The Effect of Outsourcing on a Company’s Performance: In a Case of Zemen Bank S.C.,
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Date
2023-06
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Addis Ababa University
Abstract
The purpose of the study was to examine the effect of outsourcing on company performance in case of Zemen Bank with particular reference to head office. The objectives of the Study were to analyze the effect of cost-driven outsourcing on performance. Descriptive survey design was used in the research. The target population of 477 was drawn from the Professional Staff, Non Professional staffs and Managerial Staff, Zemen Bank head office using stratified random sampling and purposive sampling respectively. A sample size of 143 respondents was selected from the target population through simple random and purposive sampling techniques. The research instruments used in the study were questionnaires and interview schedule. Both content and construct validity of the research instruments was obtained. Qualitative data was recorded verbatim, transcribed and recorded in themes and sub-them. Questionnaires were used to gather data from the professional and non-professional staff while top management involved the use of interview schedule. Pilot testing of the study instruments was conducted. Cronbach’s Alpha of Co-efficiency of at least 0.7 was obtained. From the analysis, the research instruments obtained an Alpha of co-efficiency of at least 0.907 which was within the minimum recommended in social sciences. Data analysis involved the use of statistical package for social sciences, SPSS, version 25. Both descriptive and inferential statistics was used in data analysis. Descriptive statistics included the use of frequency, percentages and mean while inferential statistics included the use of correlation, mathematical regression model, ANOVA test and multiple regressions analysis. As Pearson correlation coefficient result shows that there is positive and significant relationship between organization performance and focus - driven outsourcing (r= .178, P < 0.01). And between organization performance and quality- driven outsourcing(r = .350, p < 0.01. Focus and the performance of the bank is satisfactory have a significant moderate positive relationship as shown by correlation coefficient of (r= .403, P < 0.01). There is a significant positive relationship between quality and the performance of the bank is satisfactory (r = .350, p < 0.01). According to the regression analysis shows that one unit increases in cost driven 0.157.The result of quality driven outsourcing results in an increase 0.666. The final result 0.003 shows that one unit increase in the focus driven outsourcing results in an increase in Organizational performance by a factor of 0.003. Finally the researcher recommended Zemen Bank should outsource with a clear picture in mind as to why they want to outsource. Data was presented in the form of tables and cross tabulation. Data analysis was done at 95% confidence level and 0.5% significance. Key Words: key words: Outsourcing, Core Function, Organizational performance
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Outsourcing