Abstract
Outsourcing, the use of an external supplier for any value chain function, can bring advantages, such as cost savings or access to specialized know-how. It can also cause problems such as a loss of control over the function’s quality. Over time, more and more activities of the enterprise have proved amenable to being outsourced effectively. The spread of economic development has enhanced markets for intermediate and this has enabled greater outsourcing. Academic and popular views of outsourcing have shifted back and forth between embracing the benefits while worrying about industrial decline in the home country.
This entry was originally published on Palgrave Connect under ISBN 978-1-137-49190-9. The content has not been changed.
Similar content being viewed by others
References
Abraham, K.G., and S.K. Taylor. 1996. Firms’ use of outside contractors: Theory and evidence. Journal of Labor Economics 14: 394–424.
Athreye, S. 2005. The Indian software industry and its evolving service capability. Industrial and Corporate Change 14: 393–418.
Barthelemy, J. 2003. The seven deadly sins of outsourcing. Academy of Management Executive 17: 87–98.
Bettis, R.A., S.P. Bradley, and G. Hamel. 1992. Outsourcing and industrial decline. Academy of Management Executive 6: 7–22.
Brusoni, S., A. Prencipe, and K. Pavitt. 2001. Knowledge specialization, organizational coupling, and the boundaries of the firm: Why do firms know more than they make? Administrative Science Quarterly 46: 597–621.
Bryce, D.J., and M. Useem. 1998. The impact of corporate outsourcing on company value. European Management Journal 16: 635–643.
Buckley, P.J. 2009. Internalisation thinking: From the multinational enterprise to the global factory. International Business Review 18: 224–235.
Byrne, J.A. 1993. The virtual corporation. Business Week, 8 February 1993 issue. Available at http://www.businessweek.com/stories/1993-02-07/the-virtual-corporation. Accessed 9 Dec 2014.
Chesbrough, H.W., and D.J. Teece. 1996. Organizing for innovation: When is virtual virtuous? Harvard Business Review 74: 65–73.
Dedrick, J., K.L. Kraemer, and G. Linden. 2010. Who profits from innovation in global value chains? A study of the iPod and notebook PCs. Industrial and Corporate Change 19: 81–116.
Dossani, R., and M. Kenney. 2007. The next wave of globalization: Relocating service provision to India. World Development 35: 772–791.
Ernst, D., and P. Guerrieri. 1998. International production networks and changing trade patterns in east Asia: The case of the electronics industry. Oxford Development Studies 26: 191–212.
Gereffi, G., J. Humphrey, and T. Sturgeon. 2005. The governance of global value chains. Review of International Political Economy 12: 78–104.
Gilley, K.M., and A. Rasheed. 2000. Making more by doing less: An analysis of outsourcing and its effects on firm performance. Journal of Management 26: 763–790.
Görg, H., and A. Hanley. 2011. Services outsourcing and innovation: An empirical investigation. Economic Inquiry 49: 321–333.
Jiang, B., J.A. Belohlav, and S.T. Young. 2007. Outsourcing impact on manufacturing firms’ value: Evidence from Japan. Journal of Operations Management 25: 885–900.
Jonas, N. (1986). The Hollow Corporation. Business Week, 3 (March).
Kotabe, M., and M.J. Mol. 2009. Outsourcing and financial performance: A negative curvilinear effect. Journal of Purchasing and Supply Management 15: 205–213.
Larsen, M.M., S. Manning, and T. Pedersen. 2013. Uncovering the hidden costs of offshoring: The interplay of complexity, organizational design, and experience. Strategic Management Journal 34: 533–552.
Monteverde, K. 1995. Technical dialog as an incentive for vertical integration in the semiconductor industry. Management Science 41: 1624–1638.
Monteverde, K., and D.J. Teece. 1982. Supplier switching costs and vertical integration in the automobile industry. Bell Journal of Economics 13: 206–213.
Pitelis, C.N. 2002. Stephen Hymer: Life and the political economy of multinational corporate capital. Contributions to Political Economy 21: 9–26.
Quinn, J.B., and F.G. Hilmer. 1994. Strategic outsourcing. Sloan Management Review 35: 43–55.
Rothaermel, F.T., M.A. Hitt, and L.A. Jobe. 2006. Balancing vertical integration and strategic outsourcing: Effects on product portfolio, product success, and firm performance. Strategic Management Journal 27: 1033–1056.
Schwörer, T. 2013. Offshoring, domestic outsourcing and productivity: Evidence for a number of European countries. Review of World Economics 149: 131–149.
Sobol, M.G., and U. Apte. 1995. Domestic and global outsourcing practices of America’s most effective IS users. Journal of Information Technology 10: 269–280.
Srikanth, K., and P. Puranam. 2011. Integrating distributed work: Comparing task design, communication, and tacit coordination mechanisms. Strategic Management Journal 32: 849–875.
Strange, R. 2011. The outsourcing of primary activities: Theoretical analysis and propositions. Journal of Management & Governance 15: 249–269.
Strange, R., and J. Newton. 2006. Stephen Hymer and the externalization of production. International Business Review 15: 180–193.
Teece, D.J. 1976. The multinational corporation and the resource cost of international technology transfer. Cambridge, MA: Ballinger.
Teece, D.J. 1984. Economic analysis and strategic management. California Management Review 26: 87–110.
Teece, D.J. 1986. Profiting from technological innovation. Research Policy 15: 285–305.
Teece, D.J. 1989. Inter-organizational requirements of the innovation process. Managerial and Decision Economics 10: 35–42.
Teece, D.J. 2006. Reflections on profiting from innovation. Research Policy 35: 1131–1146.
Williamson, O.E. 1975. Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Copyright information
© 2016 The Author(s)
About this entry
Cite this entry
Teece, D.J. (2016). Outsourcing. In: Augier, M., Teece, D. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-94848-2_730-1
Download citation
DOI: https://doi.org/10.1057/978-1-349-94848-2_730-1
Received:
Accepted:
Published:
Publisher Name: Palgrave Macmillan, London
Online ISBN: 978-1-349-94848-2
eBook Packages: Springer Reference Business and ManagementReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences