The impact of outsourcing revenue collection on the financial position of MMDAs in Ashanti Region

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AUGUST, 2016
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Outsourcing has become an important approach to generate value - when products or services are produced more effectively and efficiently by outside suppliers. This study identified; the reasons why MMDAs outsource revenue collection, the effectiveness of revenue collection agents, the effects of outsourcing revenue collection and the challenges associated with outsourcing revenue collection. Purposive sampling was adopted in selecting three (3) case study organizations whilst convenience sampling was also adopted to select one hundred respondents in Ashanti Region-Ghana. It came to light that the main reasons why MMDAs relied on private revenue collection agents were: difficulty in collecting revenues, the inability of MMDA revenue collection staff to widen their scope of reach or properly track areas of economic activities and poor record keeping. The study also revealed that the impact of the private revenue collectors on the volumes of revenues generated by the MMDAs is positive and significant. Revenue collection outsourcing help MMDAs to concentrate on the core organizational activities, assist in improved service delivery and also cut cost on human resource. Major risks encountered by MMDA’s in the outsourcing transaction are fraud, robbery and theft cases. From the perspective of the private revenue collectors, lack of revenue collection equipment, high operational costs and personnel shortage are challenges identified. Based on the research findings, the following recommendations are offered; that MMDAs select the best contractors and partners for the revenue collection activities, that MMDAs monitor and assess performance during and at the end of the contract for necessary review, termination ire engagement, and that MMDAs state their expectations of the outsourcing agreement clearly.
A thesis submitted to the Department of Marketing and Corporate Strategy, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Business Administration (Strategic Management Option),