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Outsourcing and the Search for `Flexibility'

Author

Listed:
  • Bennett Harrison

    (H. John Heinz III School of Public Policy and Management at Carnegie Mellon University)

  • Maryellen R. Kelley

    (H. John Heinz III School of Public Policy and Management at Carnegie Mellon University)

Abstract

Organizational restructuring during the 1980s consisted in part of efforts by large and small firms alike to achieve functional, wage or numerical `flexibility' in their relationships with employees. The practice of contracting-out, or `outsourcing' work which might otherwise have been performed `in-house', is one aspect of numerical flexibility. From analysis of a nationally representative sample of production managers in one thousand manufacturing establishments in the US, conducted in 1986-87, we find that management's motivation for engaging in this practice is multi-dimensional. The relatively high cost of labour is only one among several factors favouring the use of subcontracting. In addition, a significant fraction of manufacturing outsourcing is motivated by managers' desire to access specialized assets - such as tooling and skilled labour - that are available only (or most expeditiously) by `going outside'. Greater scope (product diversity) at the level of the production process and size (as a proxy for resourcefulness) at the firm level increase the likelihood that managers will outsource production.

Suggested Citation

  • Bennett Harrison & Maryellen R. Kelley, 1993. "Outsourcing and the Search for `Flexibility'," Work, Employment & Society, British Sociological Association, vol. 7(2), pages 213-235, June.
    • Handle: RePEc:sae:woemps:v:7:y:1993:i:2:p:213-235
    DOI: 10.1177/095001709372003
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    References listed on IDEAS

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    Cited by:

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    2. Fomba Kamga, Benjamin, 2011. "Labour Contracts and Performance of Cameroonian Firms," IZA Discussion Papers 6211, Institute of Labor Economics (IZA).
    3. Geneviève Nguyen & Julien Brailly & François Purseigle, 2020. "Strategic outsourcing and precision agriculture: towards a silent reorganization of agricultural production in France ?," Post-Print hal-02942720, HAL.
    4. Maike Scherrer-Rathje & Patricia Deflorin & Gopesh Anand, 2010. "Outsourcing and its Impact on Manufacturing Flexibility: Contingencies Matter," Working Papers 0125, University of Zurich, Institute for Strategy and Business Economics (ISU).
    5. Simon C. Parker, 2010. "Contracting Out, Public Policy And Entrepreneurship," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(2), pages 119-144, May.
    6. Climent Serrano, S., 2004. "Utilización y conocimiento de la herramientas de medición y su relación con los costes de calidad en las empresas certificadas en la norma ISO 9000 de la Comunidad Valenciana/Use and Knowledge of the ," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 22, pages 369-389, Agosto.
    7. William MILBERG, 2004. "The changing structure of trade linked to global production systems: What are the policy implications?," International Labour Review, International Labour Organization, vol. 143(1-2), pages 45-90, March.
    8. Milberg, William S.,, 2004. "The changing structure of international trade linked to global production systems : what are the policy implications?," ILO Working Papers 993701203402676, International Labour Organization.
    9. George, Elizabeth. & Chattopadhyay, Prithviraj., 2015. "Non-standard work and workers : organizational implications," ILO Working Papers 994883083402676, International Labour Organization.
    10. Elizabeth George & Prithviraj Chattopadhyay & Lida L. Zhang, 2012. "Helping Hand or Competition? The Moderating Influence of Perceived Upward Mobility on the Relationship Between Blended Workgroups and Employee Attitudes and Behaviors," Organization Science, INFORMS, vol. 23(2), pages 355-372, April.
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    12. Shin, Dongsoo & Yun, Sungho, 2004. "Choice of technology in outsourcing: an endogenous information structure," Information Economics and Policy, Elsevier, vol. 16(2), pages 165-178, June.
    13. Dongsoo Shin & Sungho Yun, 2008. "Informed principal and information gathering agent," Review of Economic Design, Springer;Society for Economic Design, vol. 12(4), pages 229-244, December.

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