The Innovative Organization: Creating Value Through Outsourcing

by Steven Tadelis

Fall 2007

Volume 50
Issue 1

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Few recent business trends have received as much attention as the practices of outsourcing and offshoring. Many cases of failed outsourcing contracts suggest that the strategic use of outsourcing may not be as beneficial as some believed, and hidden costs are often cited as a main source of failure. A business leader can successfully innovate the sourcing practices of his organization by employing strategic frameworks that will anticipate the hidden costs of outsourcing. This article offers such a framework, and argues for its wide use.

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