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Information Resources Management Association
Advancing the Concepts & Practices of Information Resources Management in Modern Organizations

The Implication of Outsourcing Practices for Knowledge Management

The Implication of Outsourcing Practices for Knowledge Management
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Author(s): Sardari Ahmad (Shahed University, India)
Copyright: 2007
Pages: 4
Source title: Managing Worldwide Operations and Communications with Information Technology
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-59904-929-8.ch400
ISBN13: 9781599049298
EISBN13: 9781466665378


It is the aim of this paper to explore the nature of outsourcing and subcontracting practices and to identify the effects of using such policies for the accumulation and maintenance of knowledge in organizations. using evidence from, a case study research, conducted in three (3) medium size Tools industries, this study examines how outsourcing and subcontracting policies are set in practice and how the formation of such contractual inter-organizational relations affect the organizations as learning and knowledge entities) While it is argued that knowledge sharing between organizations requires mutual collaboration but also the construction of social environment, which promotes communication and sharing of cultures, it is shown in the research that contractors were not actually willing to share their expertise and their know-how. Additionally, the outsourcing of operations has affected the formation of people’s identities in the organization and the will and ability of employees and managers to participate to the company’s processes. It is therefore argued that outsourcing has reduced the absorptive capacity and the intellectual capital of the organization and has produced secondary negative effects such is organizational dependency from contractors and loss of the organization’s ability to control and initiate innovation. The paper summarizes the findings within a model of ’vicious cycle’ and suggests that outsourcing eventually leads to the addiction of .the organization to ’buy’ expertise and knowledge, in order to fulfill short-term goals, instead of trying to acquire or create new knowledge.

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