Effects of Outsourcing Practices on : The Operational Performance the Case of Ethiopian Airlines
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Date
2024-06
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Addis Ababa University
Abstract
The concept and practice of outsourcing is growing rapidly all over the world. As organizations see it as an opportunity to achieve strategic goals, improve customer satisfaction, and bring efficiency and effectiveness to operations. This study was based on the following general objectives: to investigate the practice of strategic outsourcing and its impact on the operational performance of ET-MRO. This study used both descriptive and explanatory research designs. The target group for the study was the employees of the Ethiopian MRO business unit working under the CFO of Ethiopian Airlines Group and the purchasing and supply chain management team. For data collection, questionnaire was distributed to 75 employees, management and external individuals were randomly selected for tailored interviews. Data collected from surveys and interviews were analysed using SPSS. In order to verify the validity of the research instruments, the researcher asked for an expert opinion from two senior management employees who were not included in the final study, and a reliability test was also conducted using SPSS. The results of the study were presented in detail using both descriptive and inferential statistics. The finding revealed that there is a gap between the best practices of outsourcing and the current practice of Ethiopian Airlines, especially in relation to company selection and total cost ownership and contract management. Based on the answer to the respondents question and the summary result of the three outsourcings, the study concludes that current outsourcing practices affect the efficiency of ET-MRO operations. The study showed opportunities for improvement in strengthening strategic acidification practices. Based on this, recommendations are made both for practice and for future research aimed at improving performance.
Keywords: Outsourcing Practice, Operational Performance, Company Selection, Contract Management and Total Cost of Ownership