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Making the HR Outsourcing Decision

Published on Apr 9, 2007in Sloan Management Review
Paul S. Adler42
Estimated H-index: 42
(University of Manchester)
Abstract
Outsourcing has become increasingly attractive for many organizations. Much attention has focused recently on the outsourcing of staffing. A much less noticed, though growing, business has been that for human-resources business-process outsourcing, or HR-BPO. Some observers see outsourcing as a key trend shaping the future of HR. outsourcing any business activity creates potential risks as well as benefits. This article synthesizes the strongest of the available research and identifies the six key factors that companies should consider when making important outsourcing decisions: 1. dependency risks, 2. spillover risks, 3. trust, 4. relative proficiency, 5. strategic capabilities, and 6. commitment versus flexibility. The six factors of outsourcing were major considerations in a landmark outsourcing deal that BP signed with Exult Inc. in December 1999.
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  • Citations (125)
References1
Newest
Published on Apr 1, 2000in Journal of Economic Behavior and Organization1.40
Kendall W. Artz11
Estimated H-index: 11
(Baylor University),
Thomas H. Brush15
Estimated H-index: 15
(SPbU: Saint Petersburg State University)
The paper draws on transaction cost and relational exchange theories to develop a model of the determinants of coordination costs in a collaborative contractual alliance. While some empirical research has examined certain dimensions of alliance performance, almost no studies have attempted to evaluate alliance performance by directly examining exchange costs. Data examining 393 original equipment manufacturer (OEM) supplier relationships that are governed by relational contracts found support fo...
Cited By125
Newest
Sun Young Sung8
Estimated H-index: 8
(NU: Nanjing University),
Jin Nam Choi30
Estimated H-index: 30
(SNU: Seoul National University)
AbstractThis study draws on the literature on strategic choice theory and training and development (T&D) to explore the theoretical mechanisms that explain the strategic decisions of top management, thereby leading to the T&D investment of firms. The current theoretical framework was examined using cross-lagged data collected from 163 Korean manufacturing companies at three time points over a five-year period. Results confirmed that firm performance and environmental change exert significant eff...
Published on Feb 12, 2018in Journal of Organizational Change Management1.19
Deepa Mishra6
Estimated H-index: 6
(IITK: Indian Institute of Technology Kanpur),
Sameer Kumar33
Estimated H-index: 33
(University of St. Thomas (Minnesota))
+ 1 AuthorsRameshwar Dubey26
Estimated H-index: 26
Purpose Although there is a growing body of literature on human resource (HR) outsourcing, there are still unresolved issues regarding the level of outsourcing HR activities initiated in firms having different strategies and structures. This is relevant to examine because firms with different orientations (strategy and structure) cannot do HR outsourcing at the same level. The paper aims to discuss these issues. Design/methodology/approach A theoretical framework is developed and empirically val...
Published on Jan 15, 2018
To sustain competitive advantage, nowadays more than ever, outsourcing is crucially important for international and domestic firms. However, making the right outsourcing decision is not a just a simple multiple-factors decision making problem.
Published on Jan 1, 2018
Margret Borchert3
Estimated H-index: 3
,
Katharina Schmidt + 1 AuthorsNadine Wallscheid
Positioniert sich der Automobilhandel im Kontext der Elektromobilitat als ganzheitlicher Losungsanbieter, erfordert dies ein geeignetes Konzept fur das Personalmanagement. In diesem Beitrag wird untersucht, welche Rolle das Personalmanagement im Automobilhandel im Kontext der Elektromobilitat einnimmt und wie das Personalmanagement im Hinblick auf diese Herausforderung zu gestalten ist. Aufbauend auf einem neu entwickelten Erklarungsmodell werden eigene empirische Forschungsergebnisse vorgestell...
Published on Nov 1, 2017in Journal of Business Research4.03
Charmi Patel4
Estimated H-index: 4
(University of Reading),
Pawan Budhwar46
Estimated H-index: 46
(Aston University)
+ 1 AuthorsAnastasia A. Katou13
Estimated H-index: 13
(UoM: University of Macedonia)
Past research on HR outsourcing (HRO) has offered conflicting views about its impact on HR's strategic position. This study highlights the processes by which decisions to outsource HR are made, followed by the processes implemented post such decisions and their effect on the HR function. Using a case study approach and semi-structured interviews (N = 35) within a German subsidiary of a US MNC, we provide a framework of HR processes seeking to achieve standardization in terms of harmonization of ...
Published on Sep 18, 2017in Management Decision1.96
Thuy Thi Thanh Nguyen , Man-Ling Chang1
Estimated H-index: 1
Purpose The causal conditions leading to successful human resources outsourcing (HRO) have until now attracted only limited research attention. To address this shortcoming, the purpose of this paper is to investigate how a firm and a HR provider should work together to ensure successful HRO. Design/methodology/approach By applying a fuzzy-set qualitative comparative analysis, the authors demonstrate how combining in different ways provider quality, business understanding, trust, and closed HRO n...
Published on Jun 5, 2017in Personnel Review1.36
Thuy Thi Thanh Nguyen1
Estimated H-index: 1
,
Man-Ling Chang1
Estimated H-index: 1
Purpose The purpose of this paper is to explore the antecedents of the decision of whether to outsource human resources (HR). Two moderators are considered: the lack of in-house HR expertise and positive HR outcome. Design/methodology/approach This study uses data collected from 85 Vietnamese firms of different sizes. Regression analysis is used to examine the research hypotheses. Findings The strategic involvement of HR management is positively related to the decision to outsource HR. As expect...
Hasan Gilani3
Estimated H-index: 3
,
Shabana Jamshed1
Estimated H-index: 1
(Glyndŵr University)
Purpose This paper aims to focus on “Recruitment Process Outsourcing” (RPO) as a key element of improvement in corporate brand of organisation through using the talent and capabilities of employees. This research explores the linkages and interconnection between the concepts of RPO and its contribution towards the employer branding process. The review of the literature on RPO and employer branding identifies an emergence of conceptual framework based around outsourcing effectiveness and its impa...
Janet H. Marler15
Estimated H-index: 15
(SUNY: State University of New York System),
Emma Parry15
Estimated H-index: 15
(Cranfield University)
Associated with the emergence of internet-based human resource management technology is rhetoric predicting that such technological advances (electronic human resource management technology or e-HRM) will make HRM in organizations more strategic. Yet such a prediction is contested in the literature on the role of technology in organizations. Using a large survey data-set consisting of 5665 companies that are located in 32 different countries, we use non-recursive simultaneous equation models wit...
View next paperOutsourcing HR: The Impact of Organizational Characteristics