Effect of Outsourcing Strategies on Organizational Performance of SMEs: Study of selected Fst Foods Business in Abuja

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Abstract

Outsourcing is a management strategy by which an organization delegates major or non-core business functions to specialized and efficient service provider. This paper examines outsourcing service as a strategic tool for organizational performance of small and medium enterprises using data from ten (15) fast food businesses operating in Abuja, Nigeria. Statistical methods developed to test the formulated hypotheses and analyse data collected is the Pearson moment correlation on SPSS version 20. However, the results show that the more an organization outsourced, the higher its organizational performance, and organizational productivity are positively correlated to the amelioration of competitive advantage of labour productivity and average production cost. The paper also revealed that outsourcing is beneficial to organizational performance, and enhances firm’s financial economies and competitive advantage in the market place. Therefore, Organization should develop a comprehensive plan to clarify strategic outsourcing objectives, expectations, and requirements towards their outsourcing function.

Keywords: Small and Medium Enterprises (SMEs), Competitive Advantage, Organizational Performance, Outsourcing Strategy.

1.0INTRODUCTION

1.1Statement of Problem2

1.2Objective of the Study3

1.3Research Hypothesis3

1.4Background of the Study3

2.0LITERATURE REVIEW

2.1Conceptual framework of the study4

2.1.1The Concept of Business strategies6

2.1.2The essence of strategic outsourcing7

2.1.3Linking outsourcing to business strategy 8

2.2 Theoretical framework

2.2.1Outsourcing and organizational Performance 10

2.2.2Outsourcing, Business Strategies and organizational Performance 11

2.3Empirical Review 11

3.0RESEARCH METHODOLOGY

3.1Research Design13

3.2Method of Data Collection 13

3.3Method of Data Analysis14

3.4Data Presentation and Analysis14

3.5Discussion of Findings16

3.6Conclusion16

3.7Recommendations17

References18-20

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Effect of Outsourcing Strategies on Organizational Performance of SMEs: Study of selected Fst Foods Business in Abuja

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