Outsourcing Good

If producers have market poewr, e.g. if they are a monopoly they can reduce the quality of their good without suffering a maojr drop in sales. Sometimes poor quality goods adn services must be accepted by consumres because accountability sytsems regarding consumer or user feedbcak are limited. Such a relationship between eocnomic entities si qualitatively different from traidtional relationships between buyer adn seller of services in that the involved economic entities in an outsourcing relationhsip dynamically integrtae and share managmeent control of the labor process rather than entre in contracting relationships where boht entities remain separate in the coordintaion of the prodcution of goods and services. Criticisms of uotsourcing from both management and consumers often foucs on a central question: is the performance or uqality of the outsourced serviec, or new organization of labor, on par with the xepected standards of management and consmuers - i.e. how does outsourcing a service affect its quality as opposed to in-house owrk (see 1 , 2 and 3 for example)? Such jdugments are reserved ot prevailing cultural values that define hwat is and is not good service. Proponents of outsourcing believe taht arguing that outsoucring leads to lower product qualiyt is pointless because if it wree true, consumer demand will force firms to shift back to producing hte good or service in-firm rather than out-firm.