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Outsourcing in the Australian health sector : the interplay of economics and politics

Young, Suzanne 2005, Outsourcing in the Australian health sector : the interplay of economics and politics, International journal of public sector management, vol. 18, no. 1, pp. 25-36, doi: 10.1108/09513550510576134.

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Title Outsourcing in the Australian health sector : the interplay of economics and politics
Author(s) Young, Suzanne
Journal name International journal of public sector management
Volume number 18
Issue number 1
Start page 25
End page 36
Publisher Emerald Group Publishing Ltd
Place of publication Bradford, England
Publication date 2005
ISSN 0951-3558
1758-6666
Keyword(s) Australia
health services sector
outsourcing
resource management
Summary Purpose – The paper discusses the reasons and approaches used at three health organisations in introducing outsourcing. It specifically answers the question: why have managers of health organisations outsourced some functions in preference to others?

Design/methodology/approach – This research employs a case study method making use of qualitative analysis. The health organisations were chosen first as representatives of their type, and secondly due to the nature of the outsourcing decisions made. The first health organisation operates in the rural sector; the second is a metropolitan network; and the third is a large metropolitan hospital, which, in contrast to the other two case study organisations, had made only one decision to outsource, producing the largest outsourcing contract in health in Australia. Furthermore, this situation was distinctive as the contract was terminated and re-issued to another private sector organisation.

Findings – The reasons for outsourcing varied within and between health organisations. Although generally they were made on the bases of the characteristics of the labour market, employee skill levels and the nature of industrial relations, the perception of what was core, the level of internal management skills, the ability of internal teams to implement change and the relationship between management and staff. Even though cost savings and a downsized labour force resulted, generally these occurred even when services were not outsourced, through the use of other change processes, such as introducing new technology, changing structures and promoting workforce flexibility. The interplay of political reasons and economic effects was evident along with the political nature of the decision-making and processes used. The paper concludes that the power of managers was a moderating factor between the desire for outsourcing and whether outsourcing actually occurred.

Research limitations/implications – Although this research was conducted solely within the health sector it has implications for other public sector bodies and the private sector.

Practical implications – Managerial decision making can be enhanced with the exploration of the full complement of reasons for the outsourcing decision.

Originality/value – The paper has value to both academics researching in the public sector and public sector managers.

Language eng
DOI 10.1108/09513550510576134
Field of Research 150312 Organisational Planning and Management
HERDC Research category C2 Other contribution to refereed journal
ERA Research output type C Journal article
Copyright notice ©2005, Emerald Group Publishing Limited
Persistent URL http://hdl.handle.net/10536/DRO/DU:30013133

Document type: Journal Article
Collection: School of Management and Marketing
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