The Unbundling of Corporate Functions: The Evolution of Shared Services and Outsourcing in Human Resource Management

43 Pages Posted: 28 Aug 2009

See all articles by Howard Gospel

Howard Gospel

King's College London - The Management Centre

Mari Sako

University of Oxford - Said Business School

Date Written: May 1, 2009

Abstract

This paper analyses the demand side of business services outsourcing. Using insights from a number of bodies of literature, the paper interprets business services outsourcing as corporate restructuring involving the administrative functions of the firm. Propositions are developed around the following. First, the existing corporate structure and the nature of supplier markets affect the paths chosen to create shared business services and to move to outsourcing. Second, the trajectory of the move to shared services and outsourcing affects the distribution of capabilities between users and suppliers. The study examines these propositions through a comparison of human resource outsourcing in two leading consumer products companies, Procter & Gamble (P&G) and Unilever. We find that a relatively high degree of centralization at P&G led it to create an internal shared services center before outsourcing, whilst a more decentralized Unilever utilized outsourcing as an occasion for globally standardizing its systems and processes. The paper draws implications of these different paths for core capabilities.

Suggested Citation

Gospel, Howard and Sako, Mari, The Unbundling of Corporate Functions: The Evolution of Shared Services and Outsourcing in Human Resource Management (May 1, 2009). Available at SSRN: https://ssrn.com/abstract=1463428 or http://dx.doi.org/10.2139/ssrn.1463428

Howard Gospel

King's College London - The Management Centre ( email )

150 Stamford Street
London, SE1 9NN
United Kingdom
44 020 78484121 (Phone)

Mari Sako (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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