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Dependent on one but vulnerable to another: opportunism threats and control solutions for customization providers

Dependent on one but vulnerable to another: opportunism threats and control solutions for... While economic theory suggests that identifying alternate customers is costlier than identifying alternate specialized employees for customization providers, substantial field research evidence indicates the opposite, where providers are reportedly more dependent on employees than customers. We inquire into this contrasting picture between theory and practice through an in‐depth case study that suggests that what begins as customer dependence transforms into vulnerability to employees. While perceived vulnerability to customers is efficiently removed through ex ante controls, the physical asset specificity in each customer order generates task uncertainty, specialization and teamwork, which become the new sources of opportunism threat for the customization providers. Compounded layers of ex ante and ex post controls with frequent iterations suggest a need for continuous management (as against removal) of vulnerability to employees. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

Dependent on one but vulnerable to another: opportunism threats and control solutions for customization providers

Accounting & Finance , Volume 54 (2) – Jun 1, 2014

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References (75)

Publisher
Wiley
Copyright
Copyright © 2014 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/j.1467-629X.2012.00510.x
Publisher site
See Article on Publisher Site

Abstract

While economic theory suggests that identifying alternate customers is costlier than identifying alternate specialized employees for customization providers, substantial field research evidence indicates the opposite, where providers are reportedly more dependent on employees than customers. We inquire into this contrasting picture between theory and practice through an in‐depth case study that suggests that what begins as customer dependence transforms into vulnerability to employees. While perceived vulnerability to customers is efficiently removed through ex ante controls, the physical asset specificity in each customer order generates task uncertainty, specialization and teamwork, which become the new sources of opportunism threat for the customization providers. Compounded layers of ex ante and ex post controls with frequent iterations suggest a need for continuous management (as against removal) of vulnerability to employees.

Journal

Accounting & FinanceWiley

Published: Jun 1, 2014

Keywords: ; ; ;

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