Strategic decision-making in outsourcing: Towards a substantive theory of business streamlining in outsourced processes

Organizations are embracing the concept of outsourcing to avoid spending on skills that are needed intermittently. Studies have indicated that outsourcing has been accepted as a strategic move that will be unavoidable business practice in the future. However, there is no clear framework for strategic outsourcing that organizations can use to ensure success. This research utilizes exploratory and descriptive approaches to investigate outsourcing decisions in organizations and the basis of optimizing outsourcing practices. The qualitative aspect of the research involved interviewing of top managers of organizations to gain understanding of outsourcing decisions and challenges encountered in the process. The research employed inferential statistical analysis to draw conclusions from the data collected. The results indicated that outsourcing decisions are motivated by firms seeking operational efficiency. Most firms base their outsourcing tactics on the prior experiences, and there was high correlation between the number of times a firm has outsourced and outsourcing optimization. Also, the study finds out that technological complexity is a considerable factor when making an outsourcing decision. Incidentally, the study established a high correlation between outsourcing and operational efficiency. Organizations that had a propensity to outsource recorded high alignment with objectives and goals. The research validates the need for outsourcing optimization, and proposes a framework for effective outsourcing.