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When Performance Fails to Meet Expectations: Managers’ Objectives for Outsourcing

Published online by Cambridge University Press:  01 January 2023

Suzanne Young  and
Johanna Macneil
Johanna Macneil
Affiliation:
Bowater School of Management and Marketing, Deakin University
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Abstract

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Managers may implement outsourcing for one or more of a range of reasons: to improve strategic focus, to achieve numerical or functional flexibility, to reduce costs or risk, to change their own roles, to change organisational culture or workplace power structure, and to intensify work effort. However, often there are associated costs, either unanticipated or unquantified. This paper provides evidence from two food processing companies to address the following questions: (1) Why do managers pursue outsourcing? and (2) Have managers anticipated and quantified the potential costs as well as the benefits of outsourcing? We conclude that while it seems clear that managers do begin with clear objectives for outsourcing and anticipate that benefits will flow, sometimes these objectives are not met, unexpected costs are incurred, or objectives change as new information is available or situations change. In other cases managers have been unable to objectively substantiate the outsourcing decision.

Type
Research Article
Information
The Economic and Labour Relations Review , Volume 11 , Issue 1 , June 2000 , pp. 136 - 168
Copyright
Copyright © The Author(s) 2000

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