The Relationship Between Outsourcing And Organizational Performance

Abstract

The purpose of this study is to examine the relationship between outsourcing and organizational performance in the services sector. The population of the study is made up of 50 firms operating in the banking and insurance sectors of the economy of Ghana. The paper used purposive sampling for the selection of the respondents. Questionnaires were distributed to the respondents for statistical analysis. The study utilized Statistical Package for the Social Sciences (SPSS) to analyze the data collected. The study revealed a number of findings including: there is no statistically significant correlation between outsourcing and organizational productivity, there is statistically significant correlation between outsourcing and quality, there is statistically significant correlation between outsourcing and competitive advantage. Based on the findings, some recommendations were made most importantly: there must be thorough background check before outsourcing, and organizations must also have a back-up system to avoid losing vital data as a result of incompetence on the part of the external supplier.

Keywords: outsourcing, organizational performance, competitive advantage, resources, productivity, quality, off shoring