RESEARCH THESIS FOR MBA PROGRAM in CHAIN MANAGEMENT

OUTSOURCING SERVICES IN HOUSEHOLD INDUSTRY

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

23 32

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

38 39

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

The Research process

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

CHAPTER ONE: INTRODUCTION 1.0 Introduction

This chapter of research give brief introduction to the topic. It contains the overview to the outsourcing services and inherited risk with it. Aim and objectives of research are identified after discussion. The theoretical framework is designed by the help of hypotheses which help us to investigate research questions. The later part of this segment contains, scope and delimitation, significance of the study and definitions of outsourcing services.

1.1 Introduction What is Outsourcing?

Outsourcing is one of the techniques that have developed in recent era where organizations as part of their business strategy hire other expert agency in performing its function by allowing them legally to work on their part. It is a unorthodox method which gives an opportunity to the organization to shift its focus on to other important activities and letting the expert agency or agencies to execute and perform functions on their behalf. Outsourcing is a mutual pact between two parties, respectively the company who seeks the services from the expert and the service providers. In this the seeker usually receives the services in-house.

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).

1.1.1 Offshoring, outsourcing and risk management:

The offshoring brings more value to the business as it assist organization in controlling and reducing the operational cost, and provide an opportunity to shift its focus on the other important strategies, such as core competencies to strengthen and optimal utilization of scare resources (Bryson and Daniels, 2007; Sichtmann and Von Selasinsky, 2010; Mei and Th, 2009). Vendor is an outsourcing company that facilitates the other company by providing services and it is one of the two sides, the other side is a business that seeks the services of the experts (OECD, 2004). With the development and moderation in tools, techniques, and methods, outsourcing and offshoring has attracted high number of researches and it has served as basic foundation for the researchers (Mei and Th, 2009; Tafti, 2005; Tate, 2009).

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.

1.2 Statement of Problem:

What are the causes for outsourcing in the household industries and how risk is associated with outsourcing in household industry?

1.3 Research Hypotheses:

The correlation between the risk management and outsourcing is significant or not?

1.4 Aim of Research:

The research focuses on identifying the causes of outsourcing in the household industry, respectively Reckitt and how the risk management is linked with the outsourcing strategies in the broad spectrum.

1.5 Objectives of Research:

The goals are set to investigate the entire process of outsourcing in relation to the previous models, past researches, and suggestions proposed by the researchers to improvise in their business strategies. Therefore, the prime concern in this research is to generate the information for successful outsourcing implementation process and how to manage successfully risk involved in the entire process of outsourcing services in the household industry. 1 Elaborate the process of outsourcing in the Reckitt to find its scope, strategies and implications in the household industries.

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.

1.6 Research Questions:

Q1. What are the causes for the household organization (Reckitt) to opt for the outsourcing its services?

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?

1.7 Significance of the Study:

This research provides insight for many organizations connected directly with the household sectors which means it is beneficial for them to know about the outsourcing procedures. The various impacts of outsourcing and its need are examined in the selected sector which will help the sector to firm its roots. The selected organization benefits from it as it provides a case study about it and reveal some of the key dimensions on which Racket can capitalize and rectify where there is need to improve their strategies. The research is serves as a management literature for the students, employees, employers, agents, and parties associated with the outsourcing, chain management, and household industry.

1.8 Scope and Delimitations:

The present study is to increase the existing body of knowledge about outsourcing

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)

CHAPTER TWO: RESEARCH METHODOLOGY 2.0 Introduction

This chapter discuss the methods and procedure adopted in the present research investigation. In the first segment the process of this research is explained by mentioning rationale behind this research followed by description, strategy, data collection and analysis and later the reliability and validity of the data is elaborated.

2.1. Research Process

According to Blumberg (2008) to attain the final goal, the actions to be executed are the highlight of research process. The simplest description of research process is explained in Figure 1.

Figure 1: The Research Process Situation

Application Investigation

Conclusion RESEARCH THEORY

Analysis Collection

Research Topic
Selection

Data

Research Methods

Source: Walliman, 2001, p. 194

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.

2.3. Research Purpose

Blumberg (2008) explains that the ultimate success of the research rely on the purpose that is defined in a proper and precise manner therefore, researchs aim, scope, dilemmas and targeted audience are of great importance. The risk identification and associated with the process of outsourcing service is one of the prime purpose of this investigation therefore, the recommendations are suggested to small and medium size enterprises on the basis of risk involve in outsourcing process. Goddard et al, (2007); and Blumberg (2008) argued that the research is

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.

2.4. Research Approach

The most famous two methods in literature to investigate the phenomenon are qualitative and quantitative and it relies on the topic to be investigated. But it also depends on the ability to access information and the researchers perspective. Goddard and Melville (2007) stressed on the mixing of both the methods in order to have more accurate findings and information. Blumberg, 2008; Marczyk et al., (2010) consider quantitative approach as an approach to rely more on numbers than variations, but where human participation is involved and the motive is to understand the human behaviour than the qualitative method is most prcised one (Blumberg, 2008). Our perspective is to create understanding about the decisions taken by the management and we have considered in-depth interviews so this technique of analysis is qualitative approach with an exploratory perspective. Blumberg (2008) also explained two distinct approaches of research: deductive and inductive approach. Our investigation is deductive one as we are depending on the prevailing theoretical frameworks as data will be generated and used to examine accordingly. In this approach we have started from underpinning basic concepts from literature and narrowed it in the direction to reach certain specific issues.

2.5. Research Strategy

Walliman (2001) explains research strategy as amalgamation of various research activities to attain specific conclusion. Various researchers such as Goddard and Melville (2007); Walliman (2001); and Mennen (2010) have considered literature as the main ingredient to give explain and determine research in a broader perspective. The usual summarization of the strategy is explained by Blumberg (2008) which includes surveys, observations, case studies, secondary data and archival sources and experimentation are the prime methods to design research strategy for collection and processing of data.

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

management, lower management and supervisor level.

2.6. Data Analysis

Data analysis is elaborated as Processing observations in order to draw out their meanings (Stake, 1995, p. 170).Data analysis is a most significant part of the research process as the aim of the research assists the researcher in the development of future findings in both empirical data as well to some extent the theoretical background. The research phenomena is presented to the readers from different angle along with the displaying the data to the readers in a simple display. The information gathered from the interviews along with the reports and records of the company was used in the process of deductive process. Yin stated that descriptive theoretical frameworks rely more on prior experience and what you expect to occur (Yin, 2003 in Saunders et al, 2009, p. 496) and accordingly will straight the information study procedure. For the examination of the specific data structure, Saunders et al (2009) propose the mixing of the types of procedures: summarizing, grouping and structuring of meanings. In works of the other researchers we have found classification of phases of data analysis such as data reduction, data display and drawing and verifying conclusions (Miles and Huberman, 1994). The data gathered from the interviews was primarily sort of supporting material because the questions were more related to the selected company and therefore does not opt to support the factor of generalizibility. Although the interviews are summarized in order to give more insight about the personal aspect on the topic of research. The five stage model of Deloitte is a secondary source to show the empirical aspect as well it is explaining the theoretical perspective to show the outsourcing life cycle model and it is beneficial to explain the experiences of company from the business perspective in the interview references and procedure.

2.7. Validity and Reliability

The two most important criteria to measure and evaluate the authenticity and correctness of the research are validity and reliability. Jonker and Pennink (2009) explain study as reliable when the condition is that it can provide similar results a second time round (Jonker and Pennink, 2009, p. 103). On the other hand, the perspective of reliability according to them is based on an integral assessment of the

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.

CHAPTER THREE: LITERATURE REVIEW 3.0 Introduction:

This chapter contains various theories and past empirical studies carried out on outsourcing services. The available literature is a critical evaluation of previous research models and theories to explore and investigate the actual causes, benefits and risk associated with outsourcing services.

3.1 Types of Outsourcing

3.1.1 Basic types of Outsourcing: 1. Business Process Outsourcing (B.P.O.) It is a specific process that a client requires external services to accomplish task (business-outsourcing.co.uk). Doe to the significance of accomplishment of task, a professional expertise is required by the outsourcers and service providers assist them by their expertise, which also turns out to save time and other resources for outsourcers.

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).

3.4 Controlling risk:

Domberger, (1998) identified and divided risk in two broad categories such as risk associated with the activities and risk related to outsourcing. The previous empirical researches have strongly suggested that a gap widens between the suppliers and purchasers when risk increases and the control keep getting aside. Bromage (2000) suggests strategic outsourcing is the shifting of companys risk to service providers. The risk is divided between the both parties due to a formation of partnership and it is beneficial for both parties (K&K, 2000; and Quinn 199).

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).

3.5 Managing organisational change:

The social costs are the main cause of changes and number of researchers has considered that outsourcing decisions tackle the changes in the in-house decisions. It is not often welcome as at times people are reluctant to change so change can cause discomfort known as Perennial gale of creative destruction (Schumeter, 1943, p. 84, cited by Domberger, P. 133). This indicates from outsourcing a possibility of internal resistance and anxiety may occur. But outsourcing is viewed as a tool to manage effective change. For example, a company may lose a good chance to get a high quality services from labour market if rejects to outsourcing. Changes are permanent and once outsourcings intentions are clearly defined, organizations must have a good flow of communication to erase employees and departments unrest.

CHAPTER FOUR: DATA ANALYSIS AND RESULTS 4.0 Introduction:

This chapter contains the analysis of data generated from in-depth interviews. It explains the actual risk identification process in medium size enterprises. This chapter also explains the interview results after categorizing it in different stages of outsourcing process and serves a strong foundation for generating solutions to the research questions.

4.1

Empirical Part of Research:

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

4.1.1 Interview at Pre-Contractual Stage

Top management
What is the main reason behind Outsourcing services? What type of services is insourced? What type of services is mostly outsourced? What are initiatives for outsourcing services? Is any strategic assessment done prior to outsourcing? How risk assessment is done by the company? Qualified staff, costs

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,

Customer services, software maintenance IT development department, Management

Administration and management Partial

Management

Administration

Partial

No

Yes

Contractual, political, cultural & financial risks

especially financial

personal Information

references feedback of clients asked

and

What is the size of outsourced activity by particular level of management?

50% employees in customer services. 80% employees in IT sector. 40% in software.

40-50% in customer services. Above 70% in IT. 40% in Software maintenance

Above 50% in customer services and software maintenance and above 80% in IT development.

Above 50% in all three departments of the organization.

Table 1: Interview at Pre-Contractual Stage

Main Reasons for Outsourcing

35 30 25 20 15 10 5 0 Top management Middle Lower Management Management Supervisor Qualified Staff, Better services flexibility costs

Chart # 1: The main reasons for outsourcing in the organization.

Insourced services
40 35 30 25 20 15 10 5 0

Customer Services Software maintenance Software development

Chart # 2: Reveals the insourced services by the respective organization.

Most widely outsourced

50 45 40 35 30 25 20 15 10 5 0 IT IT IT IT development development development development

Top management Middle Management Lower Management Supervisor

Char # 3: Most commonly outsourced by the organization.

Inititative for outsourcing services

45 40 35 30 25 20 15 10 5 0 Top Middle Lower management Management Management Supervisor

Manangement Administration & Management Administration

Chart # 4: The initiatives for the outsourcing of services according to different level of organization.

Strategic assesment prior to outsourcing

50 45 40 35 30 25 20 15 10 5 0 Top management Middle Management Lower Management Supervisor

Yes Partial No

Chart # 5: The strategic assesment before outsourcing services.

Risk assesment by Organization

40 35 30 25 20 15 10 5 0

Top management Middle Management Lower Management Supervisor

Chart #6: Explains the type of risk assesment done by the organization.

Size of outsourced employees in three sectors

Employees in Customer service 80% 50% 50% 70% 40% 40% 50% Employees in IT sector 80% 50% 50% 50% 50% Employees in Software Sector

Top management

Middle Management

Lower Management

Supervisor

Chart# 7: Outsourcing employees in three sectors of organization

4.1.2 Interview about outsourcing at Contractual Stage

Top management
What is the risk consideration? Control over business processes & knowledge, possibility of contract termination

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

How the vendor is selected?

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?

Local visits & fulfilment of organizations CSR requirements One week

Results of performance in trial tasks Not more than two weeks

Personal impression.

At least one week and at most two weeks The quality being above market average Yes

One week

Through own local manager

Evaluation centre and local manager

Yes

Yes

Through internal system of evaluation by internal authorities Yes

Table # 2: Interview about outsourcing at Contractual Stage

Consideration about risk

70% 60% 50% 40% 30% 20% 10% 0%

Top management Middle Management Lower Management Supervisor

Chart # 8: Consideration regarding various risks

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

Top management Middle Management Lower Management Supervisor

Chart # 9: Selection criteria of vendors for outsourcing.

Time Duration for negotiation

50 45 40 35 30 25 20 15 10 5 0 One week 0ne week Two weeks Two Weeks More than two weeks

Top management Middle Management Lower Management Supervisor

Chart # 10: Time frame for negotiations.

Measurement of success or failure

50 45 40 35 30 25 20 15 10 5 0 Through Own The Quality Local Manager Above Average Market Evaluation Centre Through Internal systems by Internal authorities

Top management Middle Management Lower Management Supervisor

Chart # 11: Measuring failures or success about performance of outsourced sector.

Renogotiations necessary in outsourcing

50 45 40 35 30 25 20 15 10 5 0 Yes Yes Yes Yes

Top management Middle Management Lower Management Supervisor

Chart # 12: Essentiality of renegotiations in outsourcing process.

4.1.3 Interview about outsourcing after Execution Stage

Top management
What type knowledge transferred vendors? of in IT development

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?

Yes, Too great extent Email, cell phone, Skype 80%

Yes Skype, Cell phone

70%

65%

Table # 3: Interview about outsourcing after Execution Stage

Most probable transfered knowledge

50 45 40 35 30 25 20 15 10 5 0 IT development Software maintenance Customer services Customer base knowledge and Ideas

Top management Middle Management Lower Management Supervisor

Chart # 13: Probable transfered knowldge through outsourcing.

Monitoring helps avoiding risk

50 45 40 35 30 25 20 15 10 5 0 Yes Yes Yes Yes

Top management Middle Management Lower Management Supervisor

Chart # 14: Monitoring assist organization in avoiding risk and uncertainties.

Mode of communication
50 45 40 35 30 25 20 15 10 5 0 Top management Middle Management Lower Management Supervisor

Email Skype Cell phone

Chart # 15: Mode of communication according to different levels of management in the process of outsourcing.

Risk controlled by means of communication

50 45 40 35 30 25 20 15 10 5 0

Top management Middle Management Lower Management Supervisor

Chart # 16: Communication plays a vital role in controlling risk.

4.2 Data Finding Analysis and Discussion:

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).

CHAPTER FIVE: CONCLUSION 5.0 Introduction:

In this chapter the research is concluded on the basis of earlier conducted primary and secondary research. This segment of the research also contains answers to research questions, followed by limitation and at the last part of this chapter implication of research to manager, theory, and future researchers are discussed.

5.1 Overall Conclusion

At the start of the research, we had a problem statement that what are the causes of outsourcing services in the household industry with special reference to Reckitt Benkiser. Our findings explain that qualified staff, better services, and cost are some of the causes that urge Reckitt to outsource its various services. Huddle also identified the economic benefits and better competitive approach as the reasons for driving organizations to outsource services. On the basis of our research findings it can be concluded that there exist a strong correlation between the risk management and outsourcing and medium size organization consider risk at all three stages and to accommodate the risk properly there is a renegotiation pattern so that to great extent risk is properly identified and tackled. We can also conclude now that the aim of the research identifying the causes of outsourcing in the household industry, respectively Reckitt and how the risk management is linked with the outsourcing strategies in the broad spectrum is accomplished as we have explored and noted the important reasons for outsourcing in the Reckitt and with each stage of outsourcing process risk is managed by the organization according to their strategized plan and patterns. The risk is managed by the measurement and most of the time the selection of vendor is one of the major risks therefore local managers monitor the selection and entire process. The trial is one of the ways to manage risk in a proper dimension and the negotiation starting from precontractual to execution stage where it can be renegotiated within a week is an organized and well thought plan to manage associated risk. Our objectives defined at the start of research was put together to accomplish our aim

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.

5.3.1. Implication for Managers

The completion in the market is getting healthy due to outsourcing services which makes it essential for small and medium size enterprises to commit limited resources (between 20 - 50% of all businesses) in order to be alert of the major future threats. Our aim is the provision of recommendations about managing and identifying risk. The decision of what and how to manage in real situation is beyond control but a panel of professional risk analyzers should be develop to manage the risk in more adequate manner. The professional consideration is essential as it will save time, resources as well help organization accommodate problem in fine manner.

5.3.2. Implication for Theory

Since there is limited theory on the selected topic therefore, our research will be an important part of the literature for the future researchers to establish more important notions related to particular topic. Our findings are unlike the previous empirical researches because findings revealed that qualified staff and high quality servicers in IT are reasons for outsourcing but literature focused on cost reduction.

5.3.3. Implications for Further Research

Risk management in outsourcing process is useful as it will serve as literature for future researchers. Since our research is not an end but a mean to reach and open new dimensions for the researchers. These limitations of our research will serve ground for future researcher to develop hypothesis and continue work in these blocked dimensions. Future researchers should include more models and conduct a comparative study to explain different steps of process. In the end, more investigation could be made within the diverse organisational types such as micro- small- and medium-sized enterprises including level of vendor dependence. This could bring more accurate outcomes in analysis and theory.

References:
Ansley, M., 2000. Virtual Manufacturing. CMA Management for Strategic Business Ideas. (February), 31-35 Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. Blumberg, D. (1998). Strategic assessment of outsourcing and downsizing in the service market. Managing Service Quality, 8(1), 5-18. Acs, Z./ Audretsch, D. (2005), Handbook of Entrepreunership Research, Springer, New York. Amiti, M./ Wei, S. J. (2004), Fear of Service Outsourcing: Is it justified?, in: IMF Working Paper October 2004, International Monetary Fund, Amsterdam. Anderson, P. (2010), Tools of the outsourcing trade, in: Material Handling Management, Volume: 65, Issue: 1, Penton Media Inc., Cleveland. Aron, R./Singh, J. V. (2005), Getting Offshoring right, in: Harvard Business Review, Volume: 83, Issue: 12, Harvard Business Publishing, Boston. Aundhe, M. D./ Mathew, S. K. (2009), Risks in offshore IT outsourcing: A service provider perspective, in: European Management Journal, Volume: 27, Issue: 6, Elsevier Ltd., Amsterdam. Bahli, B./ Rivard, S. (2003), The information technology outsourcing risk: a transaction cost and agency theory-based perspective, in: Journal of Information Technology, Volume: 18, Issue: 3, Palgrave McMillan, Houndsmills. Blumberg, B. (2008), Business Research Methods, McGraw-Hill, Berkshire. Bryson, J.R./ Keeble, D./ Wood, P (1997), The creation and growth of small business service firms in post-industrial Britain, in: Small Business Economics, Volume: 9, Amsterdam. Carter, S./ Dylan, J. (2006), Enterprise and Small Business: Principles, Practice and Policy, Pearson Education Limited, Essex. Chadee, D./ Raman, R. (2009), International outsourcing of information technology services, in: International Marketing Review, Volume: 26, Issue: 4, Bradford.

Chou, D. C./Chou, A. Y. (2009), Information systems outsourcing life cycle and risks analysis, in: Computer standards & interfaces, Volume 31, Elsevier, Amsterdam.

Clarke, A. (2006), Small and medium-sized enterprises (SMEs) and corporate governance: politics, resources and trickle-down effects, in: Keeping Good Companies, Allbusiness, San Francisco.

Colwill, C. (2009), Human factors in information security: The insider threat Who can you trust these days?, in Information Security Technical Report 14, Elsevier Ltd., Amsterdam.

Coyne, F. J. (2009), Embed your risk management, in: Bests Review, Volume: 110, Issue: 6, A. M. Best Company Inc., Oldwick. Datta, A. (2010), A Comparative Study of Capital Project's Risk Development and Management, in: AACE International Transactions, Morgantown. Deloitte (2008), The risk intelligent approach to outsourcing and offshoring, Issue: 8, Deloitte Development LLC, New York. Dus, D./ Nassimbeni, G./ Sartor, M. (2009), IP protection in service offshoring: a self assessment model, POMS 20th Annual Conference, Florida. Domberger, S. (1994) `Public Sector Contracting: Does It Work?' The Australian Economic Review, Third Quarter: 91-96. Fersht, P./ Stiffler, D./ OMarah, K. (2009), Then Ins and Outs of Offshoring, in: Supply Chain Management Review, Volume: 13, Issue: 2, EH Publishing Inc, Framingham.

Goddard, W./ Melville, S. (2007), Research Methodology: Introduction, Juta and Company Ltd, Lansdowne. Grant, R. (2010), Contemporary Strategy Analysis, John Wiley & Sons Ltd, Chinchester. Grnroos, C. (1998), Marketing services: the case of a missing product, in: Journal of Business & Industrial Marketing, Volume: 13, MCN University Press, New York.

Gummesson, E. (1987), Lip service a neglected area in service marketing, in: Journal of Services Marketing, Volume: 1, Number: 1, American Marketing Association, Chicago.

Hayward, C., 2002. Out of site. Financial Management. 16 (February), 26-27.

Hemmington, N. & King, C. (2000). Key dimensions of outsourcing hotel food and beverage services. International Journal of Contemporary Hospitality Management, 12(4), 256-261.

Hahn, E. D./ Doh, J. P./ Bunyaratavej, K. (2009), The evolution of risk in information systems offshoring: the impact of home country risk, firm learning, and competitive dynamics, in: MIS Quarterly, Volume: 33, Issue: 3, Management Information Systems Research Center, Minnesota.

Hall, E. T. (1976), Beyond culture, Anchor Books Editions, New York. Henschel, T. (2008), Risk Management Practices of SMEs, Berlin: Erich Schmidt Verlag GmbH. Hill, C. W. L. (2006), International Business, 6th edition, McGraw-Hill, Boston.

Holland, L. (2010), Small Business Outsourcing: Cut Costs, Gain Skills, http://www.articleclick.com/Article/Small-business-outsource-to-cut-costsand-gain-quality/1646518, accessed: 03rd of October 2012.

Holmstrm, B./ Roberts, J. (1998), The boundaries of the firm revisited, in: Journal of economic perspectives, Volume 12, Number 4, The American Economic Association, Nashville.

Huddle, J. (2011), Speaking of, in: Cabarrus Business, Volume: February 2011, Comfort Publishing, Concord. Jabbour, L. (2010), Offshoring and Firm Performance: Evidence from French Manufacturing Industry, in: The World Economy, Volume: 33, Issue: 3, Nottingham.

Johnson, W. (2010), Advantages and Disadvantages of Private Limited Companies, http://www.ehow.com/list_6800627_advantages-disadvantages-privatelimited-companies.html, accessed: 23rd of August 2012. Jonker, J./ Pennink, B. (2009), The Essence of Research Methodology: A Concise Guide for Master and PhD, Springer, Berlin. Kelly, T. (2011), Understanding Outsourcing, www.globalenvision.org, accessed: 20th of May 2011. Kakabadse, N. and Kakabadse, A. 2000. "Critical review-Outsourcing: a paradigm shift". Journal of Management Development, Vol. 19, 670-728.

KaKumanu, P. & Portanova, A. (2006). Outsourcing: Its benefits, drawbacks and other related issues. Journal of American Academy of Business, 9(2),1-7. Ketter, P. (2008), Companies need to manage outsourcing risks, in: Training + Development, Volume: March 2008, American Society for Training & Development, Alexandria. Kuadriga (2011), SCRUM - our favorite development methodology, http://kuadriga.com/working-with-us/scrum.aspx, accessed: 28th of September 2012.

Lacoma, T. (2010), The Disadvantages of IT Outsourcing for SMEs, http://www.ehow.com/list_7458939_disadvantages-outsourcing-smes.html, accessed: 23rd of August 2012.

Lavigne, K. (2010), Web of risk, in: Canadian Underwriter, Issue: August 2010, Business Information Group, Ontario. Lewin, A. Y./ Ajchariyawong, N. P./ Sappenfield, D./ Arid, C. (2010), Is the global outsourcing industry in for a no-holds-barred competition?, 2009 ORN service provider survey report, Durham.

Langfield-Smith, K., Smith, D., 2003. Management control systems and trust in outsourcing relationships. Management Accounting Research. 14(3), 281307.

Lovelock, C. (1992), Are services really different?, in: Lovelock, C. (1992.), Managing Services Marketing, Operations, and Human Resources, PrenticeHall, Englewood Cliffs.

Lukacs, E. (2005), The economic role of SMEs in world economy, especially in Europe, in: European Integration Studies, Volume: 4, Number: 1, University of Miskolc, Miskolc.

Mac, A./ Bhaird, C. (2010), Resourcing Small and Medium Sized Enterprises: A Financial Growth Life Cycle Approach, Physica-Verlag & Co.: Heidelberg. Macintyre, M./ Parry, G./ Angelis, J. (2011), Service Design and Delivery, Springer, New York. Mag, O. (2010), SME Outsourcing, in: Outsourcing Magazine, Issue: September 2010, EMP Plc., London. Marczyk, G. (2010), Essentials of Research Design and Methodology. John Wiley & Sons Ltd, Chinchester.

Mayer, C./ Steingart, G. (2009), Global Crises Will Define Obama's Presidency, http://www.spiegel.de/international/world/0,1518,602266,00.html, accessed: 13th of August 2012.

Mei, L./ Th., C. (2009), Triads in services outsourcing, in: Journal of Supply Chain Management, Volume: 45, Issue: 3, Nevada. Meijer, R. (2009), Outsourcing and Information Security, in: IBM Global Technological Services, Issue: February 2009, IBM, Amsterdam. Mennen, M. (2010), Applied Research Methods for Business and Management- Job Satisfaction, GRIN Verlag, Norderstedt. Miles, M. B./ Huberman, A. (1994), Qualitative data analysis: an expanded sourcebook, SAGE Publications, Beverly Hills. Parameswaran, S. (2009), Managing risks in offshore outsourcing

relationships, in: Siliconindia, Volume: 12, Issue: 4, Siliconindia, Bangalore. Porter, M. (1980), The competitive advantage of nations, The free press, New York. Prahalad, C. K./ Hamel, G. (2001), The core competence of the corporation, in: Harvard Business Review, Volume: 68, Issue: 3, Harvard Business School Publishing, Boston. Quinn, J. B./ Hilmer, F. G. (1995), Strategic outsourcing, in: The McKinsey Quarterly 1995, Number 1, McKinsey & Company, New York. Rivard, S. (2005), A Framework for Information Technology Outsourcing Risk Management, in: Database for Advances in Information Systems, Volume: 1st of October 2005, Allbusiness, San Francisco. Rosin, H./ Daim, T. (2009), Managing offshore outsourcing in the software industry, in: Technology Analysis & Strategic Management, Volume: 21, Issue: 7, London. Rottman, J. W. (2006), Successfully Outsourcing Embedded Software Development, in: Computer, Volume: 39, Issue: 1, IEEE Computer Society, Washington. Rustichini, A./ Siconolfi, P. (2004), Efficient Equilibria in Economies with Adverse Selection, University of Minnesota, Minnnesota. Saunders, M./ Lewis, P./ Thornhill, A. (2009), Research Methods for Business Students, Pearson Education, Essex.

Schmiemann, M. (2008), Eurostat: Statistics in focus, European Communities, Luxembourg. Seth, S. (2008), Outsourcing/Offshoring: An IT Security Expert's View, http://pcworld. about.net/od/softwareservices/Outsourcing-Offshoring-An-

IT.htm, accessed: 18th of August 2012. Sichtmann, C./ Von Selasinsky, M. (2010), Exporting Services Successfully: Antecedents and Performance Implications of Customer Relationships, in: Journal of International Marketing, Volume: 18, Issue: 1, Institute of International Marketing, London. Stake, R. (1995), The art of case research, Sage Publications, Thousand Oaks. Stare, M. A./ Rubalcaba, L. (2009), International Outsourcing of Services: What Role for Central and East European Countries?, in: Emerging Markets Finance & Trade, Volume: 45, Issue: 5, M. E. Sharpe, New York. Stuart, A. (2011), Offshore Outsourcing: For Smaller Companies, Too, in: CFO, Volume: 25th of May 2011, CFO Publishing LLC, New York. Tafti, H. A. (2005), Risk factors associated with offshore IT outsourcing, in: Industrial Management & Data Systems, Volume: 105, Issue: 5, Emerald Group Publishing Ltd., Exeter. Tate, W. L./ Ellram, L. M./ Bals, L./ Hartmann, E. (2009), Offshore outsourcing of services: An evolutionary perspective, in: International Journal of Production Economics, Volume: 120, Elsevier, Amsterdam. May, A. (1998). Business process outsourcing: A new test of management competence. Career Development International, 3(4), 136-141. Mclvor, R. (2005). The Outsourcing Process: Strategies for evaluation and management. Cambridge University Press: N.Y. Schniederjans, M. & Zuckweiler, K. 2004. A quantitative approach to the outsourcing-insourcing decision in an international contest. Management Decision, 42(8), 974- 986. Simke, J., 2000. Emerging trends in outsourcing, CMA Management for strategic business ideas, (February), 26-27. Shanthi, K. E., (2007). Knowledge Process Outsourcing: Perspectives And Practices, Publisher ICFAI University Press, 2007, Page 75-78

Vatave, S. (2004), Managing Risk Through A Better Performance Review Process, in: Training, Volume: 1st October 2004, Allbusiness, San Francisco. Verma, H. V. (2009), Services Marketing: Text And Cases, 2nd edition, Dorling Kindersley, Delhi. Walliman, N. (2001), Your research project, SAGE Publications, London. Weber, A. (2006), Automation vs. Outsourcing, in: Assembly Magazine, Volume: December 2006, BNP Media, Troy. Zatolyuk, S./ Allgood, B. (2004), Evaluating a country for offshore outsourcing: software development providers in the Ukraine, in: Information Systems Management, Volume: 21, Issue: 3, Fairleigh Dickinson University, Madison.

Zechnich, D./ Lee, C. (2009), Contract risk and compliance for all economic seasons, in: Financial Executive, Volume: 25, Issue: 7, Financial Executives International, Morristown.

Yadav, Vanita & Metri, B. A.

(2006). Outsourcing Cnotract success: A

Quality Management Perspective. International Journal of Innovation in the Digital Economy (IJIDE, 1(4), 41-53) Zhu, Z., Hsu, K. & Lillie, J. (2001). Outsourcing a strategic move: The process and the ingredients for success. Management Decision, 39(5), 373378.