Current Trends of Outsourcing Practice in Government and Business: Causes, Case Studies and Logic

Summary

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The subject of outsourcing, A-76 studies and strategic sourcing are familiar terms in government and business. What lies behind the development of increasing activity in this area is an organizational field that legitimizes and perpetuates such activities. Justifications are provided in terms of cost savings, improved services and thereby, value to stakeholders. The following article provides examples of "field structuration" that contribute to the perpetuation of these forms of procurement practice. Literature research, interviews and participation as a contracts management professional provided input to the article.

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Extract

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Current Trends of Outsourcing Practice in Government and Business: Causes, Case Studies and Logic

INTRODUCTION

The purpose of this paper is to summarize current trends in outsourcing and reflect upon the recent developments as to causes, sources of promotion of the practice and estimation of what developments the future holds. In order to provide the reader with understanding of the roots of outsourcing, some background in the historical context will be provided. Considerations of the interaction between private industry and governmental entities in the promotion of the concept of outsourcing will be described.

The widespread use and promotion of outsourcing in the government and business sectors has been the subject of much debate over recent years. The proponents of outsourcing claim that it saves money and creates greater efficiencies through streamlining business processes. The critics say that outsourcing costs jobs for American citizens and causes the loss of employee benefits for those allowed to stay in their jobs while employed under the new contractor. The paper seeks to describe the current reasons for undertaking the step to outsource government work through a discussion of policies, published surveys and reported results.

While the origins of outsourcing have their roots in the United States back in the revolutionary war, the government defined and promoted the idea of outsourcing in the federal public sector in 1955 with the A-76 memorandum that stated that the government would utilize the private sector businesses to perform commercial activities.

The theoretical backdrop for understanding the popularity of outsourcing will be the institutional concept of organizational field and domain ...

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