School of Business

Outsourcing and the Personnel Paradox

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Description: A frequent question faced by all kinds of firms and organizations is "buy or build." In other words, keep an activity in-house or outsource it. Outsourcing is often more efficient. Firms with many outsourced relationships with subcontractors or independent contractors are nicknamed "hubs," since they remain at the center and outsourcers are the spokes. Now, however, various court cases have reduced the potential attractiveness of outsourcing if the hub is perceived as exercising too much financial, behavioral, or even apparent control over the outsourcer. Firms can take steps to avoid these pitfalls and still enjoy the benefits of outsourcing.
Language: English
Format: Article