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Introduction
Outsourcing is a common practice among both private and public organizations and is a major element in business strategy. Perhaps most organizations now outsource some of the functions they used to perform themselves. Due to widespread outsourcing practices, it has become a frequent topic in the literature. Numerous reasons why outsourcing is initiated have been identified by researchers. Organizations may expect to achieve many different benefits through successful outsourcing, although there are significant risks that may be realized if outsourcing is not successful. There is an abundance of outsourcing literature where many benefits, risks, motivators, and decision factors have been presented although the relationships, commonalities and disparity among the contents of these studies have not been investigated.
The purpose of this study is twofold. First we review the outsourcing literature with the objective of identifying those references that may provide guidance for managers and researchers. The review of the literature is organized based on the outsourcing decision framework given in Figure 1 [Figure omitted. See Article Image.] ([105] Kremic and Tukel, 2003). The figure depicts the typical elements of the outsourcing decision and shows where the motivators, benefits, risks, and factors are typically encountered in such decisions.
Second, the studies in the literature are analyzed based on their content. The aim is to categorize and identify relationships among the studies which are not apparent when the studies are considered individually. The topics discussed in the studies are described by a set of variables and then statistical procedures are applied. The intention here is to identify which topics are commonly discussed together as well as the combinations which seldom appear. In addition, we attempt to form groupings of the studies based on their content, with the objective of identifying areas that need exploration.
The organization of the paper is as follows. We first review the reasons that outsourcing is initiated. What are the outsourcing motivators that are identified in literature? This question is addressed in the second section and may help managers determine if outsourcing is an appropriate option in their situation. The next sections are devoted to identifying the benefits and risks that are commonly expected with outsourcing. A detailed discussion on factors which may impact outsourcing decisions is also provided and followed by...