Professional Documents
Culture Documents
Adnan ul Haq
Abstract
Background: Development and advancement in the technologies and world has become a global village where ideas, technologies, and human resources are exchanged on a regular basis which also increases the risk and competition in the dynamic environment. At the same time where it has provided great opportunities to business to expand and gain a high momentum to increase its market share by getting the best out of the available resources, it also has increased certain types of risk associated with the outsourcing activities. Specifically, the service sector enhance in size and variety of outputs by means of outsourcing its various departments and services. The development of the information technology segment has determined the market environment. To be able to compete in this global market outsourcing of IT functions can be a valuable tool if handled in the right way. Small and medium sized enterprises can profit from service outsourcing although studies show that this type of organizations fail in their outsourcing initiatives in an above average rate as a result of deficits in risk management, precisely in risk identification. Aim: The aim of this Master Thesis is to analyse the specific characteristics of small and medium sized enterprises especially considering Reckitt Benkiser as case study in order to find out how they impact the different stages of the service outsourcing process. Theory and empirical data helps to spot strengths and weaknesses of the selected organization in order to find a solution to a better risk identification process which then might lead to increased success in outsourcing of services. Completion and results: Specific characteristics of small and medium sized enterprises play a significant role in the risk identification process of service outsourcing. Economic motives are the main reasons for outsourcing and to be cost effective as well avail qualified staff, and improve overall efficiency. By being aware of these risks and acting according to minimize them, harm can be prevented. Especially, a well-designed service outsourcing contract, regular and smooth communication and personal relationships could be an advantage to overcome the drawbacks of medium size, high dependency, need for flexibility and lack of resources.
TABLE OF CONTENTS
Abstract 2
CHAPTER ONE: INTRODUCTION....................................................... 1.0 Introduction............................................................................................. 1.1 Introduction What is Outsourcing?...................................................... 1.2 Statement of Problem.............................................................................. 1.3 Research Hypotheses............................................................................... 1.4 Research Aims......................................................................................... 1.5 Objectives of Research............................................................................ 1.6 Research Questions................................................................................. 1.7 Significance of the Study......................................................................... 1.8 Scope and Delimitations.......................................................................... 1.9 Definitions............................................................................................... CHAPTER TWO: RESEARCH METHODOLOGY.............................. 2.0 Introduction............................................................................................. 2.1 Research process..................................................................................... 2.2 Timeframe............................................................................................... 2.3 Research purpose..................................................................................... 2.4 Research Approach.................................................................................. 2.5 Research Strategy.................................................................................... 2.5.1 Data collection................................................................................ 2.5.2 Sample selection............................................................................. 2.7 Data Analysis.......................................................................................... 2.8 Validity and Reliability........................................................................... CHAPTER THREE: LITERATURE REVIEW...................................... 3.0 Introduction............................................................................................. 3.1 Types of Outsourcing.............................................................................. 3.2 Outsourcing............................................................................................. 3.3 Concept of Specialization........................................................................ 3.4 Controlling risk........................................................................................ 3.5 Managing organisational change............................................................. CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION.... 4.0 Introduction............................................................................................. 4.1 Empirical part of research....................................................................... I. Interview at Pre-Contractual Stage.................................................... II. Outsourcers Interviewed in the Contractual Stage............................ III. Outsourcers Interviewed in the Execution Stage.............................. 4.2 Data finding analysis and discussion.......................................................
7 7 7 9 9 9 9 10 10 11 11 12 12 12 13 13 14
15 16 16 18 18 18 19 21 21 22 23 23
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CHAPTER FIVE: CONCLUSION........................................................... 5.0 Introduction............................................................................................. 5.1 Overall conclusion................................................................................... 5.2 Limitations............................................................................................... 5.4 Implications............................................................................................. 5.4.1 Implication for Managers............................................................... 5.4.2 Implication for Theory................................................................... 5.4.3 Implication for future researchers.................................................. REFERENCES............................................................................................
35 35 33 37
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List of Tables Table 1: Table 2: Table 3: List of Figures Figure # 1 List of Bar Diagrams Bar Diagram 1: Bar Diagram 2: Bar Diagram 3: Bar Diagram 4: Bar Diagram 5: Bar Diagram 6: Bar Diagram 7: Bar Diagram 8: Bar Diagram 9: Bar Diagram 10: Bar Diagram 11: Bar Diagram 12: Bar Diagram 13: Bar Diagram 14: Bar Diagram 15: Bar Diagram 16:
Interview at Pre-Contractual Stage Outsourcing employees in three sectors of organization Interview about outsourcing after Execution Stage
24 27 30
12
the main reasons for outsourcing in the organization The insourced services by the respective organization Most commonly outsourced by the organization The initiatives for the outsourcing of services The strategic assesment before outsourcing services Types of risk assesment done by the organization Outsourcing employees in three sectors of organization Consideration regarding various risks Selection criteria of vendors for outsourcing Time frame for negotiations Measuring failures or success of outsourced sector Essentiality of renegotiations in outsourcing process Probable transfered knowldge through outsourcing Monitoring assist organization in avoiding risk Mode of communication in the process of outsourcing Communication plays a vital role in controlling risk
24 24 25 25 26 26 27 28 28 29 29 30 31 31 32 32
The trend of outsourcing has gradually increased with the passage of time and industries related to service providing organizations and information technology are known for outsourcing. Such organizations are always linked with the managing business intrinsically. Often, in medium and large size enterprises, there is a possibility of outsourcing its whole information management, which means resource planning, workstations, call centres and installations, management, network services, and business analysis are outsourced. Outsourcing varies as large contracts to provide the entire IT services to even the temporary office employees. For instance, Xerox has outsourced its IT services and other hiring contract to IBM managers. According to Dus et al., (2009; p. 3f) Outsourcing classify as the pact with autonomous service provider to tackle services and functions formerly executed inside organization A development begin with industrialized business and afterwards sustained in the early 1990s by service providers representatives in the arena of the
international outsourcing (Bryson and Daniels, 2007). Occurrences and consequences soon urged medium scale enterprises along with small scale enterprises (because of shortage of financial and human resources) for the adoption of outsourcing even though further cautiously than a solution of tactical strategies, it is viewed as a tool for enhancement of strategic opportunities (Mac and Bhaird, 2010). The delocalization of business functions into other countries is regarded as offshoring (Dus et al, 2009, p.3). Regular offshoring is usually done inside firm or at times offshore outsourcing which means third party. The financial motives such as reduction in the labour cost, and competitive pressure and strategies related to growth connected with the differentiation in system of taxation (Jabbour, 2010). Sequentially, third party working abroad having a complete power to exercise the responsibilities and executions of business function or a transfer in specific geographic boundaries is represented by offshore outsourcing (OECD, 2004).
In the early days, manufacturing sector was more associated with the outsourcing and offshoring but nowadays, service sectors are also strongly connected with these terms and trends. But it has been noticed that with every strategy that an organization considers, there is a risk that organization has to initiate. According to Tafti (2005) because of business relations nature, there is inherited risk with it and when there is a contractual partnership means service providers and service beneficiary, a threat is much more as there is risk on both side. Not only risk of general type such as
communication barrier, limited direct control, organizational culture diversification, misunderstandings etc, there are some other agendas (cultural conflicts, lack of process control, communication problems due to time differences and language asymmetries, political issues) that can increase a risk factor between vendors and outsourcers (Dus et al, 2009). Furthermore, it is concluded by Dus et al, (2009) that in regular outsourcing is not being affected by these types of risk especially in IT sectors and small enterprises. This is the main reason that increases a researchers interest to investigate that whether the risk affects the regular outsourcing in the household industry or not.
2 Steps involved in the successful process of outsourcing at Reckitt. 3 Identify the actual causes that move the organization towards adoption of the outsourcing strategies. 4 Explore the correlation between the risk management and outsourcing strategies At Reckitt. 5 Conclude the impact of risk management on the entire process of outsourcing in the business strategies at Reckitt.
Q2. Is there a significant relationship between the outsourcing services and risk involved in the process of outsourcing?
Q3. What is the impact of the risk management on the overall outsourcing business strategies of Reckitt?
services in the household industries with reference to Reckitt Benckiser Pakistan. This sector, is a significant contributor to the Pakistans economy and therefore it is to relate the risk factors associated with the outsourcing procedures are investigated and practical approach is undertaken to conduct descriptive study for the identification of causes for outsourcing services in household industry.
1.9 Definitions:
Greaver, (1999) defines outsourcing as, It a process of contracting out the functions of a business by a firm. In other words, it is a decision made by top management to contract out the functions of their respective business to external agencies so that the activities which were previously carried out internally could be done through agencies.
Domberger (1988, p12) defined outsourcing; Outsourcing as a process of traditionally activities executed by the internals carried out are subject to contracted out to external providers.
Yadav, (2006) termed it as; Outsourcing engages two parties that are clients and the providers respectively. To strike a perfect balance, outsourcing involves immense expertise from client as well the agency. This indicates that there is a link between these two respective parties. The linkage between the provider company through provision of its services or products to a client in return of profit motives is regarded as outsourcing Lashley and Morrison, (2002)
Research Topic
Selection
Data
Research Methods
The above mentioned figure is explained step by step below: Situation: In the investigation we have considered that we have no clue that whether the risk is associated with the outsourcing in medium size enterprise and if so to what extent? Research topic: theoretical background concerning causes for collapse in facilitating outsourcing is limited, for small and medium sized enterprises. Current studies demonstrate that an account may be the lack of specialized and
systematic risk recognition and in general administration (ESI International, 2010). Research methods: to investigate risk identification in service outsourcing in depth within SMEs, a qualitative method is undertaken. Interviews from the management, employees, and associated members of the company are taken regarding outsourcing with special reference to risk identification. Data: The in-depth interviews from the internal customers are the prime source in data collection but the extracts are generated from other secondary sources also. The Deloitte offshore outsourcing life cycle model is summarized to show he risk involve in the entire process of outsourcing services. Conclusion: Walliman (2001) draws the conclusion as the final stage of the research process. The conclusion and results are limited to the selected organization as the data is generated only from one specific organization.
2.2. Timeframe
The time frame for the present research is from the beginning of July 2012 to the end of September 2012. The structure, scope, definition and theoretical framework took approximately two months. The process of continuous editing continued to keep the relevant material in the topic. Therefore this research is deductive in nature. Interviews with the associated companies and members lasted in four weeks. The empirical aspect of the process completed in two weeks. The analytical aspect of this present investigation was comprehensively completed in early October.
categorized on the particular types of research and this present research is descriptive as well exploratory in nature (Goddard and Melville, 2007; Blumberg, 2008). This is a descriptive one as it aims to provide insight to specific situation and deals with audience (who), event that took place (what), and discuss time and place as (when and where) (Blumberg, 2008). Our research is descriptive as it tends to discuss how risk involves and outsourcing services have an impact on the overall process. Other elements of exploratory type of research attempts to evaluate what is happening; to seek new insights and to assess phenomena in new lights (Saunders et al, 2009, p. 139). The literature framework of our research indicates descriptive aspect as previous empirical researches are undertaken to explain the risk involve in the outsourcing services process. We also intent to explain why and how the process is affected which mean this is the exploratory aspect of this present investigation.
2.5.1. Data Collection For the practical perspective data is gathered in this research from primary as well secondary sources. Blumberg (2008) states that secondary data as has already been collected and recorded by someone else (p. 315). The advantages of such data are that it is cost effective but it is less reliable. In this research we have collected data from secondary sources (both written and electronic) related to outsourcing services in the small and medium side enterprises and their data and records to underpin our interest in-to risk identification issue. From secondary data we have developed our literature and conceptual framework as our research is deductive approach and move towards primary method with in-depth interviews. Through this we have opted for the qualitative analysis which assists to achieve depth rather than breadth and helps in under-standing a whole situation (Mennen, 2010, p. 12).
2.5.2 Sample Selection The main focus of our research is household industry where IT services are more in fashion to be outsourced and we have analysed the performances of IT sector of Reckitt and the main aspects include the features of traditional services (intangibility, heterogeneity and perishability), IT businesses, although specific, offer some general service recommendations. In this research we have interviewed 200 employees, experts and associated members of the selected organization as the sample size of the research is limited Schmiemann, (2008). In this we have considered employees working at top management, middle
extent to which empirical findings and theoretical considerations support the adequacy of argumentation (Jonker and Pennink, 2009, p.103). The sources of extraction of data and information are measured and determined by different researchers in order to determine these two parameters (reliability and validity). Saunders et al, (2009) suggests that these two parameters can be determined by checking the prime sources from where the collected data is gathered. The initial can be calculated in terms of reputation or authority of the sources (Dochartaigh, 2002 in: Saunders et al, 2009, p. 274). The data is collected from the organizations HR and finance department as the researcher has direct access in the organization so the annual reports and records are reliable as well valid because these were taken in exact form and there was no evidence of alteration in the records and reports. But then again according to Saunders et al (2009) Validity of secondary information is claimed to be harder to evaluate. Primary sources of are more essential to be valid and reliable for the researcher and as there is in-depth face to face interviews with the concern people therefore the data collected is valid and reliable. Conversely, there is a chance of provided information to be biased as it involve human and human have the tendency to change their views frequently and give their opinion based on their experience in most of the cases rather than analysing the correct situation to deliver their view point.
2. Knowledge Process Outsourcing (K.P.O.) Shanthi Kumar (2007) described (K.P.O) knowledge process outsourcing as outsourcing of a supreme level job transferred to external service provider. It is considered above BPO as KPO is more critical in nature and requires sensitive and delicate approach from management perspective. In household sector, BPO and KPO both are practiced to a great extent and sometime expert decision makers are require to run the overall business operations.
3.1.2 Resource based theory: Davis (2000) objectives and goals of company to be achieved are outlined by the strategy. Davis has considered strategy as one of the corners of a triangle other two sides are policy and resources. Similarly, Davis (2000) also viewed outsourcing as a resource method. So it is evident from the above literature that outsourcing is not a strategy in its own but a part of a strategy that is formed by resources, policy and strategy of business. In strategies, of scaling without mass, strategic repositioning and disruptive innovation outsourcing is vital as it is supporting theses different strategies.
3.1.3 Theory of core competencies: Leavy (2004) states that outsourcing is a method for companies to hire experts for the fulfilment of regular business functions and later focus on corporate resources that will have firm impact on its customers. On the other hand, Gottschalk and SolliSaether (2005) prime concern was theory of core competencies, which means those tasks that are not included in core-competencies must be outsourced to best service providers.
3.1.4 Scaling without mass: It this, a firm is able to retain speed and dexterity by outsourcing its functions without bringing any change in size or bureaucracy of the firm. This also increases the presence in the market to grow more.
3.1.5 Disruptive Innovation: Leavy (2004) argued that most worthy example of disruptive innovation is outsourcing. The segments are created at below par value as it runs as low cost and provide disrupt incumbents.
3.1.6 Vertical Integration and neoclassical economic theory: Neoclassical economic school view the cost saving as a vital strategy. Gottschalk et al, (2005) the marketplace is essential place that if provide an opportunity to produce at lower price than the firms internal production will attract the company to outsource its production unit to save cost. Allen et al, (2006) proposed that cost advantage is the main factor to urge companies for outsourcing activities.
3.2 Outsourcing:
Varetto et al (2003) explain it as approach of management to delegate non-core functions to best service providers. Obtaining of services or goods from the professional external agency is considered outsourcing (Embleton et al, 1998; Parsa et al, 1999). Whereas, Zhu et al, (2001) suggest, outsourcing as a correlation between supplier and outsourcer for long term with high degree of risk in it. Outsourcing is a way of transformation of authority and responsibility from outsourcers to experts in the performing of business function.
3.2.1 Benefits of Outsourcing: The study of Parsa and Lankord (1999) concluded that 15% cost saving is attain by outsourcing. On the other hand, Domberger (1998) indicates competitive advantage as an attraction that pushes organizations into direction of outsourcing. Hayward (2002; P. 26) states except from competitive advantage everything can be copied. The competitive advantage is depending more on outsourcing. K&K (2000) strongly suggests defining core competencies is not easy for organisations as it is ambiguous one (p. 674). Outsourcing is more in focus to sustain core competence Quinn and Hilmer (1994) give more importance to intellectual skills and management to gain competitive edge to organization.
This way outsourcing services opportunities are created as to shift a focus on core competencies, firms usually outsource auxiliary services to best-providers (Domberger, 1998, p. 37). K&K (2000) concluded their suggestions regarding outsourcing The outcome of outsourcing depends on the performances being outsourced along with the effective requirement of resources in substantial mode to consider the required results (p. 705).
From the discussion above it is quite visible that business see specialization as one of the key benefit when approaches to outsourcing services and it gives opportunity to focus more on core competence. Flexibility, discipline in market, and efficiency in cost are the important benefits of outsourcing (Domberger, 1998). The sum of key benefits is extracted from various empirical researches. One of the most essential benefits of outsourcing is reduction in cost indicated by various researchers such as Hayward (2002) Smike (2000), Deans (2001), Ansley (2000), Domberger (1998), and Syver (2001). The study of Hayward (2002) indicates 45% of cost is saved by business through outsourcing strategies. Similarly, Dean (2001) study shows in Australia, organization minimize their cost through outsourcing strategies. Teresko, (1990) find outsourcing as a way to replace unsatisfactory services. Domberger, (1998), and Mise, (2001) considers it as a tool to assist changes and K&K, (2000) viewed it as transformation of employment terms.
3.3Concept of Specialization:
Specialization is a prime advantage in outsourcing services (Lagfield-Smith, 2001; Ansley, 2000; Domberger, 1998). It is a shift towards important activities and further enhance in those functions and letting the expert handle other non-core functions. K&K (2000) view it as a main advantage of outsourcing. Their research also revealed that it brings a more flavour to business as the core investments of suppliers are utilized adequately. Whereas, Domberger (1998) strongly debates that outsourcing the expert peripheral service providers are capable to accomplish the enormous level than feasible if the responsibilities and conducts are divide among the different organizations carrying out then internally. In addition to it, the professional supplier has gain of magnitude of economies being obtained which may not be attained by the internal providers (Domberger, 1998).
Many fixations of components and variables in contract develop strategies to reduce the associated risk as the risk is split down to a decided proportion. Though the risk is different and heavily relies on the types of services offered and considered, such as employee outsourcing is more risk oriented in the labour intensive industries therefore contractors are to consider uncertainties in various dimensions while managing risk so that risk is calculated (Domberger, 1998). A proper management and execution of plan assist organization to manage and control risk (Mise, 2001).
4.1
This part of research include three vital stages of interview process in which the main idea of researcher is to investigate the reasons attached with the risk involved in the entire process of outsourcing.
The three stages in which interviews are conducted in this research as following: IV. V. VI. Interview at Pre-Contractual Stage Outsourcers Interviewed in the Contractual Stage Outsourcers Interviewed in the Execution Stage
Middle Management
Qualified staff, better service, costs, expanding Software development, customer service. IT development,
Lower Management
Qualified staff, better service, costs, flexibility Software development, customer service IT development,
Supervisor
Qualified staff, better service, costs Software development and maintenance IT development,
Management
Administration
Partial
No
Yes
especially financial
personal Information
and
Above 50% in customer services and software maintenance and above 80% in IT development.
Insourced services
40 35 30 25 20 15 10 5 0
Chart # 4: The initiatives for the outsourcing of services according to different level of organization.
Yes Partial No
Chart #6: Explains the type of risk assesment done by the organization.
Top management
Middle Management
Lower Management
Supervisor
Middle Management
Control over business Processes, Keeping project team in case of vendor bankruptcy, intellectual property rights Presentations at HQ of organization,
Lower Management
Intellectual property rights, constant service quality, accuracy
Supervisor
Keeping project team in case of vendor bankruptcy. Accuracy
What is the duration from time of negotiation to signing contract? How failure or success is measured by certain management? Is renegotiation necessary in outsourcing?
Personal impression.
At least one week and at most two weeks The quality being above market average Yes
One week
Yes
Yes
Vendor's selection
50 45 40 35 30 25 20 15 10 5 0 Local visits & Presentations Results of fulfilment of at HQ performance organization's in trials CSR requirements Personal impresion
Middle Management
IT development, software maintenance, customer services, ideas Of course yes it helps Email, Skype, Cell phone 85%
Lower Management
Customer knowledge services, base and
Supervisor
Software maintenance, ideas about IT development Yes Cell phone
How the monitoring help avoiding risk? What was the frequency of communication? How much communications help calculating risk?
70%
65%
Mode of communication
50 45 40 35 30 25 20 15 10 5 0 Top management Middle Management Lower Management Supervisor
Chart # 15: Mode of communication according to different levels of management in the process of outsourcing.
The above interviews from the employees working in the four different parts of the organization revealed the important data required for interpretation to reach certain specific conclusion in this research investigation. The section designed both primary and secondary research is in accordance with the Deloitte model. The rationale is to create a better understanding about the behaviour of medium size enterprise regarding
outsourcing and to recognize risk associated with the outsourcings entire process. Well, when it comes to the risk assessment, we make sure we do not fail individually or collectively in identifying each and every aspect of risk attached in the process of outsourcing, from beginning to the end. Mr Iqbal, HR manager about risk assessment in outsourcing services.
The key notion of deliberate measurement of overall risk is to convey the approach of organization and outsourcing plans in accordance with the current and upcoming goals (Fersht et al, 2009). It also contains the function of risk assessment and proper identification prior to vesting it into the hands of third party so that the outsourcing procedure is not affected in the negative manner along with the rest of other activities of the organization. The results of our research reveals that the selection of vendor is done on the basis of close recommendation, trials etc and in the literature review we have discussed that small and medium size enterprises usually select the vendors on personal relations and recommendations. Furthermore, our empirical research identified that cultural, financial, and political constrains are some of the obstacles linked with the risk in outsourcing services and it is similar to the argument posed by Dus et al, (2008). In the in-depth interview, it is evident that these obstacles hinder the process and are due to improper resource allocations to design clear strategies. We also found that rather than professional assessment, top management rely on the personal experience of local manager and CSR department to assess the attached risk which is identical to the findings of Seth, (2008) as his study stressed that in small and medium size enterprises the risk is assessed by the personal experiences of the top management. The result findings also revealed that 80% of employees are working in the IT department are through outsourcing and the study of Hahn et al (2009) revealed that various economic motives and pressures exerting in the dynamics urges the organizations to outsourced its key department in order to achieve qualified staff, better resources and be cost effective. The decision to outsourced key department is always in the best interest of the organization as it helps them in maximization of profit. We also examined in the interview that associate members and other staff relying heavily on top management and respects the decisions given by the top management which is also similar to the notion of Johnson, (2010). We also found
that in the execution stage there is huge disadvantage that organization is highly influenced by the vendors so the bad quality of vendors negatively influence the business negotiations. Huddle explains it as It takes years to win a customer and only seconds to lose one are even more important (Huddle, 2011, p. 2).
and it is clearly evident that these objectives have helped us achieve our prime aim of research. The previous empirical researches assist us to establish a correlation
between risk and the overall process of outsourcing. The three different stages for outsourcing were the basic steps to ensure that the entire process of outsourcing at Reckitt is successful and at same time it is risk manageable. Risk identification is an imperative element of organizations assessment. The intent of this notion was to have improved perceptive of significance of this doings and how it is executed by business in actual practice along with the theory. This directs to the synopsis of the key conclusions and results with supportive suggestions for businesses and concerned for upcoming researchers.
We investigated risk recognition, its significance and foremost reimbursement inside the small and medium enterprises. The alternative of this theme was generated by various elements. The outsourcing most widely expanding techniques and the limitation of managerial literature regarding outsourcing on this specific topic is a major concern. In order to develop theoretical basis for medium organizations, the prompt adjustments are required from the future researchers. After commencement of research investigation it is clear that resource limitations, too much dependency on local owner management techniques, limited back up plans, solid customer linkage and focus on cost effectiveness are main aspects of outsourcing process for medium organization.
After identification of these elements we measured their impact on the entire process. Based on cautious examination of the on hand literature and the commenced empirical data, it can be concluded that each characteristic have its strong influence on the process and on every phase of the lifecycle in a different way; and with its own distinctive outcomes. The practical and theoretical data is contrasted by us to assist risk management and it is evident that to major extent substitute professional risk identification with procedures that are conveniently accessible to organization (such as the development of personal relations). Yet, this is acceptable particularly in outsourcing service process for the reason that proper direction and expansion of comprehensive agreement is not all the time likely due to the temperament of the service business, and elasticity cut-throat advantage.
Conversely without risk identification, interviewed organizations various employees it is indentified that the action saves different types of resources in outsourcing process. If organization in advance develops approaches to manage risk there would be less wastage of resources and hurdles in the outsourcing process. This means that as per our literature, in real also risk identification is not treated by organization as it should have been.
Nevertheless, examination of accessible assumption and the departments interviewed, confirm that such commotion saves financial, time, and human resources in more well-organized ways than the dependence on just private know-how and in-formal connections.
5.2 Limitations
Our findings and analysis are grounded on assessment of abstract supports with observed data from private interviews. The outcomes would have been unlike the current one if another assumption was included or distinct individuals were interviewed. Our sample size (only one company) for the experiential fraction is enough for this project. Conversely, big sample size would enhance the validity and consistency of findings. We used current studies of risk classification in the practical segment. This could enlarge the strength of the primary basis however we could not substitute interviews commenced, and also could not situate interviews on the equivalent stage as main sources. Over again, sellers enquiries were originated by indirect source and may to some extent vary from merely other household companies in completion with Reckitt.
However, the majority IT vendors were set up by direct personal links of owners. Furthermore, limited availability of literature; specifically which considered for risk classification of Small and medium size enterprises in outsourcing procedures. The available model is based on large enterprises records and data. The other appropriate model would have given more close and accurate findings.
5.3 Implications
The findings of our research can be used for various purposes by both researchers and practitioners. We hope that Reckitt find it beneficial in managing its risk in outsourcing process in its future as it has participated as case study in this study.
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