Strategy Of Business Outsourcing Essay


Discuss about the Strategy of Business Outsourcing.



There are numerous examples of organizations who have gained business profits and sustainable growth due to business outsourcing. On the other hand, there are someorganizations who have failed to extract the advantages offered by the strategy of business outsourcing. This research work aims to examine the key challenges or shortcoming that makes the business outsourcing strategy to fail in the organization.

Project Objective

The main objective of this research is to examine the challenges that make the business outsourcing strategy a difficult one and thus makes the decision of business outsourcing a failure for the organization. This research thus examines the main causes of the failure of the business outsourcing in the organization.

Project Scope

This work shall give the list of drivers that lead the organizations towards a failure business outsourcing strategy. Through this research,many organizations can get proper insights related to business outsourcing and thus can make corrective decisions for business outsourcing strategy.

Literature Review

Business outsourcing is a strategic business strategy that has proven to be very useful in terms of improved efficiency, improved company focus, improved revenues, improved flexibility of doing work and reducing operational costs ( Ahonen et al, 2010). On the other hand business outsourcing if not implemented properly can result in loss of reputation to the business, lack of employee motivation, loss of jobs, security risks to the data of the business and customer conflicts. Thus, it is necessary that organizations make effective business outsourcing strategy to exploit the advantages it offers to the organization (Hanafizadeh et al, 2017; Aziati et al. 2010; Massini et al, 2012).

Research Questions/Hypothesis

Primary Question

RQ: 1 What are the main causes of the failure of the business outsourcing in the organization?

Secondary Questions

RQ: 2 What are the main managerial, technical and socio cultural factors in the strategic outsourcing decision project that cause the outsourcing decision to fail?

RQ: 3 What are the disadvantages due to the failure of the outsourcing strategy on the organization?

Research Design and Methodology

To examine the main factors which cause the strategic outsourcing decision to fail, the research methodology employed is the case study based analysis. The case study based research methodology allows observing, exploring and explaining various concepts within the real-life setting and thus gives agreater understanding of the causes that lead to the expected outcome. In this methodology number of cases related to the research is examined. This research thus makes use of qualitative evidence where the data is collected from the case studies of business outsourcing implementation in some organization. From the literature review, it is clear that business outsourcing is a business strategy that offers multiple advantages and when implemented in wrong way leads to failure of the business. Thus, for the purpose of this research few failed implementation of business outsourcing are examined and the reasons fortheir failure are assembled and analyzed.

Primary data: the primary data comes from the examination of the case studies of failure business outsourcingorganizations. There are reports on the failure incidents of the outsourcing, evidence related to the causes of failure produced in court cases and reports of failure statistics etc. This becomes the main source of analysis.

Secondary data: from existing literature the disadvantages of the business outsourcing gives insights on what happens if this strategy goes wrong. From this data, qualitative analysis key variables are devised for examining the case studies. This data is collected from existing literature review, publications, recognized websites and organization websites.

Data analysis:The key variables formed from the secondary data are collected and the case studies are examined with respect to these variables. This data is coded into the table and is used for triangulation. Then a cross case examination is done to understand the causes of the failure of the strategy of business outsourcing (Lacity et al, 2011).

Validity and reliability: To ensure that the research is a valid and reliable one the research makes use of data published in the court case proceedings, in media reports, on websites of the organizations and through reputed and recognized publications (Saladana & Johnny, 2012).

Research Limitations

There are many cases of business outsourcing failure and the disadvantages suffered by these organizations. It is not possible to explore all these organizations.

Time Schedule (Research plan)


Number of days



Literature review


Finalizing research questions


Methodology selection


Data collection and Processing


Analysing the data





There are many organizations who have failed to extract the benefits of outsourcing due to improper planning, improper management and control, and many other reasons. This research work gives the details on why business outsourcing fails and what are the disadvantages it can cause to the organization after failure.


Ahonen, J., Savolainen, P., (2010). Software engineering projects may fail before theyare started: post-mortem analysis of five canceled projects, Journal of Systems 83 (11) 2175–2187.

Aziati, N., Hamid, A., &Salim, J. (2010). Inter-Organizational Knowledge Transfer Through Malaysia E-government IT Outsourcing: A Theoretical Review. Journal of World Academy of Science, Engineering and Technology, vol 4, pp 66.

Hanafizadeh, P., Zare Ravasan, A. (2017). An investigation into the factors influencing the outsourcing decision of e-banking services: A multi-perspective framework.Journal of Global Operations and Strategic Sourcing.

Lacity, M., Willcocks, L. and Khan, S. (2011), “Beyond transaction cost economics: towards an endogenous theory of information technology outsourcing”, Journal of Strategic Information Systems, Vol. 20 No. 2, pp. 139-157.

Massini, S. and Miozzo, M. (2012), “Outsourcing and offshoring of business services: challenges to theory, management, and geography of innovation”, Regional Studies, Vol. 46 No. 9, pp. 1219-1242.

Saladana, Johnny (2012). The Coding Manual for Qualitative Researchers. Sage. ISBN 1446247376.

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