Governance Options

Organizations of course have a choice about what sorts of activities they take on. It is now pretty clear that core functions should not be outsourced. Even so, many organizations struggle to define their core competence well enough to serve as an actionable guide. The nature of service functions can make it hard to separate core from noncore functions. Any direct comparison of performance measures between two governance mechanisms continues to present problems to management. Activities within the organization often do not lend themselves to any one-to-one market comparison.1 Sometimes this occurs for good reasons. Often, a new business idea, in its formative stages, will not find market support. An activity that an organization performs far better than anyone else should be retained within also. These types of decisions are easy to make.