In some cases, businesses encounter pressure on operational scenarios where it requires the quality and quantity of personnel to accomplish a specific task or objective. Contracting out is one of the strategies that the organization uses when it does not have sufficient capacity to work and achieve specific goals. The alternative of contracting out plays a significant role in alleviating many operational pressures in the organization and ensure the achievement of set goals and objectives (Hefetz & Warner, 2012). Contracting out over time has developed in many ways, from clerical operational issues to a strategic approach ensuring the organizations perform and achieve their set goals.
Previously, the primary goal of contracting out was to ensure that the work is complete. Currently, managers have realized that the procedure can be of more benefit than just completing the work. Contracting out assists the organization in meeting both short and long-term expectations. Today, many organizations put their employees in strategic positions that allow them to learn and gain experience from the external sources enabling them to be self-dependent in the future (Kolpakov & Anguelov, 2018). Ensuring that employees gain knowledge from contracted professionals means that they will do their work without seeking support and paying external sources (Davison & Sebastian, 2009). The process of becoming self-dependent increases the company's profits or productivity because they don't have to pay professionals.
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It is also important to note that currently, companies contact out to ensure work done, but they do it as a strategic way of creating business links and networks for business partnerships (Ebbers, 2014). Contracting out is among the means of opening doors to build partnerships with the contracted company and other partners associated with the organization providing contractual service. The process aims to improve the companies' performance because the contractor can align the business with other expert companies or professionals that will significantly boost the company's performance (Chanson & Quelin, 2013). Therefore, it is evident that contracting out has evolved from just ensuring work done in companies to a strategic approach that will provide its current and future performance.
References
Chanson, G., & Quelin, B. V. (2013). Decentralization and contracting out: A new pattern for internal and external boundaries of the firm. European Management Journal, 31(6) , 602-612.
Davison, B., & Sebastian, R. J. (2009). The relationship between contract administration problems and contract type. Journal of Public Procurement, 9(2) , 262-286.
Ebbers, J. J. (2014). Networking behavior and contracting relationships among entrepreneurs in business incubators. Entrepreneurship Theory and Practice, 38(5) , 1-23.
Hefetz, A., & Warner, M. E. (2012). Contracting or public delivery? The importance of service, market, and management characteristics. Journal of public administration research and theory, 22(2) , 289-317.
Kolpakov, A., & Anguelov, L. G. (2018). Decision-making approaches to contracting out. Journal of Strategic Contracting and Negotiation, 4(3) , 148-166.
