Effect of Outsourcing on the Performance of Pharmaceutical Companies in Kwara State
[Thesis]
Kamal, Maryam
Brimah, Aminu
Kwara State University (Nigeria)
2019
126
M.S.
Kwara State University (Nigeria)
2019
Business functions have increasingly become complex in the face of globalization and rapid competition. Thoroughly examining the motivations, expectations, and justifications for outsourcing critical operations functionality enables organizations to make effective decisions which generate incremental profitability and shareholder value. Outsourcing should ideally reduce on the pressure of hiring and maintaining high skilled human resource, to address the underperformance of employees, to deal with high staff turnovers, the lack of innovation among the employees and for the institution to concentrate on its core competencies as well as a means to reduce costs among other reasons. Hence, the study examined the effect of outsourcing on performance of selected pharmaceutical companies in Kwara state. Primary data sourced from a population of 860 and sample size of 265. Respondents were selected through stratified sampling technique. The study hypotheses were tested using multiple regression and correlation analysis. The study found that most of the explanatory variables have positive relationship with sales growth, productivity, profitability and innovative capacity among pharmaceuticals in Kwara State. The results from hypothesis showed the coefficients of the explanatory variables (quality management function, human resources function, facility management function, information and technology function). The result shows that quality management function with coefficients 0.472 has positive effect on sales growth of pharmaceuticals in service of Kwara State while informational technology, human resource function and facility management function with coefficient value of -.016 and -.081 have negative effect on sales growth among the pharmaceuticals in Kwara state. The study concluded that outsourcing has positive relationship with performance of pharmaceuticals in Kwara State where human resource function and quality management functions have the strongest effect. The study revealed that outsourcing variables have significant effects on sales growth, profitability, productivity and Innovative Capacity among the pharmaceuticals in Kwara State. The study recommended that a dedicated independent team of highly trained specialists to ensure that goals are being met, especially since quality is so fundamental to Customer and bottom-line success. It is time-consuming and expensive to attempt to develop all the skills you need in this area and deal with constant turnover--as people move through their careers. QMS Sourcing provides consistency, innovativeness, expertise, third party objectivity and zero hassles. The study also recommended that maintenance issues should be placed on the back burner. Also, facilities management team members may be incapable of responding to maintenance issues immediately, unless that situation is considered an emergency. Because, outsourcing facility services increase responsiveness and timely service.