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Shades of gray: effect of external work arrangements on firm performance under operational and strategic contingencies

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Abstract

This study builds on recent research on the external workforce by examining the effects of (1) temporary work (2) independent contracting, and (3) consulting on firm performance, considering the client firms’ tasks, the qualification requirements for carrying out these tasks, and its strategic context. The findings are based on a survey of 261 firms in the German manufacturing industry. At the operational level, the results indicate that the difficulty of the tasks to be performed by external workers influences their performance. Whilst temporary work and consulting are better suited for simple tasks with low qualification requirements, independent contracting increases firm performance when appointing individuals to perform complex tasks. At the strategic level we research effects by two strategic orientations; one generally increasing the internal innovation performance (innovation orientation), the other generally increasing the performance of external relationships (alliance orientation). The innovation orientation here reduces the negative effect of temporary work, whereas a high alliance orientation precipitates a positive effect of consulting on firm performance. This paper demonstrates that clients’ task requirements and their alignment towards innovation and alliances have a significant influence on the benefits to the firm conveyed by highly qualified externals.

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Notes

  1. In Germany, the proportion of unskilled workers without relevant vocational training ranges between 40 and 60 % among all temporary workers (Crimmann et al. 2009). Graduates only account for 10 % of all temporary workers (Mitlacher 2007).

  2. Differences between low and medium use are significant for independent contracting (p = 0.02) and consulting (p = 0.01).

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  1. Chair of Strategic Management and Organization, University of Bayreuth, Prieserstr. 2, 95440, Bayreuth, Germany

    Ricarda B. Bouncken, Christian Lehmann & Martin Ratzmann

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  1. Ricarda B. Bouncken
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Correspondence to Ricarda B. Bouncken.

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Bouncken, R.B., Lehmann, C. & Ratzmann, M. Shades of gray: effect of external work arrangements on firm performance under operational and strategic contingencies. J Bus Econ 83, 863–900 (2013). https://doi.org/10.1007/s11573-013-0674-4

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