The role of transaction costs and institutional forces in the outsourcing of recruitment

This study investigated reasons for the outsourcing of a core HRM function, recruitment. Drawing from transaction costs and institutional theories, it was hypothesised that the pressure to minimise transaction costs and the presence of industry trends towards outsourcing would be positively associated with the outsourcing of recruitment. Survey data were gathered from 1I 7 HR professionals in Australia. Both hypotheses were partially supported. Specifically, the outsourcing of recruitment activities was positively associated with trust in the agency supplying the recruitment service and with the need to reduce internal labour but not fixed costs. With regard to institutional theory, the outsourcing of recruitment was positively associated with mimetic but not coercive forces. The study concludes that although most assumptions about recruitment agency use are expressed in economic terms, in reality, HRM practices are also influenced by forces exerted by the institutional environment in which organisations are located.

The interorganizational virtual organization: Defining a Weberian ideal

The concept of the virtual organization (VO) has engendered great interest in the literature, yet there is still little common understanding of the concept, as evidenced by the multitude of labels applied to VOs. In this article, we focus on a “Weberian-ideal-type” definition of the interorganizational VO, posited in our earlier work (Kasper-Fuehrer and Ashkanasy 2001). We argue, however, that this definition left unanswered critical questions relating to the nature and effects of interorganizational VOs. We answer these questions here by explicating the terms in the definition and deriving ten corollaries, or “natural consequences” of our definition. The corollaries posit that interorganizational VOs are temporary in nature, are network organizations, are independent, and are based on swift trust. We suggest further that interorganizational VOs enable small to medium enterprises to exploit market opportunities, and enable VO member organizations to create a value-adding partnership. We also identify information and communication technology (ICT) as the essential enabler of VOs. Finally, we argue that interorganizational VOs act as a single organizational unit and that they therefore constitute a uniquely distinguishable organizational form. We conclude with suggestions for further research, including trust, organizational behavior, transaction economics, virtual HRM, and business strategy.