The effect of outsourcing noncore business functions on company’s performance: The case of Wegagen bank s.c

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Addis Ababa University


The basic importance of outsourcing are focus on basic functions reducing of cost, develop employ experience, to enhance performance, and flexibility. But the outsourcing experience of Wegagen bank S.c is faced different Weaknesses such as; Poor potential of the service providers, staff members of outsourced function lacks professional concepts and experience, that staff members of outsourced functions lacks organizational commitment and have ethical problems due to this it increases risks. This paper was designed to identify effect of outsourcing noncore business functions on the company’s performance the case of Wegagen bank S.c. Resources were collected through questionnaire, interview and different internal documents of the bank with several limitations like financial constraints, the problem of covid-19 and time constraints. Descriptive statistics, Mean and frequency were used to analyze the data. Interpretation is made on the mean, frequency and percentage of data. The finding of the study determines that the bank outsources the security and cleaning activities and it makes reduce costs, get concentrate on their core activities and avoid different investments in human resource. At the end the researcher of this study suggests that the bank should focus to minimize the impact of outsourcing on delivering quality service, increasing satisfaction and improving competitiveness and efficiency.



Outsourcing, performance, customer, satisfaction