| While firms increasingly outsource training and development activities, there is much controversy about whether this alternative allows them to build the human capital necessary to gain competitive advantages. This study draws on transaction cost economics (TCE) and social exchange theory to examine effects associated with the outsourcing of training activities.;TCE suggests that the effects associated with outsourcing will depend on the degree to which a firm is vulnerable to opportunistic behavior by the vendor (Williamson, 1979). TCE further proposes that vulnerability to opportunistic behavior will be affected by characteristics of the transaction and the institutional environment. However, TCE fails to recognize that exchanges between customers and suppliers occur with the knowledge and experience of previous transactions (Nooteboom, 1996). Thus, social exchange theory (Blau, 1964; Emerson, 1962) compliments TCE by emphasizing the importance of enduring factors such as trust, communication behaviors, and dependencies that develop as a result of continued relations between parties over time.;In this study, responses were provided by both a training specialist (who reported on the independent variables) and an HR generalist (who reported on the dependent measure) in 157 organizations. Using structural equation modeling to examine the responses, results suggested that the data provided an acceptable fit to the proposed model.;From a TCE perspective, results showed that more explicit contractual agreements were positively related to customer satisfaction. Additionally, the data suggested that contractual specificity was greater where idiosyncratic training was involved, where uncertainty was low, and where customers had more outsourcing-related knowledge, skills, and abilities.;From a social exchange perspective, results suggested that building high levels of trust was important to customer satisfaction. Further, it was observed that trust was greater where parties had been together longer, where they had more effective communication behaviors, and where idiosyncratic training was involved. |
