The Effects Of Outsourcing Service On Institution Performance: (The Case Of Addis Ababa University)
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Date
2019-05
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Addis Ababa University
Abstract
The research examined the effects of outsourcing on the performance of organizations. Substantial uncertainties remain as to how outsourcing practices affect organizational outcomes, whether some practices have stronger effects than others, and whether complementary or synergies among such practices can further enhance organizational performance. The objectives of the study were to identify the reasons for outsourcing, to measure the effects of the outsourced activities on the organizations performance and to determine the key benefits gained and challenges faced from outsourcing noncore business functions. The methodology was based on Descriptive survey method with the procedures of quantitative and qualitative (mixed method) research designs to analyze the data collected from the selected campuses. The research employed the use of questionnaires which included the rating scale which was easier to administer to the respondents and also saved time. The key factors that influenced the choice to outsource a function/activity by management were to allow staff to concentrate on the core activities and to reduce cost. It also emerge that, the key benefits gained from both security and cleaning functions was to focus on core functions, reduce cost, increase flexibility and improve organizational performance. On the other hand the challenges faced while outsourcing those functions was the misalignment between the requirement of the AAU and the service provider, AAU did not set an evaluation criteria to measure the performance of the service provider and the challenges related to controlling the staffs during working hour. So using the above issues Setting well formulated service level agreement (SLA) in which a company helps to evaluate the service of a vendor and good service can be easily differentiated from bad service. The service provider needs to control the staffs during working hour using different controlling mechanisms such as giving rewards to staffs who are working properly. But the university also must establish formal groups in each campus who control and report the service provided by the service provider
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outsourcing, outsourcing functions, focus on core functions, service level agreement