The hidden cost of politics in Australian public sector outsourcing decisions

Jayne Bisman

    Research output: Book chapter/Published conference paperConference paperpeer-review

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    Abstract

    The increasing propensity of Australian public sector organisations (PSOs) to engage in outsourcing is promoted by public sector reforms and government policy which foreground outsourcing as a means for reducing costs. These reforms and policies are consistent with the theory of Transaction Cost Economics (TCE); the conventional, explanatory framework applied to outsourcing, which suggests that in reference to production (purchase) costs plus agency/transaction costs, where the market is cheaper, outsourcing is preferred to in-house production or provision (insourcing). A broad-based, multiple methods study was conducted to investigate how and why outsourcing decisions are made in Australian PSOs and to examine the relevance of TCE as an explanatory framework. Emergent dimensions of the research highlighted that the basic cost reduction tenet of TCE is sometimes overshadowed in practice because of intra-organisational politics and external political pressures to comply with government policy and satisfy community stakeholders.
    Original languageEnglish
    Title of host publicationAccounting and Finance Association of Australia and New Zealand Annual Conference 2003
    Place of PublicationAustralia
    PublisherAFAANZ
    Pages22
    Number of pages1
    Publication statusPublished - 2003
    EventAccounting and Finance Association of Australia and New Zealand Conference - Brisbane, Queensland, Australia
    Duration: 06 Jul 200308 Jul 2003

    Conference

    ConferenceAccounting and Finance Association of Australia and New Zealand Conference
    Country/TerritoryAustralia
    Period06/07/0308/07/03

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