Outsourcing Strategy as a Viable Determinant of Organizational Performance: Evidence from Telecommunication Companies in Nigeria

Abstract

The study aimed to determine how outsourcing core functions influence performance in relation to cost reduction, risk reduction, quality improvement and organizational efficiency of selected companies in the Nigeria telecommunications sector. Descriptive research design was adopted for the study, and census survey was used in determining the population made up 88 management and technical staff that are involved in outsourcing decisions and implementation. Structured questionnaires was used for data collection, and SPSS tool was used to quantitatively analyze the   data   using regression analysis to establish the relationship between outsourcing core functions, and performance of the organizations looking at cost reduction, risk reduction, quality improvement and organizational efficiency. The outcome indicated a strong positive relationship between Cost reduction and performance, weak positive relationship between Quality improvement, Organizational efficiency and performance, and a moderate positive relationship between Risk Reduction and performance The study therefore recommends that companies should concentrate on their core functions for competitive advantage and sustainability, and outsource non-core functions to free resources for value optimization, Firms should monitor outsourcing contracts for better performance, and conduct situational analysis before taking outsourcing decisions irrespective of whether they are core or non-core functions for efficiency and value optimization.

Keywords: Core functions, Cost Reduction Non- core functions, Outsourcing, Performance.

DOI: 10.7176/EJBM/12-2-11

Publication date: January 31^st 2020