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Outsourcing: Theory, Literature and Effects
Finance & Accounting
Pages 10 (2510 words)
Outsourcing: Theory, literature, and effects Outsourcing “refers to the practice of a firm entrusting to an external entity the performance of an activity that was performed erstwhile in-house” (Varadarajan 2009, p. 1165). Varadarajan elaborated that “although off-shoring and offshore outsourcing to suppliers have dominated much of the recent discussion and debate on outsourcing in scholarly journals and the business press, the nature and scope of outsourcing that does not transcend national boundaries, and outsourcing to entities other than to suppliers is quite substantial.” In other words, outsourcing may or may not refer to offshoring or offshore outsourcing; further, inshore outs…
Varadarajan 2009, p. 1165-1166). Varadarajan pointed out that other phrases used by firms also imply outsourcing: “externalization of low value added value chain activities in firms, the hallowing of corporations, the transformation of firms into virtual enterprises, and terms such contracting and sub-contracting, also imply outsourcing” (p. 1166). Although one part of the Varadarajan material suggests that outsourcing is a transitional phase, one part recognizes that in some cases, outsourcing is “the only viable” route for the firm (p. 1166). ...
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