Effect of Outsourcing Transport Service on Company Performance: Case of Panafric Global
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Date
2-06
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Addis Ababa University
Abstract
search design. The researcher included 82 respondents using random
sampling. Data was gathered through a questionnaire and the qualitative result was
analyzed using mean, percentage, and multiple linear regressions. The study explains
the reason Panafric Global was engaged in contracting external transport companies
was to reduce cost, capital investment in resources, improve flexibility, and offer
service on demand.
Further, the result indicates that Panafric Global has gained profit from outsourcing
in terms of reducing capital investment and efficient utilization of the company’s
assets. But, it also indicated that the company encountered challenges by outsourcing
transportation services. Challenges observed in the study were loss of control,
information asymmetry, and poor service quality provided by the outside company.
In order to improve the company performance, it’s recommended to review the
current working procedures and conditions in the contracts Panafric has with the
external transporter. Also, it is recommended to build a relationship with the external
transporters and monitor the outsourcing practice to examine the risks and benefits
from time to time. Finally, it's recommended for the company to arrange training for
concerned teams to enable the employees to expand the required skill to manage the
contracted companies
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Keywords
Outsourcing, Transport service, Company Performance