Outsourcing, organizational competitiveness, and work

Journal of Labor Research

Volumn 18, Issue 4, 1997, Pages 535-549

  Sharpe, Murem ^a  

^a Kelly Services   (United States)

Author keywords

[No Author keywords available]

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EID: 0040238366     PISSN: 01953613     EISSN: None     Source Type: Journal    
DOI: 10.1007/s12122-997-1021-8     Document Type: Article

References (22)

1. See Peter F. Drucker, "The Age of Social Transformation," Atlantic Monthly (April 1994): 53-80.
2. Ibid.
3. James Brian Quinn and Frederick G. Hilmer, "Strategic Outsourcing," Sloan Management Review 35 Summer 1994: 43-55.
4. Ibid.
5. This survey, which covered in-depth telephone interviews with 80 Fortune 500 CEOs and other top executives, was performed by KPMG Business Process Solutions, the outsourcing unit of KPMG Peat Marwick LLP, in the fall of 1996 and announced publicly on October 21, 1996.
6. Projections of growth in outsourcing essentially cover the outsourcing of business services and, thus, do not include the "sourcing" of parts and components by goods manufacturers.
7. The privatizing of public services, from garbage collection to managing a city's zoo, is outsourcing as that term is used in this paper.
8. Part-time and self-employed workers currently account for about 24 percent of all U.S. workers. Since this percentage has barely changed in twenty-five years and, in fact, is currently below peaks reached in the early 1980s, there is little to suggest that these two categories are headed for rapid growth. The two other categories of so-called "contingent" or "peripheral" workers, temporary workers supplied by staffing firms and employees of business services firms, together currently account for nearly 8 percent of all workers. In contrast to part-time and self-employed workers, as a percentage of the labor force, both temporary help and business services employment have been growing rapidly for decades. Temporary help, for example, grew from 0.22 percent of total workers in 1972 to 1.3 percent in 1995, an annualized compound growth rate of more than 12 percent a year. In 1995, average daily employment in the temporary help industry reached 2.2 million, up from 170,800 in 1972. Rapid growth in temporary help and business services is expected to continue, but these two categories combined could not possibly grow fast enough between now and the year 2000 to make good Handy's prediction - unless, of course, outsourcing were to grow much faster than current expectations.
9. Peter F. Drucker, Managing in a Time of Great Change (New York: Truman Talley Books/Dutton, 1995).
10. Quinn and Hilmer, "Strategic Outsourcing." Hilmer is dean of the Australian Graduate School of Management, University of New South Wales.
11. Economic Report of the President, February 1995.
12. See Robert Lawrence and Mark Slaughter, International Trade and American Wages in the 1980s (Washington D.C.: Brookings Institution, 1993). While 1.5 percent of GNP is a small percent of total GNP, it translates into $80 billion of imports that come from countries with substantially lower wage rates than the United States.
13. Drucker, Managing in a Time of Great Change.
14. See Robert Whaples, "Is There Consensus among American Labor Economists?" Journal of Labor Research 17 (Fall 1996): 725-34.
15. See "Proposed Revisions in the Consumer Price Index Will Be Hard to Take by White House, Congress," Wall Street Journal, December 4, 1996.
16. See "Slow Growth and Other Economic Ills," in Growth with Equity: Economic Policymaking for the Next Century, Martin Neil Baily, Gary Burtless and Robert E. Litan, eds. (Washington, D.C.: Brookings Institution, 1993).
17. See "Introduction and Summary," in A Future of Lousy Jobs, Gary Burtless, ed. (Washington, D.C.: Brookings Institution, 1990). In an interview in 1993, Mr. Burtless stated that the gap in income inequality appeared to have stopped growing in the early 1990s.
18. See "Workers of the World Who Need a Job Fast Might Look in Prague," Wall Street Journal, December 2, 1996.
19. The Czech Republic has among the lowest unemployment benefits in the former Soviet Bloc countries, which undoubtedly contributes to low unemployment. In the U.S., states with high unemployment benefits have significantly higher unemployment rates than states with low unemployment benefits.
20. This would be in keeping with "rational expectations" or the new economics which has swept the field of economics in recent years and which won Robert Lucus of the University of Chicago, an early pioneer in rational expectations, the 1994 Nobel prize in economics. A key study by Harvard University economics professor Robert Barro, another pioneer in rational expectations, showed that countries with credible policies for ending hyperinflation quickly regardless of the adjustment costs were indeed able to end it quickly saving their countries the long adjustment period which would have been even more costly, as the fate of countries that took a gradualist approach to ending hyperinflations have shown.
21. This study, done by McKinsey & Company's Amsterdam office in 1986, is cited in The Age of Unreason by Charles Handy (Cambridge, Mass.: Harvard Business School Press, 1990).
22. Textbook-perfect markets are markets in which suppliers are small, numerous, and powerless. Schumpeter also maintained that change itself is a greater barrier to monopoly and market abuses than any law can be. On this point he said: "A shocking suspicion dawns upon us that_big business may have had more to do with creating [a high] standard of living than with keeping it down."