Contracting out

Supply chain challenges have been significantly affected by both demand and supply on a global level. The selection of manufacturing countries has become critical to firms and their boards, even more so coming out of the COVID-19 global pandemic. The present study focuses on how firms select countries and regions to de-risk future global apparel sourcing, as countries that have been dependable in the past may not be in the future based on frequent environmental jolts, legacy supply chain failures, shifting government policy, and extreme volatility. The result of this study is a decision model for manufacturing country selection. This research was focused on the apparel industry; however, further research may indicate that it is applicable to other industries. A group of criteria was selected, the relative significance of these criterion was determined using the Analytical Hierarchy Process (AHP). The AHP methodology was applied in a case study as a decision-making tool to enable decision-makers to assess the most suitable countries for manufacturing country selection. The result of this study is a decision model for manufacturing country selection based on multiple criteria weighted by industry experts using Analytical Hierarchy Process (AHP). In developing the model we utilize data from 61 countries representing over 95% of all the global apparel exports, with criteria utilized originating from 10 indices.

An information system is defined as "a system that uses information technology to capture, transmit, store, retrieve, manipulate, or display information used in one or more business processes" (Alter, 1996, p. 61). The use of information systems (IS) in local governments has dramatically increased and diversified over the past ten years. Because IS expenditures are expected to increase, IS management will be a key issue in city governments. In order to explore IS management and outsourcing in American city governments, three theoretical perspectives and three models are employed. The three theoretical perspectives influencing IS outsourcing are (1) economic factors, (2) diffusion of innovation, and (3) organizational factors. The three models focus on three factors: (1) the percentage of total city budget allocated to total IS expenditure, (2) the percentage of total IS budget allocated to IS outsourcing expenditures, and (3) the percentage of total IS budget allocated to each IS function. In Model 1, the findings show that the population size of city government is inversely related to the total percentage of city budget allocated to total IS expenditures: as the population size of city government increases, the percentage of the total budget of the city government allocated to IS expenditures decreases. In Model 2, three theories to explain decisions regarding IS outsourcing are used. Economic factors influencing IS outsourcing decisions are when: (1) pressure to reduce cost is important, (2) access to cutting-edge technology is important, (3) IS requires a long time for the in-house staff to learn, and, (4) IS facilities are not available. However, city administrators did not express a concern about the loss of control of strategic applications, about being locked into a contract, or even about added costs for business or technology changes when their IS is outsourced. Theories of innovation diffusion includes several factors. The findings show that city IS administrators do learn about IS outsourcing from neighboring governments. Organizational factors that can potentially influence the IS outsourcing decision include the type and population size of city government, available resources, and internal transaction costs. IS outsourcing expenditure as a percentage of total IS expenditure does not vary with the type and size of city government, a finding which requires further investigation. The analysis of different types and sizes of city governments appears in Model 3. When more resources are available to the IS department, the city government is likely to hire IS experts, provide facilities, and engage in a higher rate of insourcing. Internal transaction costs measured by time delays are inversely related to the expenditures on IS outsourcing. In Model 3, IS outsourcing expenditure by function as a percentage of total IS expenditure, three theoretical perspectives are employed to explain this analysis. In the category of economic factors influencing IS outsourcing, asset-non specific IS functions such as data processing/operations and network/telecommunications are outsourced in order to reduce cost while asset-specific IS functions, such as application development/maintenance, are outsourced in order to gain access to cutting-edge technology. With respect to whether theories of innovation diffusion explain the IS outsourcing decision, the findings show that city governments investigate other neighboring governments to determine whether there have been IS outsourcing decisions in the areas of data processing/operations, network/telecommunication, and application development/maintenance. According to the findings, first, small city governments tend to allocate a higher IS outsourcing expenditure as a percentage of total IS expenditure to than do large city governments. Second, large city governments tend to allocate a lower percentage of IS outsourcing expenditure to systems planning/management because large city governments tend to set up this IS function within the organization and, thus, spend money on maintaining this function. Third, the council-manager type of city governments tend to allocate a higher rate of IS outsourcing expenditure to network/telecommunication and application development/maintenance than do the mayor-council type of city governments.

Outsourcing has become a significant factor in the U.S. economy over the past two decades. Annual report disclosures made by a firm related to outsourcing are voluntary disclosures. Understanding the determinants and firm performance implications of initial outsourcing annual report disclosures is important to capital market providers, standards developers, and to the firms themselves. I identify and study firms making initial voluntary disclosures of outsourcing in their annual reports on Form 10-K between 1993 and 2003 after they make non-annual report related public disclosures. Specifically, I investigate if determinants of the initial annual report disclosure decision and subsequent performance are associated with the initial disclosure. This study contends managers disclose information related to outsourcing in their annual reports to reduce information asymmetry and to minimize agency costs. I hypothesize and develop a firm-related variable commonly used in agency theory to test this assertion. Signaling theory and voluntary disclosure theory also explain the determinants for firm voluntary outsourcing annual report disclosures. I develop several hypotheses defining determinants potentially associated with the likelihood of initial annual report outsourcing disclosure decisions, and test these determinants using a conditional logistic regression model and a matched-pair group of firms making public outsourcing disclosures but not making annual report disclosure. Using signaling theory, I also develop hypotheses testing if the initial outsourcing annual report disclosure sends a signal regarding future firm performance--specifically testing firm performance measures related to profitability and cash flow. I test these hypotheses using OLS models and the same matched-pair group of firms. I find firms with high levels of debt, high total cost ratios, and high returns on assets are more likely to make initial annual report outsourcing disclosure.

References to accountability are common throughout public administration literature. However, a clear model to assess accountability in government programs is not fully developed. This research fills this gap and provides policymakers with a tool they can use to assess accountability in both public and contracted programs and enables them to make more informed contracting-out decisions. In addition, the Integrated Accountability Framework introduced in this research will serve as a guideline for how public administrators can improve accountability in the programs they administer and oversee. For the public and private health care programs analyzed in this study, the findings indicate that the publicly delivered programs provided more accountability to the vulnerable populations served than the contracted-out health care programs.

Public administration scholars have raised serious concerns about loss of democratic accountability when government services are outsourced to private forprofit businesses because of the very different values and missions of the two sectors. Particular concern for democratic accountability arises when administrative discretion is delegated to governments' private sector agents. Furthermore, if contractors may adversely impact individual rights or interests, or may adversely impact vulnerable populations, special democratic responsibilities arise. It is these three features of outsourcing transactions that constitute the elements of the proposed framework used in this research in order to assess need for heightened attention to democratic accountability. Some scholars argue for application of constitutional and administrative law norms to some government contractors.

Governments across the country have been outsourcing traditional government services at an ever-increasing rate. Researchers debate the efficiency of privatization, and evidence exists both for and against increased private production of public goods. At the local level of government, a growing trend is privatization in the form of public-private partnerships. To determine the efficiency of these partnerships between municipal governments and private companies, this study examines the "most" privatized city in the United States, Sandy Springs, Georgia. I compared spending in Sandy Springs to five similar nearby cities and derived cost estimates of government services. I found that the "Sandy Springs Model" of local government lowered costs and increased efficiency when compared to traditional municipalities.