I often talk about the need for insightful governance as an essential part of business frameworks. In fact, it’s what Vested’s Rule 5 is all about. So I was happy to learn about the work of two scholars from Italy’s University of Salerno who have taken this idea a vital step forward.
I’ve talked a lot about “economic rationality” in outsourcing and business relationships in a globalised marketplace. This blog is dedicated to Paul Krugman, an economist and Nobel laureate, who fights for rationality mostly against great odds from within and without the economic community.
I’ve talked at length in this series recently about how academics and big thinkers have buttressed the importance of trust and collaboration in outsource deals. While it may seem like an anomaly, or at least a new idea, to mention cooperation and contracts in the same breath, it’s neither.
We know that trust, ethical behaviour and collaboration go hand-in-hand in our personal and social relationships. But how widespread are those things in our business and outsourcing relationships? Obviously they should be!
This article originally appeared in Outsource Magazine Issue #29 Autumn 2012
After two years of blogging for Outsource I hope readers have at least heard of Vested Outsourcing and maybe even read one of our three books. But perhaps you have some doubts and concerns, so you are still waiting on the sidelines. All too often we hear, “I like the theory of Vested, but does it really work in the real world? Are companies (especially ones people have heard of!) adopting the Vested approach?”
This month’s column pays a tribute to Elinor Ostrom, who shared the Nobel Prize award in economic science in 2009 with Oliver Williamson. Ostrom, who died at age 78 on June 12, was cited by the Nobel Committee for “her analysis of economic governance, especially the commons,” a term that refers to resources that are owned or shared in common among communities.
Too often people and businesses are locked into either destructive I-win-you-lose relationships, or what I often call a “ping pong” match where you are in a so-so relationship but either don’t know there is a better way or don’t have the courage to get out because things are not actually bad.
Luckily, things are changing and people are starting to wake up to the fact that win-win approaches are real – and offer real advantage and are worth the extra effort.
If you follow this column you know I am a fan of some of the behavioral and transaction cost economists, including John Nash and Oliver Williamson. This month I am adding Dan Ariely to my list of big thinkers.
Outsourcing involves major changes in your business model, your teams, your approach to core and non-core business lines and cultural mindsets.
That aspect of the outsource decision – change – is inherently psychological because when you come right down to it, it’s always about your people, their relationships and attitudes, and the way they adjust to new thinking and new patterns that will make or break an outsourcing partnership.
This article originally appeared in Outsource Magazine Issue #27 Spring 2012
Deciding to outsource demands a thorough make/buy analysis. However, far too many companies take the concept of make-or-buy as black and white. Dr. Oliver E. Williamson challenged the traditional make/buy decision process with his Nobel Prize-winning work in the area of transaction cost economics. Williamson received the Nobel Prize in 2009.