ABSTRACT
Over the past 15 years or so, outsourcing has become an increasingly prominent feature of the business environment. Whole business functions have been transferred to third-party suppliers, some of them integral to the performance of the organization, like information technology, logistics, manufacturing and procurement. During this time of change, managers have had at their disposal much advice to help them manage the potential supply risks arising out of outsourcing. Out of all this advice, three broad theoretical decision-making models that have dominated the scene can be identified. These are referred to in this chapter as the strategic partnership model, the balanced contracting model and the asymmetric power model. This chapter reviews each of these three models, discussing their implications for outsourcing practice in detail.
