Outsourcing War: The Evolution of the Private Military Industry after the Cold War

45 Pages Posted: 30 Oct 2009

See all articles by Joel A. C. Baum

Joel A. C. Baum

University of Toronto - Joseph L. Rotman School of Management

Anita M. McGahan

University of Toronto - Rotman School of Management

Date Written: October 29, 2009

Abstract

In this paper, we study the evolution of private military corporations (PMCs), which are for-profit organizations that subcontract military field services to sovereign authorities as well as to others. Between Eisenhower’s famous “military-industrial complex” speech in 1961 and the post-9/11 war in Iraq, PMCs were transformed from relatively minor subcontractors to major companies with unique capabilities that made them strategically central to the sovereign military organizations from which they had grown. Throughout this period, PMCs exhibited a “hybrid organizational form” as delineated within organizational economics. Our purpose is grounded theorizing in which we derive insights about the evolution of PMCs as hybrid organizational forms. Our analysis suggests that hybrid forms of organization enable transactions and capability development that are not possible within either markets or hierarchies. Hybrid forms may thus represent a conduit for institutional entrepreneurship and the emergence of new industry structures. Their intertemporal characteristics warrant further theoretical study.

Keywords: Outsourcing, hybrid organizations, private military companies

JEL Classification: L14, L22

Suggested Citation

Baum, Joel A.C. and McGahan, Anita M., Outsourcing War: The Evolution of the Private Military Industry after the Cold War (October 29, 2009). Available at SSRN: https://ssrn.com/abstract=1496498 or http://dx.doi.org/10.2139/ssrn.1496498

Joel A.C. Baum (Contact Author)

University of Toronto - Joseph L. Rotman School of Management ( email )

University of Toronto
105 St. George Street
Toronto, ON, M5S 3E6
Canada
416-978-4914 (Phone)
416-978-4629 (Fax)

HOME PAGE: http://www.rotman.utoronto.ca/~baum

Anita M. McGahan

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-978-6188 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
607
Abstract Views
2,828
rank
47,817
PlumX Metrics