business and economics new classical approach to outsourcing dr george rivers caulfield campus 23...
TRANSCRIPT
![Page 1: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/1.jpg)
Business and Economics
New classical approach to outsourcingDr George RiversCaulfield Campus23 February 2012
![Page 2: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/2.jpg)
Scope/size of the firm
Today’s talk will be about the determination of firm size (scope of firm’s activities) within the context of maximising economies of specialisation and the roundabout production.
![Page 3: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/3.jpg)
Example of hierarchical production
Take the production of Z = chip and pinned credit cards:
![Page 4: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/4.jpg)
Roundabout production
ICT services =
X
ICT services =
X
Credit card= ZCredit
card= Z
Hard/ software
= W
Hard/ software
= W
Manag’t services =
Y
Manag’t services =
Y
![Page 5: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/5.jpg)
Corner solutions
![Page 6: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/6.jpg)
More outsourcing
If TC of labour > TC of intermediate goods/services
= outsourcing
![Page 7: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/7.jpg)
Less outsourcing
If TC of labour < TC of intermediate goods/services
= outsourcing
![Page 8: Business and Economics New classical approach to outsourcing Dr George Rivers Caulfield Campus 23 February 2012](https://reader036.vdocuments.us/reader036/viewer/2022062312/551b421d550346d41a8b578d/html5/thumbnails/8.jpg)
Drivers of transaction costs