Abstract

The problem which led to the development of this topic was that despite the steps taken, the contribution of outsourcing to organizational performance is still low. From this problem, the following objectives were raised: to determine the contribution of multi outsourcing, offshore outsourcing and onshore outsourcing on the performance of an organization. This led to the raising of the following questions; does multi outsourcing, offshore outsourcing and onshore outsourcing contribute to the performance of an organization.

Moreover, our research approach was based on the quantitative method and the data was collected from both primary and secondary sources of data. In order to properly collect our data, we made use of a questionnaire and once the data was collected, the data was then analyzed by using the SPSS, linear regression method. In order to resolve our problem stated above, we had to raise the following hypothesis which comprised of null and alternative hypothesis.

The null states that multi, offshore and onshore outsourcing has no significant relationship on the performance of an organization while the alternative states that multi, offshore and onshore has a significant relationship on the performance of an organization. These hypotheses were then tested by using the Pearson correlation. The first hypothesis was that outsourcing has no significant relationship to the performance of an organization and the result was that it has a significant relationship to the performance of an organization.

The second hypothesis was that, multi outsourcing has no significant relationship on to the performance of an organization and the result was that it has a significant relationship to the performance of an organization. And finally, the third hypothesis stated that offshore outsourcing has no significant relationship on to the performance of an organization and the result was that it has a significant relationship on to the performance of an organization. This is because the decision rule of the Pearson correlation states that, reject the null hypothesis when the p-value is lesser than the level of significance and accept the alternative hypothesis of which from our results above, their p-values happened to be lesser than the significant level thus the reason for the rejection of the null hypothesis, and rather the validation of the alternative hypothesis.

From page 45 where the hypothesis was analyzed, and the values on table 11 showed that 69% of the respondents agreed on the contribution of outsourcing to the performance of an organization, this therefore, means that the null was rejected and the alternative was validated which therefore means that outsourcing has a contribution to the performance of an organization.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The theoretical idea over outsourcing became more popular when supply chain literature started to argue that the corporation as a business entity should hire some parties so as to improve organisational performance (Harris & de Chernatony, 2011). The American Marketing Association (2016) defined outsourcing as a method of conducting business in which the organisation contracts with a third party to perform work, manage operations, or offer services on behalf of the firm. To improve organisational performance organisations should adopt outsourcing. This is consistent with Lahrech, Alabdulwahad & Bouayach (2020) who affirmed that outsourcing results in increased efficiency. If an organisation embarks on outsourcing it can attain a service that is more productive, more efficient, and frequently of a higher quality. Organizations are adopting outsourcing so as to reduce costs and improve organisational performance (Bickerton, 2010).

Outsourcing has emerged as a pivotal strategy for organizations seeking to enhance efficiency, reduce costs, and focus on core competencies. Defined as the practice of delegating specific business processes or functions to external service providers, outsourcing allows organizations to leverage expertise and resources that may not be available in-house. This practice spans various functions, including information technology, human resources, customer service, and manufacturing, among others.

The contribution of outsourcing to organizational performance has been a subject of extensive research and discussion among scholars and practitioners. Authors such as Michael Porter (1985) emphasized the importance of competitive advantage, suggesting that organizations can improve their performance by outsourcing non-core activities to focus on their strengths. Similarly, Quinn and Hilmer (1994) argued that outsourcing can lead to increased flexibility and innovation, enabling organizations to respond more rapidly to market changes.

Another significant contribution comes from Lacity and Hirschheim (1993), who conducted a comprehensive review of outsourcing literature, identifying both the potential benefits and risks associated with the practice. They noted that while outsourcing can lead to cost savings and access to specialized skills, it also introduces challenges such as dependency on third-party providers and potential quality control issues.

1.1.1 Historical Background of the Study

Since the Industrial Revolution, companies have grappled with how they can exploit their competitive advantage to increase their markets and their profits. The model for most of the 20th century was a large integrated company that can “own, manage, and directly control” its assets. In the 1950s and 1960s, the rallying cry was diversification to broaden corporate bases and take advantage of economies of scale. By diversifying, companies expected to protect profits, even though expansion required multiple layers of management. Subsequently, organizations attempting to compete globally in the 1970s and 1980s were handicapped by a lack of agility that resulted from bloated management structures. To increase their flexibility and creativity, many large companies developed a new strategy of focusing on their core business, which required identifying critical processes and deciding which could be outsourced.

Outsourcing was not formally identified as a business strategy until 1989 (Mullin, 1996). However, most organizations were not totally self-sufficient; they outsourced those functions for which they had no competency internally. Publishers, for example, have often purchased composition, printing, and fulfillment services. The use of external suppliers for these essential but ancillary services might be termed the baseline stage in the evolution of outsourcing.

Outsourcing support services is the next stage. In the 1990s, as organizations began to focus more on cost-saving measures, they started to outsource those functions necessary to run a company but not related specifically to the core business. Managers contracted with emerging service companies to deliver accounting, human resources, data processing, internal mail distribution, security, plant maintenance, and the like as a matter of “good housekeeping”. Outsourcing components to affect cost savings in key functions is yet another stage as managers seek to improve their finances.

The current stage in the evolution of outsourcing is the development of strategic partnerships. Until recently it had been axiomatic that no organization would outsource core competencies, those functions that give the company a strategic advantage or make it unique. Often a core competency is also defined as any function that gets close to customers. In the 1990s, outsourcing some core functions may be good strategy, not anathema. For example, some organizations outsource customer service, precisely because it is so important.

Eastman Kodak’s decision to outsource the information technology systems that undergird its business was considered revolutionary in 1989, but it was actually the result of rethinking what their business was about. They were quickly followed by dozens of major corporations whose managers had determined it was not necessary to own the technology to get access to information they needed. The focus today is less on ownership and more on developing strategic partnerships to bring about enhanced results. Consequently, organizations are likely to select outsourcing more on the basis of who can deliver more effective results for a specific function than on whether the function is core or commodity.

1.2 Statement of the problem

Outsourcing is often pursued with the primary goal of enhancing operational efficiency. By delegating non-core functions to specialized providers, organizations can streamline their processes, reduce operational costs, and allocate resources more effectively. However, the extent to which outsourcing actually leads to significant performance improvements can vary widely among companies as stipulated by Lacity, M. C., & Willcocks, L. P. (2016).,

In their comprehensive analysis of outsourcing trends, Lacity and Willcocks explored the evolving nature of outsourcing relationships and their implications for organizational performance.

They emphasized the importance of effective governance structures and the alignment of objectives between organizations and their outsourcing partners. Their work highlights the challenges organizations face in managing outsourcing types like multu sourcing, offshore outsourcing and onshore outsourcing has a paramount effect in the general organizational performance as stipulated by (Step M. Anger, 2016). All these parameters let to the fall in quality control and dependency issues. By addressing these challenges, they provide insights into how organizations can optimize outsourcing to enhance performance, making their research highly relevant to the problem statement.

Factors influencing and types of outsourcing affecting the variabilities include the choice of outsourcing partners, the nature of the outsourced functions, and the effectiveness of the management strategies employed have been a great problem which affect organizational performance Jeyaraj et al. (2006).

While outsourcing can offer numerous advantages, it also presents challenges that organizations must address to maximize benefits. Key challenges include: If the objectives of the outsourcing provider and the contracting organization are not aligned, it can lead to misunderstandings, unmet expectations, and ultimately, poor performance outcomes.

Maintaining quality standards can be difficult when functions are outsourced, particularly if the provider does not adhere to the same quality benchmarks as the organization. Over-reliance on outsourcing partners can create vulnerabilities. Organizations may become dependent on their providers for critical functions, which can pose risks if the provider faces disruptions.

Outsourcing can foster innovation by allowing organizations to tap into external expertise and new ideas that may not exist internally. However, the relationship between outsourcing and innovation is complex. While some companies report increased innovation as a result of outsourcing, others may experience stagnation if the outsourced functions become too routine or if there is insufficient collaboration between the organization and its providers. Understanding how to cultivate an innovative culture while leveraging outsourcing is essential for organizations seeking a competitive edge.

The risks associated with outsourcing, such as data security breaches, compliance issues, and potential disruptions in service, must be carefully managed. Organizations need to develop comprehensive risk management frameworks that include;e Thoroughly vetting potential outsourcing partners to assess their capabilities, reliability, and adherence to industry standards., Contractual Agreement Establishing clear contracts that outline expectations, quality standards, and accountability measures.

Regularly monitoring the performance of outsourcing partners and conducting evaluations to ensure compliance with agreed-upon standards and objectives.

The rapid advancement of technology, particularly in areas such as artificial intelligence (AI), machine learning, and automation, is transforming the outsourcing landscape. Organizations must consider how these technologies can enhance their outsourcing strategies. For instance, AI can automate routine tasks, improve data analysis, and enhance decision-making processes. However, the integration of technology into outsourcing relationships also raises questions about job displacement, ethical considerations, and the need for new skill sets among employees.

The COVID-19 pandemic has significantly reshaped the way organizations approach outsourcing. Companies have had to adapt their strategies to ensure business continuity and resilience in the face of global disruptions. This has led to a re-evaluation of outsourcing relationships, with many organizations seeking more flexible and agile partnerships. Understanding how the pandemic has influenced outsourcing trends and practices is crucial for organizations looking to navigate future uncertainties.

1.3 Research Questions

What is the contribution of outsourcing to the organizational performance of CAMAS-DOUALA.

1.3.1 Specific Questions

1. Does multi-sourcing contribute to the organizational performance of CAMAS-DOUALA?
2. Does offshore outsourcing contribute to the organizational performance of CAMAS-DOUALA?
3. Does onshore outsourcing contribute to the organizational performance of CAMAS-DOUALA?

Check Out: Transport & Logistics Project Topics with Materials