The Perceived Impact of Outsourcing on Organizational Performance

Outsourcing is the strategic use of outside resources to perform activities that are usually handled by internal staff and resources. By using a well‐managed outsourcing agreement, companies can gain in markets that would otherwise be uneconomical. This study was designed to explore why companies are undertaking outsourcing projects and identifies factors that may facilitate or impede outsourcing projects. In addition, this article examines the relationships between outsourcing strategies and organizational performance. The results show that organizations generally considered themselves successful at outsourcing. However, while they achieved significant improvement in organizational performance, they have not reached the magnitude of improvements ascribed to outsourcing.