This, in the board’s view, was the only feasible alternative to facilitate its timely transition, expedite revenue inflows and secure competitive advantage — providing an excellent example of how entrepreneurial outsourcing can enable redefining what business an organisation is in, aligned to global business partners/long-term service providers that possess complementary skills. Risk has traditionally been seen as a possibility “bad things happening” and risk-management a mechanism to prevent such threats becoming reality. However, in recent years, this thinking has been changing significantly to recognise the potential opportunities such as the above that risk can present to businesses, enabled by risk-management and governance. Governance involves the top leadership in organisations who are charged with the articulation and oversight of strategy, as a result of which this recognition of the rewards that can potentially accompany the threats has made this subject close to their hearts.
This recent change in mindset around risk and governance has been mirrored by management research, which demonstrates enhanced opportunities for strategic thinking/entrepreneurial behaviour in outsourcing decisions. Murphy, Wu, Welsch, Heiser, & Jiang, (2012) define “entrepreneurial outsourcing” (EO) as the identification and exploitation of previously unexplored opportunities through outsourcing.
Most of the emerging literature on EO has centred on processes, practices, and decisions that have led to the development and delivery of innovative and new products/services through outsourcing (De Pablos, 2013). Won (2015), who attempts to theorise on the influence of entrepreneurship in the determination of insourcing vs. outsourcing decisions, demonstrates how entrepreneurship in sourcing decisions can increase organizational agility and flexibility by outsourcing in an environment of uncertainty. Entrepreneurial thinking also influences the choice of sourcing mechanisms in favour of those aiming to exploit the newly recognized opportunities to create a sustainable competitive advantage that would be challenging for competitors to easily imitate.
In addition to help redefine the business, Vagadia (2012) lists the following fourother pillars of potential competitive advantage through outsourcing in the era of globalization. These have been mapped to specific examples reported by outsourcing practitioners interviewed by the author.
Doctoral research scholar, Aston Business School, UK
