ABSTRACT

Firms are faced with a number of strategic choices. One of the key decisions is whether required components or services are best developed internally or purchased from the market. This ‘make or buy decision’ (Miles and Snow, 1984) has been used to evaluate the relative efficiency of internal and external production, and more recently to consider whether the firm should train and develop its staff or gain the required skills from the external labour market. When firms decide to buy in the required skills they are faced with a further choice: to gain the required skills directly from the external labour market or to outsource that activity to market-based agents.