Understanding Outsourcing: A Theoretical Analysis of its Benefits and Risks to Businesses

Chapter 1
INTRODUCTION
1.1 Background
Resources have long been the major concern of modern companies as they can underpin corporate strategic capability as well as create competences to ensure companies' survival and out-performance among their competitors (Johnson and Scholes, 1999). Due to increasingly fierce competition, allocation and utilization of corporate resources have not only been restricted in-house, but also gone beyond the individual company, which is known as outsourcing (Quinn and Hilmer, 1994; Lonsdale and Cox, 2000).
As a new corporate strategy emerging in the 1970s,…