This review looks at a selection of research, studies and articles that are available in the area of outsourcing, and specifically the effect it has on the overall productivity of the business doing the outsourcing. Common themes were found throughout the literature. The first theme is that the effects of outsourcing on productivity, whether positive or negative, depend largely on the size of the business in question, the function that is outsourced and the industry the firm trades in. The second common theme and major factor when discussing the effects, is the common mistake made by management that profitability is productivity. This mistake is often made when a manager assumes that because their business can save by outsourcing to improve profitability, then the overall productivity of the business will increase as a result. Cases from the literature are used to illustrate the effects of outsourcing.