A Nobel Prize for the ‘Theory of Outsourcing’?

While the word ‘outsourcing’ is never used in Oliver E. Williamson’s paper, The Theory of the Firm as Governance Structure: From Choice to Contract, it might as well be. The recent Nobel Prize winner crafted an economic theory that EquaTerra observes regularly as organizations utilize third parties, or outsourcing, for the goods and services they need to run their business and serve their clients. These third parties create the need for a new operating paradigm that should shift the leadership structure of organizations to a governance approach moving away from direct management of people and production.