Outsourcing

CRAIG D. LAIR

Gettysburg College, USA

DOI: 10.1002/9781118989463.wbeccs190

Outsourcing traditionally refers to a process whereby an entity lifts an activity out from its organizational confines and transfers it to a source that is located in the market (e.g., an automaker deciding to transfer the building of its engines to a supplier instead of building this part itself). Often this idea is expressed in terms of the “make” versus “buy” decision: does an entity make the goods and services it needs itself, or does it buy them from others? Thought of in these terms, there can be little doubt that outsourcing is becoming an increasingly popular practice as a variety of entities are buying much of what they used to make. In particular, outsourcing is becoming increasingly prevalent in the realms of business (e.g., companies outsourcing their call center activities), the government (e.g., the use of private prisons and military contractors), and even in individual and family life (e.g., eating out or the use of errand running services): in each of these spheres entities are buying much of what they used to make. In order to get a sense of this phenomenon it is important not only to place outsourcing within a historical context, but also to look at the causes and consequences of outsourcing.

In terms of historical context, outsourcing is not new. Indeed, businesses, governments, and individuals and families all have long histories of buying needed goods and services. For example, ...

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