On Outsourcing: An Integrated Framework on Process Phases, Core Know‐How Retention, and Organizational Knowledge Transformation

Outsourcing has emerged as a strategic approach that allows organizations to improve efficiency, access specialized expertise, and focus on their core business functions. However, these benefits come with significant risks, particularly the potential erosion of internal organizational knowledge and core competencies that are central to a firm's competitive advantage. This article synthesizes literature on outsourcing processes, core competence theory, dynamic capabilities, and knowledge management to propose a comprehensive integrated framework spanning the entire lifecycle of outsourcing arrangements. The framework encompasses four critical phases that are strategic preparation, vendor selection and contracting, transition and integration, and post-transition governance, with particular emphasis on protecting and reinforcing internal knowledge resources. Drawing on empirical evidence and theoretical contributions from leading scholars in the field, we demonstrate how firms can effectively balance outsourcing efficiencies with the imperative to retain essential know-how. The article concludes with theoretical contributions, managerial implications, and directions for future research, providing both scholars and practitioners with a robust model for preserving critical organizational knowledge while capitalizing on external efficiencies.