A satisficing model of outsourcing

Abstract

Purpose – To develop a prescriptive model that provides effective guidance in the early stages of outsourcing processes, while taking into the decision‐makers' bounded rationality.Design/methodology/approach – Provides an overview of existing prescriptive decision models for outsourcing based on literature review. Contrasts these models with empirical accounts of outsourcing including two case‐studies of outsourcing of logistics activities. Discusses and explains discrepancies from the point of view of literature on bounded rationality and satisficing. Develops a conceptual decision model based on the principles of satisficing.Findings – That there appear to be discrepancies between many of the prescriptive outsourcing models in the literature and the processes observed in practice. That satisficing concept provides a useful explanation of these discrepancies and useful design principles for developing more realistic prescriptive outsourcing decision models.Research limitations/implications – The model de...