商业职能分类手册 Manual on the Classification of Business Functions

ofBusinessFunctions

ST/ESA/STAT/SER.F/125

DepartmentofEconomicandSocialAffairs

StatisticsDivision

StatisticalPapersSeriesFNo.125

ManualontheClassificationofBusinessFunctions

UnitedNationsNewYork,2023

DepartmentofEconomicandSocialAffairs

TheDepartmentofEconomicandSocialAffairsoftheUnitedNationsisavitalinter-facebetweenglobalpoliciesintheeconomic,socialandenvironmentalspheresandnationalaction.TheDepartmentworksinthreemaininterlinkedareas:(i)itcompiles,generatesandanalysesawiderangeofeconomic,socialandenvironmentaldataandinformationonwhichUnitedNationsMemberStatesdrawtoreviewcommonprob-lemsandtotakestockofpolicyoptions;(ii)itfacilitatesthenegotiationsofMemberStatesinmanyintergovernmentalbodiesonjointcoursesofactiontoaddressongoingoremergingglobalchallenges;and(iii)itadvisesinterestedGovernmentsonthewaysandmeansoftranslatingpolicyframeworksdevelopedinUnitedNationsconferencesandsummitsintoprogrammesatthecountryleveland,throughtechnicalassistance,helpsbuildnationalcapacities.

Note

Thedesignationsemployedandthepresentationofthematerialinthepresentpublica-tiondonotimplytheexpressionofanyopinionwhatsoeveronthepartoftheUnitedNationsconcerningthelegalstatusofanycountryorofitsauthoritiesorthedelimi-tationsofitsfrontiers.Theterm“country”asusedinthispublicationalsorefers,asappropriate,toterritoriesorareas.Thedesignationsofcountrygroupsinthepublica-tionareintendedsolelyforstatisticaloranalyticalconvenienceanddonotnecessarilyexpressajudgmentaboutthestagereachedbyaparticularcountry,territoryorareainthedevelopmentprocess.MentionofthenamesoffirmsandcommercialproductsdoesnotimplytheendorsementoftheUnitedNations.ThesymbolsofUnitedNationsdocumentsarecomposedofcapitallettersandnumbers.MentionofsuchasymbolindicatesareferencetoaUnitedNationsdocument.

ST/ESA/STAT/SER.F/125

UnitedNationspublication

PDFISBN:978-92-1-002476-1

Copyright©UnitedNations2023Allrightsreserved

iii

Prefaceandacknowledgements

TheManualontheClassificationofBusinessFunctionswasdevelopedtoprovideacommonframeworkformeasuringhowenterprisesorganizetheirproductionandsupportingfunctionsandtoimproveunderstandingofglobalization,globalvaluechainsandsourcingpatterns.Theclassificationprovidesaninternationallyagreedsetofcategoriestocollectandreportstatisticsonthebusinessfunctionsofenterprisesand,therefore,acommonframeworkforinternationalcomparison.

Theclassificationofbusinessfunctionsgoesbeyondthetraditionalproductoractivitybreakdownandprovidesmorerelevantcategoriesfordescribingandmeasuringhowcompaniesorganizetheirproductionandsupportingfunctions.Suchclassificationisparticularlyusefulinmeasuringdomesticandinternationalsourcingandthedistri-butionofworkinglobalvaluechains.

WorkontheclassificationstartedwiththerecommendationadoptedbytheExpertGrouponInternationalStatisticalClassificationsoftheUnitedNations(renamedthe“UnitedNationsCommitteeofExpertsonInternationalStatisticalClassifications”inMarch2021)atitsmeetingheldfrom18to20May2011,inNewYork,todevelopguid-anceforidentifyingcoreandsupportbusinessfunctionsinrelationtointernationaloutsourcingbyenterprises.AtechnicalsubgroupwasestablishedtoreviewexistingworkcarriedoutinEurope,CanadaandtheUnitedStatesofAmerica,andtodevelopandtesttheclassificationofbusinessfunctions.EurostattooktheleadinbuildingandtestingapotentialclassificationinEuropeanUnioncountriesthroughtheInterna-tionalSourcing/GlobalValueChainsSurvey.InNovember2020,theTechnicalSub-groupmetinNewYorktoreviewcountryexperiencesintheuseoftheclassification.TheSubgroupagreedthattherewasaneedtoelevatetheclassificationofbusinessfunctionstothelevelofaninternationalstatisticalclassificationinordertoharmonizeeffortsinmeasuringsourcing.

AglobalconsultationonthedraftmanualwascarriedoutfromAugusttoOctober2020.Onthebasisoftheoutcomeoftheconsultation,anduponrecommendationoftheCommitteeofExpertsonInternationalStatisticalClassifications,theclassificationofbusinessfunctionswassubmittedandendorsedbytheStatisticalCommissionatitsfifty-thirdsession,inMarch2022,asaninternationalstatisticalclassification.

ThefollowingexpertsweremembersoftheTechnicalSubgroupandcontributedtothedevelopmentoftheManual:FranklinAssoumouNdong(Canada),PeterBøeghNielsen(Denmark),AmitavaSaha(India),StefanoMenghinello(Italy),FredDemollinandBartLoog(Netherlands),AndrewHancock(NewZealand),SeveraBelistaDeCosto(Philippines),PaulaBordelo(Portugal),FayDorsett(UnitedStates),CelestinoGiron(EuropeanCentralBank),AxelBehrens,NikolaSunjkaandGeorgiosPapadopoulos(Eurostat),NadimAhmad(OrganisationforEconomicCo-opera-tionandDevelopment),BarbaraD’Andrea(WorldTradeOrganization),TimothySturgeonandSharonP.Brown(independentexperts)andIlariaDiMatteo,MarkieMuryawan,RonaldJansen,IvoHavinga,NancySnyderandZhiyuanQian(StatisticsDivision).TheprojectwascarriedoutundertheoverallsupervisionofMr.Havinga.

ivManualontheClassificationofBusinessFunctions

Invaluableinputswerereceivedfromvariousnationalstatisticalofficesin2020duringtheglobalconsultation,aswellasfromregionalworkshopsandmeetingswithinter-nationalandregionalagencies,suchastheEurostatGlobalValueChainsTaskForceandvariousnationalstatisticaloffices.

SpecialacknowledgementsgotoMessrs.SturgeonandNielsen,whowereactivethroughouttheinitialproposalandrevisionprocess,andtoMessrs.SunjkaandPapadopoulos,forleadingthesubstantivedevelopmentofthepresentclassificationanditsimplementationintheglobalvaluechainsurveysinEurope.

v

Abbreviationsandacronyms

CPAStatisticalClassificationofProductsbyActivity

CPCCentralProductClassification

GVCglobalvaluechain

ICTinformationandcommunicationstechnologyISinternationalsourcing

ISCOInternationalStandardClassificationofOccupations

ISICInternationalStandardIndustrialClassificationof

AllEconomicActivities

NACEStatisticalClassificationofEconomicActivitiesin

theEuropeanCommunity

NAICSNorthAmericanIndustryClassificationSystem

vii

Contents

page

Prefaceandacknowledgements iii

Abbreviationsandacronyms v

I.Introduction 1

A.Introductiontotheclassificationof

businessfunctions 1

B.Historicalbackground 1

C.StructureoftheManual 2

II.Underlyingprinciplesoftheclassification 3

A.Purposeandnatureoftheclassification 3

B.Scopeoftheclassification 3

C.Statisticalunits,observationalunitsandpopulation 3

D.Differencesfromothertypesofclassification 4

E.Implementationplan 4

III.Conceptofbusinessfunctionsandtheiruseinstatisticalsurveys 5

A.Conceptofbusinessfunctions 5

B.Adaptingtheconceptofbusinessfunctionsforuseinstatistical

surveys 6

C.Usingtheclassificationofbusinessfunctionstodefinepatternsof

industrialorganizationandsourcinglocation 7

D.Coreversussupportbusinessfunctions 9

E.Analyticaluses 11

IV.Classificationofbusinessfunctions 13

A.Distinctionbetweencoreandsupportfunctions 13

B.Methodsforidentifyingthecorebusinessfunction 16

V.Concludingcomments 19

References 21

Glossary 23

Annex

Classificationsofbusinessfunctionsusedinpriorstatisticalsurveys 25

Useofbusinessfunctionsinsurveys 25

Businessfunctionslists 25

Tables

1Genericsurveyquestiononbusinessfunctionsourcingbyorganization

andlocation 9

2Coreandsupportbusinessfunctions 10

3Coreandsupportbusinessfunctionscomparison 11

4Classificationofbusinessfunctions 14

viiiManualontheClassificationofBusinessFunctions

page

5Approachesforidentifyingcorebusinessfunction:employmentor

turnover 16

A1

Examplesofclassificationofbusinessfunctionsusedinstatisticalsurveys27

Figures

1Organizationandlocation:foursourcingoptionsforbusinessfunctions 8

2Businessfunctionidentificationflowchart 17

1

ChapterI

Introduction

A.Introductiontotheclassificationofbusinessfunctions

1.Economicpolicymakingrequireshigh-qualitystatisticsonhowandwhereenterprises1aresourcingspecificbusinessfunctions.

2

Thisnewdemandstemsfromthemainstreamingofdomesticandinternationalsourcing

3

strategiesbyenterprisesacrosssize,industryclassificationsandeconomicterritory.Itcannotbeassumedthatenterpriseswillcarryoutallorevenmostbusinessfunctionsentirelywithintheirorganizationsandtheirdomesticeconomy.Furthermore,organizationalandgeographicalfragmentationinglobalvaluechains

4

isevidentinthemainrevenue-producingactivityofenterprisesandacrossvarioussupportingorancillarybusinessactivities,suchasresearchanddevelopment,informationandcommunicationstech-nology(ICT)services,customersupport,anddifferentmanagementandadministra-tiveactivities.Ameasurementframeworkbasedonbusinessfunctionsisrequiredtocaptureenterprise-levelinformationonthosearrangements.

2.Theclassificationofbusinessfunctionsisintendedforuseintheproductionofbusinessstatistics,buildingonexperiencesfromseveralrecentsurveysinEurope,Canada,theUnitedStatesandIndia.Theprimaryuseofbusinessfunctionstatisticsistoexaminethedetailsofinternationalsourcing.However,itcouldalsobeappliedtodomesticsourcing.

3.Internationalsourcingstatisticscanhelpstatisticiansandpolicymakerstomeasureandmonitororganizationalandspatialpatternsinnational,regionalandglobalvaluechainsandallowfortheeffectsofthosepatterns–onemployment,wages,innovation,skills,firmsurvivalandturnover–tobemeasured.Indomesticsourcing,classifyingbusinessfunctionshelpstoanalysethedynamicsofbusinessfunctionspecialization.Theclassificationofbusinessfunctionsisapplicableforbothdevelopedanddevelopingcountriestomeasuretheimpactofbothdomesticandinternationalsourcingintheirnationaleconomies.However,inpractice,itsimple-mentationhasfocusedmoreoninternationalsourcingthandomesticsourcing.

B.Historicalbackground

4.In2011,theStatisticsDivisionsubmittedtotheExpertGrouponInternationalStatisticalClassificationsoftheUnitedNationstheproposaltodevelopaninterna-tionalclassificationofbusinessfunctionsbasedontheexperiencesofselectedcoun-triesandEurostatinthemeasurementofthephenomenonofinternationalsourcing.

5.AtitsmeetinginMay2011,inNewYork,theExpertGrouponInternationalStatisticalClassificationsagreedthatguidanceforidentifyingcorebusinessfunctionsandsupportfunctionsinrelationtotheirinternationalsourcingshouldbedeveloped.Itrecognizedthatglobalsourcinghadhighpolicyrelevanceandthatfurtherworkwasneededtoimproveitsmeasurementbydevelopingacommonframeworkand

1Anenterprisemaybeacor-

poration,aquasi-corporation,anon-profitinstitutionoranunincorporatedenterprise

(SystemofNationalAccounts2008).

2Abusinessfunctionisagroup-ingofcommontasksthat

enterprisesmustcarryoutonaregularbasis,eitherinternallyorexternally,tobringgoodsorservicestomarket.

3Totalorpartialmovementofbusinessfunctionsbyanenter-prisetoanotherenterprise,

eitherwithinthedomesticmarketoracrossborders.

4Thesequenceofallfunctionalactivitiesrequiredinthepro-cessofvaluecreationinvolvingmorethanonecountry.

2ManualontheClassificationofBusinessFunctions

5Totalorpartialmovementofbusinessfunctionsbyanenter-prisetoanotherenterprise

outsideitsgroup.

guidelines.TheExpertGroupthereforesuggestedtocreateasubgrouptodiscusstheneedforastandardclassificationofbusinessfunctionstoreplicateandcomparetheresultsofsuchstudiesinternationally.Suchclassificationwouldgobeyondthetradi-tionalproductoractivitybreakdown(theCentralProductClassification(CPC)ortheInternationalStandardIndustrialClassificationofAllEconomicActivities(ISIC))andprovidemorerelevantcategoriestostudyhowcompaniesstructuredtheiropera-tions.Itwasrecognizedthatsuchclassificationwouldbeessentialinthemeasure-mentofoutsourcing

5

andthedistributionofworkinglobalvaluechainsandrelatingbusinessfunctionstointernationaltradeflows.

6.Atitsforty-thirdsession,inFebruary2012,theStatisticalCommissioncon-curredwiththeaforementionedconclusionsoftheExpertGrouponInternationalStatisticalClassifications.Asaresult,atechnicalsubgroupontheclassificationofbusinessfunctionswascreatedthesameyear.Inaddition,experimentalworkwascarriedoutinEurope,CanadaandtheUnitedStatestodevelopandtestaclassifica-tionofbusinessfunctions.Inparticular,EurostattooktheleadinbuildingandtestingtheclassificationinEuropeanUnioncountriesthroughtheInternationalSourcing/GlobalValueChainsSurvey.OnthebasisoftheexperiencegainedbyEurostat,adraftclassificationofbusinessfunctionswasdeveloped.Furthermore,thetermsofreferenceofthetechnicalsubgroupwereupdatedinOctober2020inthelightoftheworkcarriedoutsince2012.

7.TheTechnicalSubgroupontheClassificationofBusinessFunctionsmetinNovember2020toreviewthedraftclassification.TheSubgroupagreedthattherewasaneedtoelevatetheclassificationofbusinessfunctionstothelevelofaninternationalstatisticalclassificationinordertoharmonizeeffortsinmeasuringsourcing.

8.ThepresentManualontheClassificationofBusinessFunctionsreflectsthecom-mentsbytheTechnicalSubgroupandwaspreparedforglobalconsultationinordertoseekendorsementbytheUnitedNationsCommitteeofExpertsonInternationalStatisticalClassificationsandtheStatisticalCommissionin2022.

C.StructureoftheManual

9.TheManualisorganizedasfollows.ChapterIcontainstheintroductionandchapterIIcoverstheunderlyingprinciplesoftheclassificationofbusinessfunctions.TheconceptofbusinessfunctionsandtheiruseinstatisticalsurveysaredescribedinchapterIII.Acriticaldistinctionismadebetweencoreandsupportfunctions,andsomeofthepolicyissuesaddressedbyinternationalsourcingstatisticsareidentified.Priorusesofclassificationsofbusinessfunctionsinstatisticalsurveysarealsoexam-ined.ChapterIVcontainsadescriptionoftheclassificationofbusinessfunctions,whichcomprisesthreelevelsofdisaggregation.Lastly,chapterVcontainsthecon-cludingcommentsandlaysoutthewayforward.Supplements,submittedasseparateExcelfiles,providecorrespondencesbetweentheproposedclassificationofbusinessfunctionsandtheStatisticalClassificationofProductsbyActivity(CPA),theInterna-tionalStandardClassificationofOccupations(ISCO),theStatisticalClassificationofEconomicActivitiesintheEuropeanCommunity(NACE),ISICandCPC.

3

ChapterII

Underlyingprinciplesoftheclassification

A.Purposeandnatureoftheclassification

10.Theprimaryuseoftheclassificationisasatoolforstatisticalanalysis.Itis

aimedatshowinghowenterprisesorganizetheirproductionandsupportingfunc-

tions,and,inparticular,athelpingwithunderstandingglobalizationandglobal

valuechainswheninternationalsourcingoccurs,anddomesticvaluechainswhen

domesticsourcingoccurs.Adoptinganinternationalclassificationforbusinessfunc-

tionsensuresinternationalcomparabilityofstatisticsondomesticandinternational

sourcingandonglobalvaluechains.Themainreasonsforwhichenterprisesengage

ininternationalsourcingandparticipateinglobalvaluechainsaretoreducelabour

andothercosts,accessnewmarketsandspecializedknowledgeortechnologies,and

focusoncorebusiness.Ontheotherhand,barrierstointernationalsourcingand

globalvaluechainactivitiesareoftenrelatedtolegaloradministrativehurdles,taxa-

tionissues,tradebarriersandtariffs,lackofqualifiedlabourinthedomesticmarket

andfinancialconstraints.

B.Scopeoftheclassification

11.Businessfunctionscanbethoughtofasasetoftasksthatenterprisesmustcarry

outregularly,eitherinternallyorexternally,tobringgoodsorservicestothemar-

ket.Examplesofsuchtasksaremanagement,researchanddevelopment,information

technology,marketingandsales,andtransport.Theclassificationofbusinessfunc-

tionsthuscoversallthosetasksandisaimedatcategorizingthemunderthebroader

termofbusinessfunctions.Businessfunctionsaretypicallydifferentiatedfrombusi-

nessprocesses,whichrefertoworkorganizedtemporarilytoachieveaspecificgoal.

C.Statisticalunits,observationalunitsandpopulation

6TheEuropeanUniondefinestheenterpriseas“thesmallest

12.Thestatisticalunitoftheclassificationisrestrictedtotheenterprise,whichis

combinationoflegalunits

definedinthe

SystemofNationalAccounts2008

.Thepopulationcoversonlymarket-

thatisanorganizationalunit

producingenterprises,asonlythosecanhaveacorebusinessfunction(definedasthe

producinggoodsorser-

productionofgoodsorservicesforthemarket).

vices,whichbenefitsfromacertaindegreeofautonomy

13.Anenterpriseisaninstitutionalunitinitscapacityasaproducerofgoodsand

indecision-making,especially

services.Itisaneconomictransactorwithautonomyinrespectoffinancialandinvest-

fortheallocationofitscurrent

mentdecision-making,aswellasauthorityandresponsibilityforallocatingresources

resources.Anenterprisecarries

fortheproductionofgoodsandservices(ISIC,Rev.4,para.77).TheEuropeanUnion’sdefinitionoftheenterpriseisinlinewiththedefinitioninISIC,Rev.4

.6

outoneormoreactivitiesatoneormorelocations.An

enterprisemaybeasolelegal

14.Theenterpriseisastatisticalconstructandnotalegalform.Assuch,itisnot

unit”(CouncilRegulation(EEC)

alwaystheappropriateobservationunit.Consequently,theobservationalunitfor

No.696/93of15March1993

theclassificationofbusinessfunctionsisthelegalunit.However,inmanycases,the

onthestatisticalunitsfortheobservationandanalysisof

enterprisestatisticalunitoftenconsistsofonlyonelegalunit,inwhichcasetheenter-

theproductionsysteminthe

prisecanbesurveyeddirectly.

Community).

4ManualontheClassificationofBusinessFunctions

D.Differencesfromothertypesofclassification

15.Theclassificationofbusinessfunctionsisaclassificationaccordingtothekindofbusinessfunctionsandnotaclassificationofgoodsandservices(e.g.CPC)oractivities(e.g.ISIC).Aunitcancarryoutmultiplebusinessfunctionssimultaneously.Theclassificationofbusinessfunctionsisaimedatgroupingsimilartaskstoformbroaderclassesofbusinessfunctions.

16.Generally,itisimpossibletoestablishaone-to-onecorrespondencebetweenbusinessfunctionsandactivitiesorbusinessfunctionsandproducts,andtheclassi-ficationofbusinessfunctionsisnotdesignedtomeasureproductdataatanydetailedlevel.However,ageneralcorrespondencebetweenbusinessfunctionsandactivitiesorproductscanbecreated,whichwouldmakeiteasiertoidentifybusinessfunc-tions(correspondencetablestoISCO-08,ISIC,Rev.4,andCPC,version2.1,areunderdevelopmentandwillbeprovidedassupplementstothepresentpublicationwhentheyareavailable).

E.Implementationplan

17.Afteritsadoptionattheinternationallevel,theimplementationoftheclassi-ficationofbusinessfunctionswillrequireseveralcoordinatedactivitiestosupportcountriesinitsgradualuseforbothnationalpurposesandglobalreporting.Theplanincludesfourmaincomponents:(a)aninformationcampaigntoraiseawarenessamongcountriesoftheexistenceoftheclassificationanditsbenefits;(b)thedevelop-mentofmethodologicaltoolstoguidedataproducersandusers;(c)technicalassis-tanceprogrammestargetingnationaldataproducers;and(d)theestablishmentofanappropriateorganizationalandinstitutionalframeworkattheinternationalleveltofostertheimplementationoftheclassificationofbusinessfunctions.Inaddition,theimplementationoftheplanwillrequireadditionalresources,theavailabilityofwhichwilldeterminethepaceofcompletion.

5

ChapterIII

Conceptofbusinessfunctionsandtheiruseinstatisticalsurveys

A.Conceptofbusinessfunctions

18.Theconceptofbusinessfunctionsiswellknowninthefieldofmanagement.ItcanbetracedtotheearlyworkofMichaelPorter(1985),whoidentifiedalistofnine“activities”inageneric“valuechain”.Five“primary”activitiesfollowaroughvalueaddedsequence(inboundlogistics,operations,outboundlogistics,marketingandsales,andservice),whilefour“support”activitiesservetheentireorganization(firminfrastructure,humanresources,technologydevelopmentandprocurement).Indi-vidualfunctionscanbefurtherdividedintosubfunctions.

7

19.Inhisgenericmodel,Mr.Porterclearlyincludedactivitiesrelevanttoamanufac-turingenterprise.Still,theconceptwasmeanttobeflexible,withstrategicmanagersusingcategoriesbasedontheactualfunctionscarriedoutwithintheirorganizations.However,theimportanceofhismodelisnotinthespecificlistofactivities(orbusi-nessfunctions)thatitprovides,butintheinfluenceofhisworkandtheworkofhismanyfollowersamongenterprisemanagers,whowereencouragedtoundertakeacarefulanalysisoftheirorganizationsaccordingtospecificfunctionswithinitsvaluechain.Theideawastodividetheactivitiesoftheenterpriseinto“physicallyandtechnologicallydistinctcategories”.

8

Whilethedivisionandsubdivisionofactivitiescouldbecarriedoutadinfinitum,managerswereinstructedtoidentifyactivities

that:(a)haddifferenteconomics(e.g.scaleortransportrequirements);(b)hadahighpotentialimpactofdifferentiation(e.g.activitiesthatcouldprovideacompetitiveadvantageoverrivals);or(c)representedasignificantorgrowingproportionofcosts.

20.Onceidentified,businessfunctionscouldbemeasuredandevaluatedinquan-titativeterms(mostbasicallyintermsofcostsandprofitmarginsforeach),anddeci-sionscouldbetakenregardingexternalorinternalsourcing.

9

Atatimewhenleadingindustries,suchasthecomputerindustry,wereshiftingfroma“vertical”organiza-tionalstructure,wherefirmsperformedmostfunctionsin-house,toa“horizontal”structure,wherefirmsspecializedinspecificfunctionsbasedonanidentified“corecompetence”(PrahaladandHamel,1997),theconceptsdevelopedbyMr.Porterpro-videdamethodforanalysingtheenterpriseinadvanceofmakingcriticaldecisionsaboutwhichfunctionstooutsourceandwhichfunctionstokeepin-house.Whencostsormarketaccesswereanimportantfactor,offshoring

10

wasafavouredstrategy,mainlytolargemarketcountrieswithlowoperatingcosts,suchasChinaandothercountriesinEastAsia(Gereffi,1994;Baldwin,2011).

21.Itthusbecamemorecommonformanagerstoconceiveof,evaluateandmonitortheirorganizationsintermsofaparsimoniouslistoffunctionallydistinctbusinessfunctions(e.g.manufacturingversustransportversusadministration),strategicallyimportant(e.g.researchanddevelopment,productdesignandmarketing)andcostly(e.g.manufacturingandinformationtechnologyservices).Ofcourse,aPorteresque

7Notethat,inMr.Porter’s

framework,an“activity”doesnotrefertotheindustryoftheenterprise,asisthecasein

Europeanbusinessstatistics,buttoamoreorlesscoherentsetoftasksorganizedforan identifiablepurpose,referredtointhepresentManualasa“businessfunction”.

8Thosecategorieswere

expectedtovaryaccording

tothe“[enterprise’s]history,

itsstrategy,itsapproachto

implementingstrategyandtheunderlyingeconomicsoftheactivitiesthemselves”(Porter,1985,p.33).

9Internalsourcing(insourc-

ing)referstosourcingwithintheenterpriseorenterprise

group,whileexternalsourcing(outsourcing)referstosourc-ingoutsidetheenterpriseor

enterprisegroup.Seefigure1foradetailedoverviewandtheglossaryformoreinformationonthedefinitions.

10Similartointernationalsourc-ing.Ithistoricallyrefersto

internationaloutsourcingforcost-cuttingreasons.

6ManualontheClassificationofBusinessFunctions

11Asat4February2019,Mr.

Porterhad421,937citationsonGoogleS