1399 Scales and Dynamics in Outsourcing Iva Miranda Pires Faculdade Ciências Sociais e Humanas, Portugal Torunn Kvinge Fafo Institute for Labour and Social Research, Norway S introduction Outsourcing is used to describe the situation where a firm decides to subcontract assembly and/or service functions to an external supplier, either locally or abroad. When activities are subcontracted abroad, the term offshore outsourcing often applies. While offshore assembling activities have taken place for some time, the phenomenon of outsourcing services abroad is quite new. Several factors have contributed to these altered circumstances. First, the development of information and communication technologies (ICT) implies that services can, to a great degree, also be located at arm's length or elsewhere in the flat world (Friedman, 2005). Second, institutional changes have opened access to These networked organizations, which vary in size and geographical scope, may be very flexible, as the network could easily be rearranged by releasing some nodes while integrating new ones. The chosen solution again depends on the economic and market context. dEfinitions Outsourcing involves the transfer of specific activities that have usually been undertaken in-house, to another company (Greaver, 1999) . This means that a company decides to contract out some, normally noncore, ac- tivities to concentrate on core activities as a means of lowering production costs and optimizing the use of