Outsourcing and industrial decline

Bettis, Richard A.; Bradley, Stephen P.; Hamel, Gary

doi:10.5465/ame.1992.4274298

Cited by 355 publications

(233 citation statements)

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“…1 Outsourcing can lead to hollowing out and an accompanying loss of competitive distinction (Bettis, Bradley, and Hamel, 1992;Chesbrough and Teece, 1996), a danger especially eminent in industries where little value is added by integration and assembly (Brusoni, Prencipe, and Pavitt, 2001). Outsourcing increases transaction costs (Williamson, 1975) in subtle, not so visible ways (Masten, 1993), due to the difficulty of monitoring behaviour of 1 It is an interesting paradox that supporters of outsourcing are often found within the camp of the inside-out view of firm strategy, which argues competitive advantage starts with core competences and firm resources inside the firm, while the opponents of outsourcing are those that use an outside-in approach, arguing competitive advantages arises from analysing the industry structure and positioning the firm in that industry.…”

Section: Outsourcing and Performancementioning

confidence: 99%

Outsourcing and financial performance: A negative curvilinear effect

Kotabe

Mol

2009

Journal of Purchasing and Supply Management

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This study asks how a firm's degree of outsourcing across all activities influences financial performance. We argue there is an optimal degree of outsourcing, where firms outsource some activities yet integrate others, and that deviations lower performance in a negatively curvilinear fashion. We find empirical support, using 1995 and 1998 data on a sample of manufacturing businesses in the Netherlands, and show that the steepness of the curve increases under conditions of high uncertainty. We show the magnitude of the uncertainty effect on performance outcomes through a post hoc scenario analysis. Thus we provide a specific, theoretically and empirically grounded prediction of how outsourcing affects performance with implications for theory and practice.

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Section: Outsourcing and Performancementioning

confidence: 99%

Outsourcing and financial performance: A negative curvilinear effect

Kotabe

Mol

2009

Journal of Purchasing and Supply Management

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“…In this study we include a categorical variable indicating the importance of new technology for the firms' products. Outsourcing activities may positively affect productivity (Bettis et al 1992; D'Aveni and Ravenscraft 1994; Lei and Hitt 1995;Quinn 1992). The entrepreneur will contract out those activities that are most time-consuming, of which (s)he has little experience or that do not belong to the core business.…”

Section: Sample and Variable Descriptionmentioning

confidence: 99%

Allocation and productivity of time in new ventures of female and male entrepreneurs

Verheul

Carree²,

Thurik

2009

Small Bus Econ

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This paper investigates time allocation decisions in new ventures of female and male entrepreneurs using a model that distinguishes between effects of preferences and productivity on the number of working hours. Using data of 1,158 entrepreneurs we find that the preference for work time in new ventures relates to start-up motivation, propensity to take risk and availability of other income. Productivity of work time relates to human, financial and social capital endowments and the prevalence of outsourcing activities. This study also evaluates actual profit effects 1 year after start-up. We find that on average women invest less time in the business than men. This can be attributed to both a lower preference for work time (driven by risk aversion and availability of other income) and a lower productivity per hour worked (due to lower endowments of human, social and financial capital).

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“…It could vary from components to sub-systems and even completed products (Bettis et al, 1992;Feenstra & Hanson, 1996). Scholars have also linked core competencies in relation to defining outsourcing has been brought in by Sharpe (1997), where it is looking at different suppliers for activities which doesn't fall in to a firm's core competence.…”

Section: Defining Outsourcing and Examining The Evolutionmentioning

confidence: 99%

A Reality or Myth: Outsourcing for Cost Optimization

Ponnamperuma¹

2018

IJOART

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Outsourcing is not a new concept, and was researched, practiced and analyzed in different contexts. Outsourcing was first introduced in developed countries in order to use high skilled, low cost labor in developing countries, primarily in areas like manufacturing and IT. As such, the main idea was to optimize cost structures in different industries in the developed countries. This trend changed when outsourcing was starting to pick up momentum in developing countries, and the point of optimizing cost in countries where operational cost is already rock bottom was challenged. The objective of this paper is to analyze the relationship between outsourcing as a concept and cost optimization as an objective for outsourcing. Potential research areas like how outsourcing is applicable for technology related service sectors like telecommunication is also being proposed.

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Outsourcing and industrial decline

Cited by 355 publications

References 0 publications

Outsourcing and financial performance: A negative curvilinear effect

Outsourcing and financial performance: A negative curvilinear effect

Allocation and productivity of time in new ventures of female and male entrepreneurs

A Reality or Myth: Outsourcing for Cost Optimization

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