Indian Journal of Science and Technology

Abstract

Although there are many motivations to request consulting, this study approaches them within the theoretical frameworks of transaction cost economics and sociological neoinstitutionalism. According to neoinstitutionalism, enterprises do not request consulting for economic efficiency. Instead, they think of it as an institution, and they decide to participate in consulting based on that notion rather than on economic criteria such as rationalization of management decisionmaking, legitimization of organizations, and diffusion of management concepts and innovations. Drawing on the theory of neoinstitutionalism, we identify three factors that influence the decision-making to participate in consulting: “solicitations of enterprises experienced with consulting,” “competitors’ consulting requests,” and “consultants’ solicitations and publicities.” Using the frameworks of transaction cost economics and neoinstitutionalism theory, we study small enterprises’ motivations to request consulting, the outcomes they experience, and their satisfaction with those outcomes. It is confirmed that factors drawn from transaction cost economics have significant effects on all three.
Keywords: Consulting Outcomes, Consulting Requests, Neoinstitutionalism, Transaction Cost Economics