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Service Outsourcing Partnership: A Case of Baosteel Group

As corporations look to concentrate on core competencies, the likelihood of outsourcing various business services increases. A special kind of services outsourcing in China is that the internal service provider is transformed to outside supplier through enterprise reform and restructuring. The nature of partnerships involved between clients and their providers in this kind of outsourcing has not received adequate attention in the scholarly literature. In this paper, we present a case that explains this type of service outsourcing partnership. We discuss how this partnership is conceived and implemented. A case study of the steel producer Baosteel of China highlights that while firms may reduce their presence in peripheral activities by non-core service outsourcing, they may also increase their presence in core areas so as to increase their value proposition.