Outsourcing is an option for managing internal tasks. A staffing tool, outsourcing is an arrangement whereby an organization contracts with another organization to perform tasks or functions traditionally handled by internal staff (Boone and Kurtz, 1999).

When an organization decides that more personnel are needed, it must first decide whether to hire more employees, contract workers, or outsource the functions. The focus is on efficiency and cost-effectiveness when deciding whether to outsource. This decision-making process involves internal analysis and evaluation, needs assessment and vendor selection, and implementation and management (Outsourcing Interactive, 1999).

Organizations should remember that outsourcing does not mean abdicating management responsibility. Therefore, companies should

Protestors picket Nike's manufacturing practices of outsourcing.

avoid acting compulsively when deciding on an alternative solution. If the requirements, expectations, and needed resources are not clearly understood, outsourcing does not improve the situation and may even...