Abstract:

Fears of economic competition in globalization make economies with relatively high labor costs are adversely affected by labour demand shifting towards economies with lower labor costs, thereby reducing job stability and increasing unemployment. One mechanism which is suspected of leading to such an evolution is outsourcing. Generally, outsourcing activities allow organisations to gain some type of a competitive advantage through the sharing of technology, information, or manpower. For example, joint ventures, knowledge transfers, and partnerships through outsourcing have provided many organizations the means to gain some type of competitive advantage in the marketplace (Broedner, Kinkel, & Lay, 2009).