The Organizational Strategist

May 6, 2010

A Strategic Course of Action: Outsourcing and Partnership

Filed under: Organizational Development, Strategy, Sustainability — Whit @ 10:41 pm


Every organization has its strengths and its weaknesses. To create a strong, lasting competitive advantage the strengths of an organization must be very powerful and able to overshadow its weaknesses. At the same time, an entire organization should be kept healthy like how a boat should have strong oars or a motor to move without any holes in the hull to drag it down. Any weakness that causes its organization to sink should be minimized, patched, and brought up so that the organization, as a whole, is better.

-Forging Partnerships with Complementary Strengths-

In order to overcome the shortcomings in an organization, a number of things can be done. Creating a whole new function to replace the old is an option. However, this can take a lot of time, dedication, and resources in order to make this happen. This can be a very promising long term option if such a deep commitment can be made. An alternative is to make gradual changes (ex: process improvement, strategic divestment, or infrastructure upgrades) to work toward a more successful function. Yet this may take a very long time to reach the desired level and, without truly knowing root causes of organizational weakness, it can be very hard to sustain and renew improvement. Finally, there is relying on external help to replace, fix, rebuild or otherwise overcome the weakness in an organization. This can be accomplished through outsourcing a function.

If done right, outsourcing can become more than a quick fix to a troubled area. Outsourcing is often done in order to trim costs. The global economic network with differing material and labor costs makes outsourcing very promising for cost cutting purposes. Beyond that, outsourcing can become an opportunity for strategic partnership. This is a much more impactful and beneficial type of outsourcing as it becomes more relationship driven instead of simply give and take. What this means is to actively partner and engage with another organization to harness complementary organizational strengths. The ideal outsourcing candidate should be an organization that can offer its core strengths and sustainable competitive advantages in the relevant area. For instance, an organization that has very poor IT enablement and server infrastructure can partner with IBM to provide such support.

Ideally, two or more organizations could find pairings of strengths and weaknesses to complement each other and form a truly symbiotic relationship. This kind of partnering could lead beyond long lasting contracts and mutually reinforcing interactions. In the extreme, it could lead to merging organizations if the relationship and cross-organizational benefits are strong enough and the organizations are compatible in other ways as well.


Creating an enduring strategy is what organizations should strive to accomplish. However, that does not mean that all of the answers or ideas must be generated or grasped from inside the organization itself. Outsourcing can bring many benefits and help overcome many organizational difficulties. The external environment, while treacherous in many competitive landscapes, can be welcoming and invigorating.


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