OUTSOURCING AS A STRATEGIC TOOL FOR ORGANIZATIONAL SUSTAINABILITY
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OUTSOURCING AS A STRATEGIC TOOL FOR ORGANIZATIONAL SUSTAINABILITY
Chapter one
INTRODUCTION
1.1 Background of the Study
Outsourcing is a management strategy that entails transferring critical or non-core corporate operations to specialised and efficient service providers. (2013) Rajee and Hammed.
Over the last two decades, Nigerian businesses have been under pressure to reorganise and improve their sustainability as a result of globalisation, which has made the business environment more complicated, dynamic, and dangerous.
This drive for greater efficiency and productivity culminated in a more systematic approach to outsourcing company operations, processes, and management practices. Outsourcing employment in Nigeria has been a big cause of concern, as more people continue to suffer as a result of labour employers’ ‘pay reduction policy’,
which does not compromise the quality of services provided. Outsourcing of staff has become the standard in almost every sector of the Nigerian economy, since employers see the system as “the best” for their businesses and are no longer looking for permanent employees. (2014) (Adeleke, Olajide, and Shiyanbade).
Outsourcing workers into the organisation violates Section 7(1) of the Labour Act, which requires an employer to provide the employee with a written contract of employment specifying the specifics of employment no later than three months after the employee’s period of employment with the employer begins.
Furthermore, Owoseye and Onwe (2009) found that, despite the provision in Section 17 Subsection 3(e) of the Constitution that guarantees “equal pay for equal work without discrimination on account of sex, or any other ground whatsoever,” pay disparities between permanent and casual employees persist.
They assumed that the Act treated this form of job in the same way that it did traditional employment. Many outsourced employees do not have letters of employment in order to avoid legal ramifications, and many firms do not keep records on their outsourced personnel.
The majority of criticism of outsourcing has centred on altering employment patterns, internationalisation of the labour market, and the impact on individuals and organisations (Klass, McCleandon, & Gainy, 2001; Dobbs, 2004).
The extent to which a person completes an assignment or task is known as performance. It refers to the amount of accomplishment of the duties that make up an employee’s job (Cascio, 2006).
Jones (2003) defines job performance as “the net effect of an employee’s effort as modified abilities, roles, and task perceptions.” Organisations outsource with the goal of lowering costs, enhancing productivity, expanding capacity, and occasionally shrinking.
Employee performance influences whether an organisation succeeds or fails. Outsourcing’s detrimental influence on employee job performance has resulted in greater levels of unhappiness as well as changes in workers’ employment status, resulting in poor job security, with outsourced employees denied certain benefits.
Because of higher unplanned turnover caused by outsourcing, businesses do not engage in employee training and development, which is a necessary component of enhanced productivity; this is vital in any company.
Employee morale and career development enhance organisational flexibility, sustainability, and stability. As a result of this context, the researcher intends to analyse outsourcing as a strategic tool for organisational sustainability, using banks in Ijebu-ode, Ogun-state, Nigeria as a case study.
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