IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Outsourcing Strategies. How To Formalize And Negotiate The Outsourcing Contract

  • Pellicelli Michela


    (University of Pavia, Economics)

  • Meo Colombo Carlotta


    (University of Pavia, Economics)

In the globalized economy multinational firms have given rise to local firms able to produce at a low cost and at acceptable quality levels. A growing number of firms have outsourced production and manufacturing activities of all types to these firms, not only to reduce production costs but also to make their organizational structures more streamlined and flexible. Outsourcing decisions, which originally were limited to production which had a modest technological content and was of marginal importance for the business in question, is increasingly adopted for activities which, requiring core competencies or belonging to the core business, were considered inseparable from the organization and thus not outsourceable. Gradually an outsourcing strategy has developed which has found it convenient to outsource even core competencies and functions, such as specialized manufacturing, which require a particular technology, marketing, product design, and the search for know-how (Prahalad and Hamel 1990: 79-91).\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\r\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\nSuch an outsourcing strategy has a number of advantages, among which quality improvement, a greater focus on managing other core competencies, a greater flexibility and leverage regarding resources, along with the possibility of entering new markets, even ones with a high rate of development.\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\r\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\nThis article analyzes the fundamental stages for an outsourcing strategy. It will demonstrate how, in order to achieve an outsourcing strategy, it is necessary to include outsourcing in the general strategy, gather suitable information for choosing the outsourcer, negotiate the contract with the supplier, choose the type of relationship to have with the supplier, and, finally, plan the transfer of activities and functions from the outsourcee to one or more outsourcers or providers.\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\r\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\n

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by University of Oradea, Faculty of Economics in its journal The Journal of the Faculty of Economics - Economic.

Volume (Year): 1 (2011)
Issue (Month): 1 (July)
Pages: 276-287

in new window

Handle: RePEc:ora:journl:v:1:y:2011:i:1:p:276-287
Contact details of provider: Postal: Universitatii str. 1, Office F209, 410087 Oradea, Bihor
Phone: +40259408799
Fax: 004 0259 408409
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ora:journl:v:1:y:2011:i:1:p:276-287. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catalin ZMOLE)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.