ABSTRACT
In 2000, Samsung Electro-Mechanics (SEM) had to withdraw from its memorandum of understanding with UPS Korea on outsourcing their logistics operation. While promoting the outsourcing contract, the two companies could not come to an agreement regarding the perception of the visible effects of outsourcing; for example, the point in time when profits could be taken, and the method of sharing the profits.1 There were many other reasons for this failure, but the most significant one was probably a lack of lateral thinking and mutual understanding. The employees of SEM considered UPS as a subordinate service provider rather than their strategic partner. Because there was no confidence in each other, the SEM employees refused to cooperate with UPS employees and even resisted the outsourcing policies from the top management. Moreover, the fact that some companies misused outsourcing as a method of restructuring their organisations made the SEM employees afraid of losing their jobs.
