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HR outsourcing: The impact on HR's strategic role and remaining in-house HR function

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  • Patel, Charmi
  • Budhwar, Pawan
  • Witzemann, Alissa
  • Katou, Anastasia

Abstract

Past research on HR outsourcing (HRO) has offered conflicting views about its impact on HR's strategic position. This study highlights the processes by which decisions to outsource HR are made, followed by the processes implemented post such decisions and their effect on the HR function. Using a case study approach and semi-structured interviews (N=35) within a German subsidiary of a US MNC, we provide a framework of HR processes seeking to achieve standardization in terms of harmonization of HR activities across the subsidiary. The findings reveal that the effects of outsourcing on in-house HR showed a decrease in flexibility of the HR function, a slowdown in processing time of transactional HR as well as a decrease in satisfaction and work intensification for HR managers. Further, it remains questionable as to whether the function of HR was able to enhance its strategic position through outsourcing.

Suggested Citation

  • Patel, Charmi & Budhwar, Pawan & Witzemann, Alissa & Katou, Anastasia, 2019. "HR outsourcing: The impact on HR's strategic role and remaining in-house HR function," Journal of Business Research, Elsevier, vol. 103(C), pages 397-406.
    • Handle: RePEc:eee:jbrese:v:103:y:2019:i:c:p:397-406
    DOI: 10.1016/j.jbusres.2017.11.007
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    References listed on IDEAS

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    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. Howard Gospel & Mari Sako, 2010. "The unbundling of corporate functions: the evolution of shared services and outsourcing in human resource management," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(5), pages 1367-1396, October.
    3. Pereira, Vijay & Anderson, Valerie, 2012. "A longitudinal examination of HRM in a human resources offshoring (HRO) organization operating from India," Journal of World Business, Elsevier, vol. 47(2), pages 223-231.
    4. Divya Christopher & Ankita Tanwar, 2012. "Knowledge Management in Outsourcing Environment: People Empowering People," The IUP Journal of Knowledge Management, IUP Publications, vol. 0(2), pages 61-86, April.
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    Cited by:

    1. Flora Kulembayeva & Aruzhan Seitkaziyeva & Rakymzhan Yelshibayev, 2022. "Economic Efficiency of Outsourcing Business Models: A Comparative Assessment," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(1), pages 75-88, March.

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