| Sumario: | Part of a special section on outsourcing, union survival, and management rights. The popular use of outsourcing as a shorthand description of corporate efforts to locate cheap labor is overly simplistic and inaccurate: Several factors contribute to the increasing tendency for firms to define the boundary between production inside and outside the firm differently, in the process moving toward greater outsourcing. A rethinking of sourcing decisions has been promoted by the information technology revolution, the pursuit of risk-sharing arrangements, greater concentration on core corporate competencies, and global opportunities and challenges. The information technology revolution will prove to be the most influential of these forces. Details of this set of interrelated factors, the very limited recent empirical work regarding the reasons for outsourcing, and the possible impact of outsourcing on wages are provided.
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