Unlocking the business outsourcing process model

Abstract

Outsourcing has emerged as a prevalent business practice that is having a transformational impact on how many organizations manage their global supply chains. Despite this prominence, anecdotal reports from multiple reputable organizations suggest that many businesses fail to realize the benefits anticipated from their outsourcing initiatives. Motivated by these observations, this study investigates those management practices during the outsourcing process that are key drivers of outsourcing performance. Specifically, detailed data from 198 sourcing executives and managers responsible for outsourcing initiatives are used to investigate the influence that strategic evaluation, contractual completeness, and relationship management practices have on achieving projected outsourcing results. The results offer strong empirical evidence that outsourcing performance is significantly influenced by extensive strategic evaluation and proactive relationship management practices. Moreover, the impact strategic evaluation has on outsourcing performance is not direct, but rather is partially mediated by the relationship between the parties. Finally, the results show that contractual completeness does not distinguish between successful and unsuccessful outsourcing efforts, and can be considered qualifying activity.

Examining Managerial Preferences and Choices: The Role of Value Creation and Value Appropriation Drivers in Strategic Outsourcing

“…"To"avoid,"or"at"least"mitigate,"these"risks,"firms"need"mechanisms"to"protect"the" potential" values" and" manage" risks" that" might" arise" in" an" engagement." One" such" widely" discussed" mechanism" is" the" degree" to" which" corporations" can" draw" up" reasonably" efficient" outsourcing" contracts" (Barthelemy,"2003;"Cao"and"Lumineau,"2015;"Gopal"et"al.,"2003;"Handley"and"Benton,"2009;" Harris"et"al.,"1998;"Lumineau"and"Quélin,"2012;"Mayer"and"Argyres,"2004;"Saunders"et"al.,"1997)"that" aid"in"governing" the" relationship"with"its"outsourcing"provider," and"ensure"that"value"created"in"the" 9" relationship" can" be" effectively" captured." We," hence," argue" that" an" outsourcing" firm's" capability" to" appropriate"value"from"an"outsourcing"relationship" has"a"positive"effect"on"its" choice"of"outsourcing" options.…”

What makes outsourcing effective? A transaction-cost economics analysis

“…The contract is the foundation for the overall business transaction and it provides formal control of the interactions between the buyer and the supplier regarding their responsibilities and behaviors (Jiang et al 2008, Yao et al 2010. Nonetheless, for various reasons, such as technology and market uncertainties, not all aspects of an inter-organizational transaction are likely to be completely detailed by the contract (Handley and Benton 2009). Consequently, additional control mechanism such as relational adaptation (buyer-supplier collaboration, joint problem solving, and information sharing) becomes necessary for settling contractual disputes and safeguarding completion of transactions (Narasimhan et al 2010, Peterson et al 2002, van Hoek 2000.…”

Framework built on resource based view for outsourcing strategy on hiring logistics service provider

“…Iañez & Cunha (2006) presented the activities to carry out the risk analysis on the real logistics needs of the contracting company. Handley & Benton (2009) developed a framework to select an LSP that offers the lowest risk and accepts the implementation of performance indicators. Serrato et al (2007) and Kumar et al (2013) presented a way of analyzing operational costs by identifying core capabilities and competences.…”