The impact of outsourcing in the tobacco industry in Malawi (A case of Alliance One Tobacco Malawi Limited)

Outsourcing concept is not very old concept in the Malawi Tobacco Industry, however outsourcing practice was adopted in the late 2000 hence it‟s not fully develop in the Tobacco Industry in Malawi although most of the organizations already embarked on the strategy but not fully fragged. Outsourcing implemented by AOTM as one of their strategic choices in order to concentrate on its core activities which include growing, processing and shipping of tobacco among other activities and this applies to other tobacco companies in the industry who are striving to serve their customers beyond their expectations. AOTM through outsourcing they expected a number of benefits which include cost savings and better quality products and services when it contracted out. Data collected by the researcher was in form of qualitative and quantitative means which was collected through the use of triangulation that‟s questionnaires, interviews, structure and unstructured, observation, AOTM employees and internal reports such as memo and newsletters. Therefore data sources were both from primary and secondary sources. AOTM was the main case study under investigation where most of the data was collected from and also from other four tobacco companies, suppliers and contractors of AOTM. The data collected was qualitative in nature and analyzed through qualitative which was descriptive and in quantitative manner. Thereafter the research had drawn the findings and conclusions whereby it used charts, graphs and tables in order to present the findings in the meaningful manner. The main purpose of conducting this research study was to find out what impact the outsourcing practice had brought to the Malawi Tobacco Industry in Malawi and in particular AOTM since its implementation. The major reasons that caused the organizations to advocate for outsourcing include focusing much on the core competences, saving costs, lack of capacity and to attain expertise services. However the concept had brought some positive implications on the cost savings, effectiveness and efficiency, capacity levels and quality whereby contributes to the profit margins of the organization. The main objectives of this research was to establish whether outsourcing practice has improved effectiveness and efficiency at AOTM and its overall performance as whole. The research objectives also include benefits of outsourcing from the time of its implementation, drivers, challenges and critical success factors, procurement methods used and outsourcing methods adopted when contracting out their activities to the service providers. However, to some extend it has failed to fully achieve these objectives. The significance of this study was that some critical areas have been analyzed concerning outsourcing in relation to the problem investigated which was why there was escalation of costs and poor delivery performance of the outsourced activities

EFFECTS OF OUTSOURCING ON ORGANIZATIONAL PERFORMANCE: A CASE OF THE KENYA JUDICIARY

Organizations have continuously pursued means to increase their competitive advantage over the competitors through outsourcing. The study therefore was purposed to establish the effects of outsourcing on organizational performance using Kenya Judiciary as a case study. Consequently, the study’s specific objectives were to determine the effect of quality control because of outsourcing on organizational performance, investigate the effect of cost efficiency due to outsourcing on organizational performance, find out how operational controls because of outsourcing affect organizational performance, and assess the extent to which risk management through outsourcing affects organizational performance at the Kenya Judiciary. The significance of the study is that it will help organizations engaged in the practice to assess the impact of outsourcing on their performance. The study will also help organizations to estimate the relative cost of outsourcing to their companies. Because of its design to answer questions concerned with what, why, who, how much or when, descriptive research design was considered the most ideal for the study. The population was 38 employees from the procurement function at the judiciary. The study used the whole population of 38. This is referred to as census and it is applicable where the population under study is relatively small and further sampling may not yield a representative figure. The use of qualitative research for this study ensured appropriate answers were identified in addressing the research question and clearing the understanding of the effects of outsourcing on organizational performance. Quality control, cost efficiency, operational control, risk management adaption and organization performance had a significant strong positive relationship. Based on the findings of this study the improvement of judiciary, practitioners and researchers is highly recommended. The organization can still concentrate on specific areas which are evolved from this study to make outsourced programme more effective. Outsourcing is advantageous to performance of an organization only if the attitudinal results offered in the study agree with outsourcing proponents’ claims that it allows expertise enhancement, service quality improvement, streamline processes, reduce cost and administration burden as well as time saving

Human Resource Management Outsourcing in Spanish firms: Evolution over time and implication for devolution

Purpose: The paper aim to explore the evolution in the use of HRO in Spanish firms, and determine the differences in the degree of implementation of HRO since 1999 until 2014, and also analyze the relationship between HR outsourcing and devolution of HR responsibilities to line managers in Spanish organizations. Design/methodology: This paper combines quantitative and qualitative methods. Namely the article is based on international Cranet HRM survey data collected from private and public organizations and also interviews with HR external providers. Findings: The analysis of developments, based on the Cranet surveys and interviews with HR external providers shows that during the past few years there has been an increasing use of HRO in parallel with the tendency to devolve more HR responsibility to line managers. Research limitations/implications: The main limitation of this research is the limitation of data about reasons for devolution that the CRANET questionnaire provides. However, the interviews carried out enrich the survey data with qualitative results. Practical implications: The findings can be used to guide management teams in outsourcing and devolution decisions to maximize benefits to their organizations. Originality/value: This paper is about the evolution of HRO in Spain as a European Union country where published research on HRO and also its implications is relatively limited. The originality of this paper is mainly the involvement of line manager in the outsourcing process which have been poorly analyzed until now.Peer Reviewe

Overcoming inertia : drivers of the outsourcing process

Almost all managers have directly or indirectly been involved in the practice of outsourcing in recent years. But as they know, outsourcing is not straightforward. Outsourcing inertia, when companies are slow to adapt to changing circumstances that accommodate higher outsourcing levels, may undermine a firm’s performance. This article investigates the presence of outsourcing inertia and the factors that help managers overcome it. Using statistical evidence, we show that positive performance effects related to outsourcing can accumulate when circumstances change. This is then followed by rapid increases in outsourcing levels (i.e. outsourcing processes). We investigate what gives rise to these outsourcing processes through follow-up interviews with sourcing executives, which suggest five drivers behind outsourcing processes: managerial initiative (using outside experience); hierarchy (foreign headquarters); imitation (of competitors and of similar firms); outsider advice (from external institutions); knowledge sources (using external information). These five drivers all offer scope for managerial action. We tie them to academic literatures and suggest ways of investigating their presence and impact on the outsourcing process. Overall, we conclude that while economizing factors play a key role in explaining how much firms outsource, it is socializing factors that tend to drive outsourcing processes

Outsourcing information systems: Drawing lessons from a banking case study

Financial and costs benefits are often put forward as the reasons why organisations decide to outsource. Emerging patterns and trends indicate that today’s outsourcing decisions are often motivated by factors other than cost. Thus, the decision-making process is more complex than it may at first appear. This paper presents findings from a case study from an organisation in the UK banking sector that was motivated to outsource aspects of its information technology/information system (IT/IS). The underlying motives and decision-making process that influenced the bank outsource its IT/IS are presented and discussed. Findings from the case study suggest political perspectives, as well as human and organisational issues influenced the bank’s strategic decision-making to outsource certain aspects of its business. An examination of the case study findings suggests that cost alone is not always responsible for decisions to outsource, as it was found the bank’s outsourcing decision was driven by a series of complex, interrelated motives in a bid to reduce the risks and uncertainties of managing its own technology. Considering the complex nature of the outsourcing process a frame of reference that can be used to assist managers with their decision to outsource IT/IS is propagated. The case study is used to present an organisation’s experiences as to how and why it decided to outsource its IS and thus offers a learning opportunity for other organisations facing similar difficulties. In addition, the case study findings highlight the need to focus greater attention on discriminating between the short and long-term consequences of IT/IS decision-makin

Domestic Outsourcing in the United States: A Research Agenda to Assess Trends and Effects on Job Quality

The goal of this paper is to develop a comprehensive research agenda to analyze trends in domestic outsourcing in the U.S. -- firms' use of contractors and independent contractors -- and its effects on job quality and inequality. In the process, we review definitions of outsourcing, the available scant empirical research, and limitations of existing data sources. We also summarize theories that attempt to explain why firms contract out for certain functions and assess their predictions about likely impacts on job quality. We then lay out in detail a major research initiative on domestic outsourcing, discussing the questions it should answer and providing a menu of research methodologies and potential data sources. Such a research investment will be a critical resource for policymakers and other stakeholders as they seek solutions to problems arising from the changing nature of work

Strategic Outsourcing: Evidence from the British Companies

Outsourcing has become an increasingly popular option for many organisations. But they vary in terms of activities being outsourced, reasons for and benefits from outsourcing, and how the decision was made. This article presents an empirical research on fourteen companies. It found out, a) in most cases it was the ‘peripheral’ support activity being outsourced with cost reduction as the primary driver; b) outsourcing decision was being made early in the process without active involvement of the in-house provider; and c) there were problems in supplier selection and management. The research identified pre-outsourcing decision process and post-outsourcing management as the two key areas that gave cause for concern, and offered recommendations for improvement

Improving outcomes in outsourced product development: a joint consultant-client perspective

Although firms increasingly outsource front end product development activities to production suppliers or design consultants, this practice has received little scholarly attention. The few existing academic studies report high failure rates but generally present only the client firms’ view of the causes. Our first results from in-depth interviews of both clients and consultants give a richer picture of enablers of success and causes of failure. We confirm some previous findings(internal divisions within the client, “poor communication” between parties),identify new ones (inadequate client capabilities, failure to transfer design intent), and combine them into a comprehensive model of outsourced product development that includes negotiating project scope, continuously managing expectations, and carefully re-integrating the design output into the client’s operations. Finally, we classify several types of client dependency (need for new ideas, extra capacity, or specific technical expertise) and highlight the particular hazards associated with each