What do firm boundaries do? : employment relationships and transaction governance in internal and outsourced IT projects

Firm boundaries have been the subject of much scholarly interest in recent years, as firms increasingly hire external, "contingent" workers and outsource previously core activities. However, little empirical research has directly studied what happens differently inside the firm's boundaries, versus across them. In my dissertation I study what firm boundaries do at two different levels of analysis: the individual employment relationship; and the overall transaction. Specifically, I carry out a detailed comparison of the use of regular employees, independent consultants and outsourced vendors on Information Technology (IT) projects within a large financial services institution. This comparison draws on a project survey, extensive interviews and observation, and analysis of contracts and accounting data. The first piece of empirical work examines how independent consultants, who are outside the firm's internal labor market, are treated differently from regular employees. My findings challenge theories that argue that Human Resource (HR) practices play an important role in how workers are managed. Instead, managers view and treat consultants and employees very similarly. Furthermore, consultants were laid off at a similar rate to employees during a recession. Based on these findings, I argue that scholars should pay less attention to HR practices in understanding workers' relationship with their employers. Instead, I highlight how the knowledge that workers acquire through their work and the way that employment decisions are taken within the firm play a central role in shaping workers' employment relationships. A second section compares the governance of internal projects with projects performed by an outsourced vendor. I find that the structure

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2004

Author dc:creator

• Bidwell, Matthew James, 1974-

Advisor dc:contributor.advisor

• Thomas A. Kochan.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/28604

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/28604