Effect of outsourcing on organizational performance on selected organizations in Ethiopia
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Date
2021-06
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A.A.U
Abstract
The study sought to understand the effect of outsourcing on organizational performance on selected organizations in Ethiopia. Descriptive and inferential research design Technique is implemented on this research. Qualitative data is obtained from interview and the quantitative data is obtained from statistical results of distributed questionnaires. A sample size of 152 is drawn from population size of 250. The researcher used a simple random and purposive sampling technique to collect data. The Cronbach alpha test was used to test the reliability of the instruments. To estimate the relationship between outsourcing and organizational performance Pearson correlation and multiple linear regression analysis were employed. Descriptive statistics, correlation analysis and regression analysis were used to analyze the data collected from respondents. From the correlation matrix there is a significantly positive relationship between the dependent variable Performance and the independent variables (Facility management outsourcing, Human- resource outsourcing and Information technology outsourcing). Further the result also shows that the independent variables (Information Technology outsourcing, Human resource Outsourcing and Facility management outsourcing) have a significant influence on organizational performance. According to the conducted descriptive analysis, the independent variables have effect on organizational performance with regard to reducing operational cost, reducing administrative burden, increasing focus on core activities of the organization, delivering work within the required time frame work and in meeting customer requirements. However, lack of positive competitors and lack of clear legal framework is the main challenge for the organizations. The study recommends that Organization in Ethiopia should be encouraged to implement outsourcing so that they can focus on their core functions, reduce cost and increase focus on core activities ultimately increase the performance of organization. Government should state a clear legal frame work and more vendors should be encouraged to enter the outsourcing industry.
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Keywords
Outsourcing, Information Technology outsourcing