The Effect of Subcontracted Labor Mix on Financial Performance: Evidence from High-Tech Project Teams

Author:

Momcheva Antoaneta1ORCID,Avgerinos Emmanouil2ORCID,Salvador Fabrizio2ORCID

Affiliation:

1. House of Innovation, Stockholm School of Economics, 113 83 Stockholm, Sweden;

2. IE Business School, IE University, 28006 Madrid, Spain

Abstract

Problem definition: We investigate the effect of using subcontracted workers together with permanent workers on project financial performance. Academic/practical relevance: It is widespread practice, across disparate businesses, to staff project teams with subcontracted workers—and yet, despite the prevalence of this phenomenon, there is scant research on how subcontracted workers impact project performance. Investigating such an effect is important because past findings on the effects of subcontracting in retail or assembly lines cannot be hastily extrapolated to the more qualified workers and more demanding tasks normally associated with project environments. Methodology: Building on previous findings about the higher motivation level of subcontracted versus permanent workers when the latter are protected from individual dismissal by the law, we develop hypotheses to conceptualize how and under what conditions subcontracted workers positively impact project performance. We then test our hypotheses by analyzing 413 projects of a European high-tech firm. Results: We find that with increased use of subcontracted workers comes increased project profit margins. This positive effect is stronger for larger teams and weaker when large project scope changes occur or when higher-skilled workers are subcontracted. We also find this effect to be stronger when subcontracted workers are involved in technical rather than administrative roles and when subcontractors join in the later stages of the project. Managerial implications: This study offers guidelines on how project managers can use subcontracting to increase project margins, highlighting strategic and tactical factors that affect the benefits of using subcontracted labor.

Publisher

Institute for Operations Research and the Management Sciences (INFORMS)

Subject

Management Science and Operations Research,Strategy and Management

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3