Using the Concept of Transaction Economics When Considering Outsourcing

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Companies will often undertake outsourcing contracts in order to reduce the overall cost. However, there is the potential for management to overlook the transaction costs, or indirect costs, associated with outsourcing. The writer gives a good overview on the way in which total costs of outsourcing may be compared to providing goods or services in house by looking at more than simply the production costs. Seven sources are cited in the bibliography of this six page paper.