Bringing Together Strategic Outsourcing and Corporate Strategy : Outsourcing Motives and Risks

Abstract : The authors report the results of a study on the motives of corporate headquarters in large European manufacturing firms for engaging in outsourcing and the risks they perceive to be associated with strategic outsourcing operations. Four main issues can be highlighted: preoccupations about core businesses and reduction of cost of capital are linked; access to external expertise and quality improvements are specific expectations for outsourcing firms; operational cost savings, still a predominant concern, must be balanced with the cost of monitoring suppliers; the ‘increased flexibility' objective emerges as a distinct issue