Outsourcing Dilemma: The Search for Competitiveness, The

The development of outsourcing

In the 1990s, some management theorists argued that the important factor in maintaining competitiveness was differentiating between core and non-core functions and then transferring all non-core functions to a specialist in that function. This was not a particularly new idea but it was certainly one ’whose time had come’. As discussions on the subject increased and evolved, the concept of the virtual organization was born. The theory behind the virtual organization is that any function that is not core should be transferred to an external specialist in that function. In addition, however, it argues that there are bound to be organizations that will perform your core functions better than you do – so why not transfer ...