Outsourcing Bleg

22 August 2007 at 9:39 am 6 comments

| Peter Klein |

A friend asks for good examples of companies outsourcing core functions or selling core technology and brands. Suggestions?

Entry filed under: - Klein -, Strategic Management, Theory of the Firm.

Knightian Financial Markets Me in Chinese

6 Comments Add your own

  • 1. Graeme Pietersz  |  22 August 2007 at 2:06 pm

    Marconi sold most of its remaining businesses, and the Marconi name, and changed its name to Telent: some time last year, I think.

    I say “remaining” because during the dotcom boom, GEC (the British one!) sold most of its businesses to concentrate on telecoms equipment, and changed its name to Marconi.

    Drug deliver specialist Skyepharma sold its injectables business because it needed cash. It was probably the highest profile of its businesses. What was sold was mostly products, technology.

  • 2. REW  |  24 August 2007 at 10:11 am

    The example I have used in class is Monsanto’s recombinant BST product, Posilac. The manufacturing was outsourced to Sandoz in Austria. FedEx did the logistics, including picking up the used needles from the thousands of sites where the product was administered. The case gets interesting in 2004-2006 with quality problems at the Austrian facility. Monsanto builds a plant in Georgia and ships chemical components to Sandoz for final assembly. This eventually will stop, as well; Monsanto with repatriate manufacturing.

  • 3. JC  |  24 August 2007 at 1:40 pm

    Alas Marconi – a dazzling example of managerial incompetence on which I lost a tidy sum.


  • 4. spostrel  |  27 August 2007 at 7:56 pm

    Boeing has deliberately “hollowed out” its design capabilities, pushing most detailed component design off to its subcontractors while it specializes in systems integration.

  • 5. Kevin Carson  |  30 August 2007 at 1:32 am

    How about Nardelli outsourcing Home Depot’s purchasing functions to India?

  • 6. Chihmao Hsieh  |  31 December 2007 at 9:25 am

    Found this article today on cnn.com about the outsourcing of ‘the process of giving birth’ (to India)… it does have something to do with a company (well, organizations) and it certainly does have something to do with a ‘core function’…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Nicolai J. Foss | home | posts
Peter G. Klein | home | posts
Richard Langlois | home | posts
Lasse B. Lien | home | posts


Former Guests | posts


Recent Posts



Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).

%d bloggers like this: