The goal of this study is to analyze the consequences of externalization from the perspective of the employees, contributing to this line of research by examining how externalization influences internal employees’ perceptions toward flexibility. The hypotheses were tested with data collected from 249 internal workers in five organizations. The results of this study indicate that externalization has a negative and significant effect on climate of flexibility among internal workers. The negative consequences decrease in a context of group potency. However, these negative effects increase among employees with greater supervisory responsibility.