Make-or-buy analysis with TCT and RBV assumptions evidence from Algerian hotel firms
Keywords:
Make-or-buy decision, Transaction Cost Theory (TCT), Resource-Based View (RBV), hotel industry, Algeria, outsourcingAbstract
This study examines the make-or-buy decisions in Algerian hotel firms by integrating the theoretical perspectives of Transaction Cost Theory (TCT) and Resource-Based View (RBV). Using qualitative data from semi-structured interviews with 16 managers of four- and five-star hotels in western Algeria, the research analyzes how firms determine whether to internalize or outsource key services. The findings indicate that whle TCT serves as the primary explanatory framework—emphasizing cost, risk, and institutional inefficiencies—RBV plays a complementary yet significant role, particularly in decisions involving core capabilities and customer experience. Contextual constraints, such as unreliable suppliers, rigid public procurement regulations, and limited strategic resources, often limit managerial flexibility. The study introduces the concept of bounded strategic rationality to better explain decision-making in emerging service markets and proposes a contextualized integration of TCT and RBV. Although limited by its qualitative scope and regional focus, the research provides practical insights for hotel managers seeking to optimize sourcing strategies under institutional constraints, as well as for policymakers aiming to reform procurement frameworks. Additionally, it lays a conceptual foundation for future studies.
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