Organizing for Outsourcing:The Case of Purchasing & Supply Management

Outsourcing was and remains a prevalent business practice. Although it has been studied from many angles, the impact of organizational design on outsourcing is not yet well understood. By presenting a multi-year case study from 2010 to 2013 at a global chemical and pharmaceutical company, we elaborate on organizational design implications for outsourcing. Specifically, we take the case of the Purchasing & Supply Management (PSM) function to illustrate how an activity-based design can facilitate outsourcing. Simultaneously, this study suggests that bringing such considerations forward could be another cornerstone in further development of PSM as a strategic function.