Outsourcing and Performance of Selected Deposit Money Banks in Anambra State

International Journal of Economics and Management Studies

© 2019 by SSRG - IJEMS Journal

Volume 6 Issue 4

Year of Publication : 2019

Authors : Nnadozie .C Nnaji-Ihedinmah, Adaobi, O. Godwin, Sylvanus Ndu Chukwu

10.14445/23939125/IJEMS-V6I4P107

How to Cite?

Nnadozie .C Nnaji-Ihedinmah, Adaobi, O. Godwin, Sylvanus Ndu Chukwu, "Outsourcing and Performance of Selected Deposit Money Banks in Anambra State," SSRG International Journal of Economics and Management Studies, vol. 6,  no. 4, pp. 46-53, 2019. Crossref, https://doi.org/10.14445/23939125/IJEMS-V6I4P107

Abstract:

Globalization has pushed back the frontiers of knowledge of firms while increasing the pressure for managers to deliver results and ensuring optimum utilization of firm resources and efficiency of their operations. Outsourcing has traditionally been seen to focus on cost reduction, but recent studies have revealed that it goes beyond cost to include specialization in areas of core competence. The decision to either integrate or resort to the market for competencies has resulted in many challenges ranging from improper implementation of outsourcing strategies to difficulties in managing vendor relationship. This study therefore examines the influence of outsourcing on the performance of selected Deposit Money Banks in Anambra State. The study measures performance in terms of competitiveness while material inputs, external contract work and other costs not related to production, were used to proxy outsourcing. Data for the study were collected using structured questionnaire administered to employees of four different banks in Anambra State, while ordinary least square (OLS) method and principal component analysis were used. The result shows that outsourcing activities enhance the competitiveness of the selected banks. The study noted that since globalization has resulted in the dispersal of knowledge beyond firm and industry boundaries, firms should pursue cost reduction strategies by focusing on areas of core competence while accessing the market for services or functions in areas where they do not have competencies.

Keywords:

Outsourcing, Resource capability, Transaction cost, Vertical Integration and Market Orientation.

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