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Outsourcing and industrial decline

Published on Feb 1, 1992in The Executive
· DOI :10.5465/AME.1992.4274298
Richard A. Bettis29
Estimated H-index: 29
(SMU: Southern Methodist University),
Stephen P. Bradley14
Estimated H-index: 14
(Harvard University),
Gary Hamel24
Estimated H-index: 24
(LBS: London Business School)
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Abstract
Executive Overview The improper use of outsourcing is playing an important role in the continuing competitive decline of many Western firms. Western managers often view outsourcing as a defensive operational measure. The approach tends to be incremental. A whole series of incremental outsourcing decisions, taken individually, may make economic sense, but collectively they may also represent the surrender of the business's capability to compete. However, properly understood and managed as an overall part of strategy, outsourcing can aid competitiveness. This article, based on the authors' research with firms in North America. Europe, and Asia, discusses the manner in which the improper use of outsourcing can destroy the future of a business, and how the proper use of outsourcing can help build competitive advantage.
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