IInterests and Power Relations between Outsourcing Partners: a Case Study

Abstract

Outsourcing can be an extremely important strategic decision – for both insourcing and outsourcing companies. It is of utmost importance for any organisation to thoroughly study and analyse possible outcomes, risks and opportunities that outsourcing is likely to bring. Management should not only focus on short-term benefits, but should concentrate on long-term consequences of outsourcing, especially in the light of efficiency and effectiveness of business operations. Our research confirms shortterm, especially financial, benefits of outsourcing. On the other hand, outsourcing can conceal reasons for company’s poor business operations, bad reputation or failure to succeed.These are likely to appear later and can nullify the short term benefits of outsourcing.The research findings represent a suitable starting point for a critical study of benefits of temporally limited outsourcing, both from the point of view of outsourcers and insourcers. The analysis of a sample of Slovenian companies shows that some important issues related to outsourcing should be thoroughly studied before an outsourcing agreement has been signed in order to limit the consequences of unexpected termination of outsourcing relationships.