Topic: The Make or Buy dilemma and Trust
Description:
In a world focussed on finding ways to reduce costs, business have sometimes mistakenly over-relied on outsourcing and subcontracting as a way of streamlining their cost structures. The once popular business motto ‘If in doubt contract out’ may no longer command as much attention as it did in the past, perhaps thanks to well publicised examples such as outsourced call centres gone wrong or transaction costs (the costs of using the market mechanism) having become more evident to real businesses. However, other trends, particularly in the context of developments in the digital economy have worked in the opposite direction, facilitating the use of the market through the use of trust inducing mechanisms that allow the monetization of digital platforms promoting exchange. This is the case of AirBnB, Ebay or Uber.
Building on some of our frequent MBA student discussions, in this talk, we will focus on exploring how Transaction Cost Economics offers us with a framework to evaluate the make-or-buy dilemma and the role that trust plays in facilitating exchange.