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EFFECTS OF OUTSOURCING STRATEGIES ON THE ORGANIZATIONAL PERFORMANCE OF FAST FOODS INDUSTRY

ABSTRACT 

Presently, the fast food industry in Nigeria is undergoing very rapid change and explosive growth and it has been argued that outsourcing strategies adopted have contribution to the growth of the sector due to its relevance and potentials for the economy. As such, this study tried to ascertain the significant effects of outsourcing strategies on the organizational performance of fast food companies in Nigeria as regards cost reduction, customer relationship and corporate profitability. About 200 questionnaires were administered to 10 selected fast food companies in Lagos state to get primary data that treated appropriate research questions and three hypotheses were tested accordingly . The study found that outsourcing so far has positively affected the performance of fast food industry and the results indicated that the industry has benefited from outsourcing its business process to reduce cost of operation. Also the study discovered that outsourcing of certain technical aspects of business that has to do with knowledge and professionalism enhance customers’ relationship. The study recommends that fast food companies should sustain business relationships that would assists in transaction negotiation with outsourcing vendors to boost the profitability of firms.

CHAPTER ONE

INTRODUCTION

1.1  Background of the Study
Outsourcing is defined as the procurement of products or services from sources that are external to the organization (Rundquist, 2006). Very simply outsourcing can be defined as phenomena in which a company delegates part of its in-house operations to a third party with the third party gaining full control over that operation / process (Ono & Stango, 2005).

The clients inform their provider what they want, how they want the work performed and the control of the process is with the third party instead of the parentcompany. From the above, outsourcing in this study will essentially refer to a process in which an organization delegates in-house operations / processes / services to a third party. Outsourcing is the process of replacement of in-house provided activities by subcontracting it out to external agents. Consequently, the management and development of innovations in outsourced activities become the responsibility of an agent external to the firm. Outsourcing avails organizations the opportunity to concentrate her core competencies on definable preeminence business area and provide a unique value for customers (Behara, Gundersen, & Capozzoli, 1995). The goals of

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