Outsourcing and the Risks of Dependent Autonomy

Abstract

Outsourcing affords those who engage in it a type of autonomy, albeit a highly dependent, and thus risky, one. The autonomy associated with outsourcing comes from how it allows entities to pursue their activities in a more self-directed manner (e.g., it gives entities greater control over what activities they perform as well as how they are performed). However, this autonomy is only made possible by an entity becoming dependent on those who take over its outsourced activities. In other words, it is only by becoming dependent on others that outsourcing frees entities to peruse their activities in a more self-direct manner. Recognizing the dependent nature of the autonomy associated with outsourcing is important because of the risks it poses both to the entity engaging in outsourcing and to some broader social concerns. This article focuses on three such risks: how this autonomy is dependent on the availability of suppliers willing and able to take on one’s outsourced affairs; how this kind of dependency can lead to a loss of an entity’s internal capabilities; and how an entity can inadvertently outsource, and thus lose control over, its core activities. Given that the dependence inherent in outsourcing relationships is the source of so many of outsourcing’s benefits as well as its risks, this article highlights the highly precarious nature of this dependent form of autonomy.