The Effect of the Customer Offer on the Make-or-Buy Decision in E-Commerce -A TCE Perspective

Abstract: Background and problem: Studies show a growth of outsourcing in recent years and the retailers in the relatively young industry of e-­‐commerce have great possibilities to buy services from external companies, without it being noticed. This is why this thesis studies the make-­‐or-­‐buy decision for these companies. Theory of transactional cost economics (TCE) and trust is often used in order to explain the decision of make or buy and choice of governance structure in an inter-­‐organizational relationship (IOR). In this thesis the desire to secure the customer offer is added as a factor that affects the make-­‐or-­‐buy decision through the dimensions of transactional cost economics. Research questions: Does the customer offer affect the make-­‐or-­‐buy decision? And if the choice is to buy, how are these inter-­‐organizational relationships (IORs) structured and controlled? Purpose: The purpose of this thesis is to explain how the e-­‐tailer’s offer to the end consumer may influence the e-­‐tailer’s IOR from a TCE and trust perspective. In order to fulfill this purpose, we will create a model based on TCE in relation to the customer offer. Methodology: This thesis is based on an interview survey of 11 interviews and a mini case study of 4 interviews. This was done to be able to both generalize and make comparisons to some extent, and at the same time gain a deeper understanding of the complex problem. Analysis and conclusion: The model seems to work to some extent. It appears evident that the offer to the customer influences the three dimensions of TCE and thus the make-­‐or-­‐buy decision. There are also indications that the customer offer puts pressure on the dimension of uncertainty and increases its importance more than what is argued in the theory of TCE. Moreover, it is discussed that the dimensions of TCE may not alone describe the make-­‐or-­‐buy decision and choice of governance structure in the IORs in this setting. The empirical findings showed other variables that had an impact, which were hard to connect to frequency, asset specificity, uncertainty and trust.