Monday, June 14, 2004
Aarrrrgh. Here's yet another article about outsourcing - this time, a roundtable of (rather respectable) b-school profs including D'Aveni and Rajan.
Look, by now, we've had a very, VERY nice example of the problems with 'outsourcing': Iraq (and Abu Ghraib). It should be patently obvious that outsourcing, far from being a radical cost reducer, can absolutely demolish an organization's social capital - and thus create (all sorts of) massive hidden costs: via reputational effects, unintended consequences to organization structures, lines of power, erosion of control, etc.
So what these guys are discussing, unfortunately, has little to do with reality.