Empirical Analysis of Outsourcing as a Strategic Tool for Organizational Efficiency

Abstract

Outsourcing is fundamentally a business strategy in which organizations hire the services of external vendors or entity to perform specific jobs and duties on its behalf. The successes of most organizations depend on how their strategies are being implemented. The broad objective of this study is to analyze the role outsourcing plays in achieving Organizational Efficiency in Eastern Metal Company Ltd, Issele-Azagba, Delta State, Nigeria.  The specific objectives are to: Ascertain how quality products can lead to profitability and determine how improved technology reduces organizational cost. The research questions and hypotheses are in-line with the objectives of the study. Structured questionnaire were used for data generation, Chi-square statistical tool was used to test the hypotheses; based on the result, it was found out that Quality products significantly enhanced organizational profitability; while Improved technology significantly reduces organizational cost. The study concluded that Outsourcing is an Organizational Strategy with two edged sword, it affects both the organizations and employees in the following ways: for the organization; it eliminates some form of excesses and enhances prudence which further snowballs into organizational efficiency. Nevertheless it also has some adverse effects to the firm in the area of employee commitment and loyalty because most Employees feel that they are not valued by the organization which prompts some form of lackadaisical attitudes. For the employee; they have the feeling of job insecurity and this triggers some form of emotional imbalance which reduces their productivity. The study recommends that Organizations should strategically diagnose the types of outsourcing method that is being employed to ascertain if it will pose any form of threat and being disadvantageous to the health of the organization.