashiwagi’s explanation for PiPS’s effects is based upon a theoretical\ud framework that relates to staff members’ ability to deal appropriately with\ud information by making sound decisions based not just on implicit expectation\ud and tacit experience. This is not, however, a satisfactory explanation. This paper\ud provides an overview of New Institutional Economics perspectives which are\ud better able to explain the effects of PiPS. The linking of these theories to\ud innovative PiPS elements clears the path to effectively select and apply PiPS\ud elements within suitable projects in the Dutch construction industry. This will\ud enhance industry performance and is of interest to all stakeholders