Document Type

Closed Project

Publication Date

Fall 2004

Course Title

Capstone Project

Course Number

EMGT 506/606


Contracting out -- Effect on project management, Project management, Contracting out -- Legal aspects, Technology -- Management


In and of itself, domestic business law is quite complex with respect to project functions that corporations sometimes outsource to other domestic firms. But when project tasks are outsourced to firms in other countries, the differences in laws from nation to nation regarding issues of intellectual property rights, taxation, labor issues, business practices, and contracts add multiple layers of legal complexity to the project.

Once seen as a short-term fix for managing peaks and valleys in customer demand, the outsourcing of products and services by corporations is now considered to be a strategic tool. It is, in fact, becoming more and more necessary for both large and small companies to survive and remain competitive. In addition to manufacturing, many professional functions, including software and hardware engineering, management, and information technology are being outsourced to foreign companies more and more frequently. Due to the widespread availability of local (and usually much cheaper) pools of talented professionals in foreign countries, CAD (Computer Aided Design) tools and the Internet, it is no longer necessary for professional resources to be physically co-located within a corporation. As projects involving new and unique technologies and processes become more and more globally outsourced and the organizations and individuals performing the various tasks within the projects become more interdependent, it generally becomes more practical to set up a PM office at the contractor's facility to manage projects within projects rather than attempt to manage them from the project owner's home facility, which may be many time zones away.

This article is intended as a general overview of some of the legal issues with regards to technology projects involving the outsourcing of various project functions to corporations in foreign countries.


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