Strategic outsourcing at Anglogold Ashanti: a success or failure.

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
Mining companies are continuously looking to implement newer operation models into practice, finding more ways of increasing productivity, reducing costs and improving effectiveness. Environmental and contextual changes presents a number of competitive challenges to organizations with new trends and patterns emerging and giving rise to a new economy influenced by the new factors that are changing the work system. In mining and mineral business, the worldwide usage and importance of outsourcing has grown dramatically over the last decades. Outsourcing is only one possible solution to the problem and a strategy practiced by many management teams. This study aims at investigating how successful outsourcing has been at AngloGold Ashanti Obuasi mine. This work pursues a descriptive strategy. Primary data was collected from twenty-five (25) key staff of the procurement division of AngloGold Ashanti using questionnaires, semi-structured interviews and observation from the staff and management of the procurement division of AngloGold Ashanti, Obuasi mine. Data was coded and analyzed by the use of SPSS and Excel. Outsourcing in the mine has been overall a success tactically and operationally as it has improved the quality of operations, helped reduce cost and improved company focus. The company relies heavily on general vendor contract arrangements with outsourced firms to manage and control work outsourced. Primarily, reliability and credibility of prospective supplier firms provides the framework for contracting and building a strong partnership. The mine outsources key supporting work for which they have not the expertise like shaft maintenance and transport of materials and security. The focus is on keeping their core business in-house. Outsourcing however has brought its own challenges of laid of staff and loss of employee morale for those retained. It is recommended largely that the mine focuses more on building strategic alliances with other firms as it opens up the opportunity of tapping into other strengths whilst reducing your risks. The company must aim to use outsourcing proactively through a stronger focus on internal core business areas as a way to improve performance, generate employee commitment and consequently increase competitiveness and profitability. This presupposes that management creates a culture in the organization that enhances the core business and recognizes the benefits of outsourcing complementary competencies.
A Thesis submitted to the department of Marketing and Corporate Strategy of the Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirements for the degree of Master of Business Administration (Sm &Mc Option) School of Business, KNUST College of Humanities and Social Sciences.