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

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.

Book reviews : David Palmer, Ross Shanahan, and Martin Shanahan, eds., Australian Labor history reconsidered

An objective of this collection is to bring the history of the Australian labor movement to international attention. The editors introduce the collection with a brief overview of Australian labor history, emphasizing differences between the Australian and American experiences. The introduction argues that a unique aspect of Australian labor history is “laborism,” which is defined as the central place of the labor movement in Australian culture, as compared with the more marginal position of the labor movement in America. In Australia, this centrality is reflected in the embedding of trade unions and labor in the state through wage-fixing tribunals, a social security system designed to support the families of male wage earners, and the Australian Labor Party's strong links to the trade union movement. The introduction is informative and especially benefits from the insights of David Palmer, an American historian teaching at Adelaide's Flinders University. However, the introduction was apparently written later at the suggestion of an American reader and has thus not been fully integrated into the structure of the book.

Construction supply chain economics

Introducing the new topic of supply chain economics, this comprehensive title combines theory and practice - including real-world case studies - to bring new methodology and models for mapping the construction sector.