Outsourcing Failure and Reintegration: Beyond Contractual Approaches

Sandro Cabral (Fed. U. of Bahia)
Valmir Maia (Fed. U. of Bahia)

Abstract: This paper discusses the possible reasons that drive organizations to interrupt outsourcing and then to reintegrate activities formerly delegated to third parties. Contractual approaches offer some plausible explanations for reintegration originating from outsourcing failure. These explanations are related to asset specificity, poor contractual design and deficient monitoring. Although the examination of a real case of outsourcing interruption in industrial maintenance confirms these factors, other explanations can be added. Bandwagon behavior and isomorphic pressures exerted by external actors may also explain why some organizations reintegrate.

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