Which controls are better for service outsourcing? Integrating service-dominant logic and service characteristics

A comprehensive examination of the role of outsourced services’ characteristics in determining control systems is lacking in the literature. While the service characteristics paradigm (intangibility, heterogeneity, inseparability, and perishability [IHIP]) has informed much of the services research in the past four decades, in the last decade, the service-dominant logic (SDL) has provided a new way to conceptualize the marketing of goods and services. However, there has been no attempt to integrate these two perspectives. This study fills these gaps by examining control systems in service outsourcing by means of a midrange theory that integrates the new SDL framework and the legacy of the service characteristics approach. The authors add a fifth characteristic, digitizability, to IHIP and develop a conceptual framework to derive research propositions based on the foundational premises of the SDL. They also examine the moderating effects of globalization and the outsourced service’s closeness to the organization’s core competence.