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Type: Journal article
Title: Dependent on one but vulnerable to another: opportunism threats and control solutions for customization providers
Author: Sridharan, V.
Phang, M.
Citation: Accounting and Finance, 2014; 54(2):591-624
Publisher: Blackwell Publishing
Issue Date: 2014
ISSN: 0810-5391
Statement of
VG Sridharan, Michelle M. S. Phang
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.
Keywords: Customization; opportunism; management control; physical asset specificity; human asset specificity
Rights: © 2012 The Authors Accounting and Finance © 2012 AFAANZ
DOI: 10.1111/j.1467-629X.2012.00510.x
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