Professional interests and strategic flexibility: a political perspective on organizational contracting

Article Abstract:

Most research on contracting or outsourcing have failed to consider the implications of outsourcing decisions which may be accepted or rejected depending on the interests of particular groups within the organization. A study was thus conducted to examine the interrelationships between professional interests and strategic flexibility. This allows the incorporation of a political perspective into research on organizational contracting, particularly in environments marked by competitive volatility. Data on a panel of 256 hospitals in California were collected from the California Health Facilities Commission annual disclosure survey from 1980 to 1986. Results showed that professional interests have a significant impact on the level of outside contracting. These findings should compel the maintenance of strategic flexibility in highly competitive environments.

Political aspects, Professional workers, Professional employees, Outsourcing, Office politics

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The economic dynamics of work

Article Abstract:

Firms do not have to maintain a rigid production system and a limited product line to compete in a low-cost product environment. The low-cost firm usually enjoys an advantage in lower cost distribution, lower cost or higher quality materials, more service, higher quality design, or some other factor that allows it to maintain its position. It is hard for a firm to mimic a competitor if the competitor has an edge in firm-specific resources and internal standardization that cannot easily be duplicated. The low-cost firm should therefore maintain its competitive advantages while making its production lines and production systems more flexible with automated machines to achieve enhanced economies of scale. This principle also applies to service industry companies.

Methods, Usage, Competition (Economics), Products, Economies of scale

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An economic perspective on escalating commitment

Article Abstract:

The significance of escalating commitment to strategy formulation is discussed. Behavioral explanations of escalating commitment to a losing strategy are examined, and an economic theory of the escalating commitment phenomenon is proposed. Economic justifications for escalating commitment to a failing strategy are shown mathematically. The strategic implications of the escalating commitment phenomenon for the first-move advantage and for heavy industries in the US are discussed.

Policy sciences

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