Authors: Constance Buah
Lecturer, Department of Marketing, Procurement & Supply Chain Management,
University College of Management Studies, Accra, Ghana
email: constanceekuabuah@yahoo.com
Statement of the problem
Outsourcing has been one of the major strategies that companies utilize in order to remain competitive in the current dynamic environment. Several organizations and institutions have adopted outsourcing of some of the value chain activities to third parties. This is due to the benefits resulting from such as lower cost, better customer satisfaction and more importantly freeing the management to concentrate on the more strategic issues by ceding the non-core functions to specialized firms (Andersson and Norman, 2012). While many firms have adopted the outsourcing strategy in their operations to improve their competitiveness, others have not, leading many to ask what driving factors influence the decision to use outsourcing and how such outsourcing improves organizational performance. Past studies examining the impact of outsourcing have identified several main benefits of outsourcing. these includes cost reduced internal capital investment (Ghodsypour et al, 2014) and better readiness to respond to turbulence in the business environment and improved service delivery (Lawson, Tyler & Potter, 2014). Other benefits of outsourcing include an increased focus on core competencies (Beaumont and Sohal, 2014), better and improving quality of goods and services (Hamel et al, 2014), and reduced risk of technology change (Bruce and Shermer, 2012). Biggam and Iravo (2013) studied outsourcing at Societal Generale (SG) Bank Limited, a company in the Banking industry. They found that outsourcing for cost saving positively impacted the company’s performance through reduction of labor and operational costs, hence improved profitability. Societal Generale (SG) Bank Limited have outsource some of their business activities such as selling shares and provision loan services as a way of up scaling they performance. However, they have not fully realized the full benefit of outsourcing. For example, they are persistent complaints from the public regarding services Societal Generale (SG) Bank Limited provides, such as lowly service delivery, supply of substandard equipment, delayed restoration of service, unreliable service levels among others (Adler, 2013). If the dissatisfaction is not addressed, Societal Generale (SG) Bank Limited will lose its customers to their competitors and will close down. There has been no major study on effects of outsourcing on cost efficiency, productivity and profitability of Societal Generale (SG) Bank Limited.
Keywords: Outsourcing, Sourcing, Outsourcing Strategies, Human Resource Tactics
