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The impact of corporate outsourcing on company value

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  • Bryce, David J.
  • Useem, Michael

Abstract

Companies worldwide are expanding their use of outsourcing for services and products. This article appraises what is known about the impact of outsourcing on company value, and the emergent picture is not an unblemished one. Company managers frequently complain about the downsides, some companies have retrieved what they had sourced out, failures can be seen here and there, and the long-term potential consequences of outsourcing too much are yet to be seen. Still, the weight of the research evidence indicates that, when well designed and well managed, outsourcing reduces operating cost, enhances competitive strategy, and enlarges shareholder value.

Suggested Citation

  • Bryce, David J. & Useem, Michael, 1998. "The impact of corporate outsourcing on company value," European Management Journal, Elsevier, vol. 16(6), pages 635-643, December.
    • Handle: RePEc:eee:eurman:v:16:y:1998:i:6:p:635-643
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    Cited by:

    1. Mukherjee, Debmalya & Gaur, Ajai S. & Datta, Avimanyu, 2013. "Creating value through offshore outsourcing: An integrative framework," Journal of International Management, Elsevier, vol. 19(4), pages 377-389.
    2. Müller, Hans-Erich, 2009. "Autozulieferer: Partner auch in der Krise? Lieferantenmanagement bei Toyota, General Motors und Volkswagen," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 127, number 230, June.
    3. MahmudulHasan Foiji & Md. Anamul Hoque & Muhammad Belal Hossain Khan, 2019. "Strategic Potential of e-HRM in Outsourcing HR Functions," International Journal of Business and Social Research, LAR Center Press, vol. 9(2), pages 1-10, February.
    4. Debarati Ghosh & Meghna Dutta, 2023. "Credit Constraints and Increased Firm-Level Production Fragmentation: Evidence from India," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 15(1), pages 93-108, January.
    5. Mol, Michael J. & Pauwels, Pieter & Matthyssens, Paul & Quintens, Lieven, 2004. "A technological contingency perspective on the depth and scope of international outsourcing," Journal of International Management, Elsevier, vol. 10(2), pages 287-305.
    6. Rybak, Aurelia & Rybak, Aleksandra, 2016. "Possible strategies for hard coal mining in Poland as a result of production function analysis," Resources Policy, Elsevier, vol. 50(C), pages 27-33.
    7. Raassens, Néomie & Wuyts, Stefan & Geyskens, Inge, 2014. "The performance implications of outsourcing customer support to service providers in emerging versus established economies," International Journal of Research in Marketing, Elsevier, vol. 31(3), pages 280-292.
    8. Y. Boulaksil & J. C. Fransoo & T. Tan, 2017. "Capacity reservation and utilization for a manufacturer with uncertain capacity and demand," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(3), pages 689-709, July.
    9. Kedia, Ben L. & Lahiri, Somnath, 2007. "International outsourcing of services: A partnership model," Journal of International Management, Elsevier, vol. 13(1), pages 22-37, March.
    10. Freytag, Per V. & Clarke, Ann H. & Evald, Majbritt R., 2012. "Reconsidering outsourcing solutions," European Management Journal, Elsevier, vol. 30(2), pages 99-110.
    11. Ana Redondo-Cano & M. Canet-Giner, 2010. "Outsourcing agrochemical services: economic or strategic logic?," Service Business, Springer;Pan-Pacific Business Association, vol. 4(3), pages 237-252, December.
    12. Pei†Cheng Liao & Suresh Radhakrishnan, 2013. "A Commitment†Based Explanation for Outsourcing Multiple Tasks," Contemporary Accounting Research, John Wiley & Sons, vol. 30(3), pages 1063-1081, September.
    13. Choi, Jongmoo Jay & Ju, Ming & Trigeorgis, Lenos & Zhang, Xiaotian Tina, 2021. "Outsourcing flexibility under financial constraints," Journal of Corporate Finance, Elsevier, vol. 67(C).
    14. Sandeep Rustagi & William R. King & Laurie J. Kirsch, 2008. "Predictors of Formal Control Usage in IT Outsourcing Partnerships," Information Systems Research, INFORMS, vol. 19(2), pages 126-143, June.
    15. Cooper, Robin & Slagmulder, Regine, 2004. "Interorganizational cost management and relational context," Accounting, Organizations and Society, Elsevier, vol. 29(1), pages 1-26, January.
    16. Müller, Hans-Erich, 2009. "Autozulieferer: Partner auch in der Krise? Lieferantenmanagement bei Toyota, General Motors und Volkswagen," EconStor Books, ZBW - Leibniz Information Centre for Economics, volume 127, number 109734, July.
    17. Steven Globerman & Aidan Vining, 2004. "The Outsourcing Decision: A Strategic Framework," International Trade 0404007, University Library of Munich, Germany.
    18. Barbara Bradaè Hojnik, 2010. "Correlation Between Reasons And Effects Of Outsourcing: Evidence From Slovenian Sme’S," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 57, pages 313-324, november.
    19. Gonzalez, Reyes & Gasco, Jose & Llopis, Juan, 2005. "Information systems outsourcing reasons in the largest Spanish firms," International Journal of Information Management, Elsevier, vol. 25(2), pages 117-136.
    20. Hammerling, Jessie HF, 2022. "Financial Drivers of Domestic Outsourcing: Case Study of Food Services in the San Francisco Bay Area," Institute for Research on Labor and Employment, Working Paper Series qt9sz919zw, Institute of Industrial Relations, UC Berkeley.
    21. MahmudulHasan Foiji & Md. Anamul Hoque & Muhammad Belal Hossain Khan, 2019. "Strategic Potential of e-HRM in Outsourcing HR Functions," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 9(2), pages 1-10, February.

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