Assessing the effect of outsourcing on organizational Performance: A case study of Metro Mass Transit Ltd
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Date
2021-06-30
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Abstract
Outsourcing is defined as the strategic use of outside resources to perform
activities traditionally handled by internal staff and resources. The key reason
for outsourcing includes the financial reasons such as cost reduction. The aim of
the study was to critically examine the effects of outsourcing on organizational
performance in Metro Mass Transit Limited. Three objectives were set to help
achieve the aim of the study. The study adopted a quantitative method of
enquiry with questionnaires designed to help achieve the aim and objectives of
the study. SPSS version 20 was used in analysing the data gathered from the
respondents and Cronbach Alpha was used to test for the reliability and validity
of the data gathered from the respondents. Findings from the survey revealed
that Metro Mass Transit Unit outsource the cleaning of their facilities, security
personnel, Information Technology services/functions, facility management and
some human resource functions. From the survey, the respondents at Metro
Mass Transit Unit identified some of the impact of the outsourced functions on
their company’s profitability; they have time to focus on their core functions
which has allowed them to remain competitive, and innovativeness by coming
up with new ways of discharging their core duties. Also, there has been an
improvement in the discharge of their duties since they have resources that help
them to focus on their main activities. Also, some of the effects that Metro Mass
Transit has experienced from outsourcing are; they have markedly high market
share, their customers are increasingly getting satisfied with their products,
there has been a significant reduction of expenditures in the institution as a
result of outsourcing, the growth of the firm has been steady and very
satisfactory in terms of return on investment and sales and performance of the
business is satisfactory. It is however recommended that that a need analysis
must be conducted to ascertain whether outsourcing is necessary before
implementing it and a thorough background study should be conducted on the
outsourcing vendors to know their capabilities and abilities before contracting
them so as to avoid any substandard work .
Description
A thesis submitted to the Department of Construction Technology and Management, Kwame Nkrumah University of Science and Technology, in Kumasi in partial fulfillment of the requirements for the Award Degree of Master of Science.
Keywords
Outsourcing, Organisational Performance, Core functions