Towards Fair and Competitive Outsourcing
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Companies increasingly outsource to outsourcing suppliers that employ marginalized people. The term marginalized people is used to refer to disadvantaged individuals with few opportunities for employment. From the perspective of client organizations, this is a form of corporate social responsibility (CSR). Outsourcing to outsourcing suppliers that employ marginalized people is a growing market, and CSR is becoming increasingly relevant as well, which warrants more insight into the effect of this employment on marginalized people and the benefits and challenges for client organizations. The purpose of this thesis is thus to provide insight in how client organizations can incorporate CSR to improve the lives of marginalized people in a way that is also beneficial for the client organizations themselves. Additionally, the scope is set on two such methods, namely impact sourcing, which is the hiring and training of marginalized people by outsourcing suppliers, and ethical outsourcing, which is the enforcement of minimal working standards. The method used in this thesis consists of a semi-structured literature review on impact sourcing and ethical outsourcing, interviews with refugees and knowledge immigrants to find out about the efficacy employment had on their lives, and an analysis of the CSR reporting of large companies. The key findings are as follows. Four ways in which impact sourcing affects marginalized people have been found, most notably that it fosters personal development and self-efficacy. These findings were not all applicable to refugees that were interviewed, however all refugees noted an improvement in their lives thanks to their employment. Four benefits of impact sourcing were found for client organizations, the most important of which is that impact sourcing is cheaper relative to traditional outsourcing. Additionally, products and services delivered through impact sourcing are of similar quality as those of traditional outsourcing. Four challenges have been found for client organizations that engage in impact sourcing, for example unreliable infrastructure. Not enough literature was found on ethical outsourcing to draw conclusions, however one potential benefit is that it may protect the brand. With regards to the CSR reporting of large companies, a total of twenty-eight methods were found, grouped by nine topics. The method most often reported on is the continued evaluation of suppliers, which belongs to the topic of supplier social assessment. In this thesis is thus described how marginalized people can benefit from being employed by outsourcing suppliers, how client organizations can benefit from this and which challenges they must overcome, and which methods client organizations can implement to further their CSR efforts in outsourcing.