Effects of outsourcing on organizational performance, the case of selected financial institutions in Kumasi

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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 find out the types of activities outsourced by the organizations, the reasons for outsourcing and to evaluate the effects of the outsourced activities on the organizations performance. The methodology was based on qualitative and quantitative analysis of the financial data of the selected institutions for a period of four years and the use of other moderating factors to help evaluate the organizations performance. The research employed the use of questionnaires which included the dichotomous and the rating scale which was easier to administer to the respondents and also saved time. The main function or personnel being outsourced that emerged from the study was security and then cleaning activity. These outsourced functions cut across all the institutions selected for the study. It also emerged that, the key factors that influenced the choice to outsource a function/activity by management was to reduce cost and also to allow staff to concentrate on the core activities of the institutions. The activities outsourced were peripheral activities that could easily be peeled off without much disorientation to the whole organizational set up. Security was found to be the most outsourced function and interestingly there is a spring up of many security companies. Government is therefore entreated to formulate policies to enhance the operations of these companies to enable them create job opportunities to our teeming unemployed youth to help develop Ghana.
A thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of MASTER OFBUSINESS ADMINISTRATION. 2012