Assessment of Opportunities and Challenges of outsourcing Practice: In Case of Bunna Bank
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Date
2022-06
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Addis Ababa University
Abstract
The emergence of globalization has made outsourcing to become one of the widely embraced business strategies for delivering outstanding services to consumers in banking sector. The study aims to assess the opportunities and challenges of outsourcing in Buna Bank. The research objectives were to explore the opportunities obtained as a result of outsourcing, to examine the challenges encountered in carrying out outsourcing and explore the impacts of outsourcing. The research applied descriptive research design and both qualitative and quantitative research approach and data was collected from employees of the bank through simple random sampling and uses descriptive data analysis methods. The findings show that the Bank outsources to access special expertise, reduce overhead and operational costs; spread commercial risk and get adequate time to concentrate on their core activities. The bank has also faced with varied challenges from outsourcing such as loss of control, unethical employee behavior, and conflict of interest among outsourced and permanent employees, low employee belongingness, low quality of service provided, higher costs, communication and coordination difficulty, continuous increase in prices. Thus, based on the findings of the study, the research recommended that the bank has to properly identify outsourced services, design frequent monitoring scheme, resolve conflict of interest and identify properly the service provider in order to gain the demanded benefits out of outsourcing.
Keywords: Outsourcing, Challenges, Opportunities, Bank Service, Buna bank