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Paper info: Efficiency-seeking or recipe-following? The case of outsourcing


Efficiency-seeking or recipe-following? The case of outsourcing


Lars-Erik Gadde
Chalmers University of Technology
Lars-Erik Gadde

Place of Publication

The paper was published at the 25th IMP-conference in Marseille, France in 2009.


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This paper examines outsourcing as a contemporary example of "best practice" to examine the relationship between historical narratives, managerial actions and management theories. We argue mangers are neither ruthless efficiency seekers, as Chandlerian business history would have us believe, nor blind followers of fads and fashions as proposed by neo-institutional approaches. We argue instead that there is a strong interplay between efficiency seeking criteria and business recipes, understood as institutionalized rules on managing businesses, measuring performance and so on. We argue that outsourcing can be regarded as both a measure to increase efficiency, namely through increasing specialization and external economies of scale, as well as a managerial fashion who has led many businesses to embrace it but with fairly disappointing results. We use the industrial networks model of actors, resources and activities to explain how outsourcing can be overexploited, particularly in its latest offshoring incarnation, and induce tensions between the early and latter waves of outsourcing. We conclude our paper with a discussion of the relationship between historical narratives on the evolution of the business environment and management theories, and the need for a heightened awareness on how they influence each other.