EFFECTS OF OUTSOURCING STRATEGIES ON THE ORGANIZATIONAL PERFORMANCE OF FAST FOODS INDUSTRY IN LAGOS STATE

By

AKINBOLA OLUFEMI AMOS CUGP100234

Presented To

Department of Business Administration and Management

ABSTRACT
 
Presently, the fast food industry in Nigeria  is undergoing very rapid change and explosive
growth and it has been argued that outsourcing strategies adopted have contribution to the
growth of the sector due to its relevance and potentials for the economy. As such, this study
tried to  ascertain  the significant effects of outsourcing strategies  on the organizational
performance of fast food companies in Nigeria as regards cost reduction, customer
relationship and corporate profitability. About 300 questionnaires were administered  to 10
selected fast food companies in Lagos state  to get primary data that treated appropriate
research questions and three  hypotheses were tested accordingly .  The study found that
outsourcing so far has positively affected the performance of fast food industry  and the
results indicated that the industry has benefited from outsourcing its business process to
reduce cost of operation. Also the study discovered that outsourcing of certain technical
aspects of business that has to do with knowledge and professionalism enhance customers’
relationship.    The  study recommends that fast food companies should sustain business
relationships that would assists in transaction negotiation with outsourcing vendors to boost
the profitability of firms.

TABLE OF CONTENTS
 
TITLE PAGE - - - -   i
CERTIFICATION - - - -   ii
DECLARATION - - - -   iii
DEDICATION - - - -   iv
ACKNOWLEDGMENT - - - -   v
ABSTRACT - - - -   vi
TABLE OF CONTENTS - - - -   vii  
LIST OF TABLES - - - -    x
 
CHAPTER ONE: INTRODUCTION                                                         
10    Background of the Study - - -   1  
11   Statement of Problem - - -   2  
12    Objective of Study - - - - - - - - -   4
13    Research Questions - - - -   4
14    Research Hypotheses - - -   5
15    Significance of the Study - - - - -   5  
16    Methodology of the Study - - - - 6  
17    Scope of study - - - -   7
18    Limitation of the study - - - - -   8
19     Outline of Chapters - - - - -   8                             
110    Operationalization of Research Variables - -   9  
111   Definitions of Terms - - - - 10   
          
CHAPTER TWO: LITERATURE REVIEW
20      Introduction - - - - -   13
21     Conceptual Framework - - - -   12
211  The Concept of Outsourcing - - - - 12  
212  Evolution of Outsourcing - - - - 14  
21 3  Nature of Outsourcing in Nigeria Fast Foods Industry - - - 15  
214  Types of Outsourcing - - - - 16  
215  Reasons for Outsourcing - - - - - 18  
216  Process of Outsourcing - - - - 19  
217  Benefits of Outsourcing - - -   21  
218  Drawbacks of Outsourcing - - - 24  
219  Outsourcing Principles - - - - 27  
2110   How Outsourcing Is Organized - - -   27  
2111   Key Requirement for Effective Outsourcing - -   29  
2112  Selecting Outsourcing Vendor - - - 30
2113  Quality of Outsourcing Relationship - - - 32
2114 Outsourcing Activities and Role of Performance - - 33
2115 Quality Measures In Outsourcing - - - 34
22  Theoretical Framework - - - - 36
221  Core Competencies Theory - - - - 36
222  Transaction Cost Economics - - - - 37
223  Relational View - - - - - 38
224  Resource-based View - - - - 38
22  Empirical Framework - - - - 39
22  Gap in Literature - - - - - 43
 
CHAPTER THREE: METHODOLOGY
30   Introduction - - - - - -   45
31   Research Methods - - - -   45
32   Research Design - - - -   46
33      Population of the Study  - - - 46
34   Sample Size Determination - - -   46
35   Sample Technique   - - - - 48
36  Sample Frame - - - - - - 48
37   Sources of Data Collection - - - 49
38  Research Instruments - - - - 50
38  Validity of Research Instrument  
39   Reliability of Research Instrument - - - 50
311   Method of Data Analysis - - - 51
 
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
40   Introduction - - - - - - -   53
41  Presentation of data collected from the consumers - - - - 53
42  Data analysis and interpretation - - - 54  
43  Testing the hypotheses and discussion of result - -   71  
 
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
50   Introduction - - - -   76
51   Summary of Work - - - - 76  
52   Summary of Findings - - - - 77  
521  Theoretical Finding - - - - 77  
522  Empirical Findings - - - - 79  
53   Conclusion - - - - - 80  
54   Recommendations - - - - - - - 81  
541   De- Limitation of Studies - - - 81
55   Suggestions for Further Studies - - - 82
REFERENCES - - - -   83  
APPENDIX - - - - -   91


LIST OF TABLES
 
Table 3101:    Reliability Statistics - - - - 51   
Table 411:      Distribution of Questionnaires - - - 53   
Table 4211:   Sex Distribution of Respondents - - - 54
Table 4212:   Marital Status of Respondents - - - - 54
Table 4213    Work Experience of the Respondents - - - 54
Table 4214    Management Category of Respondents - - 55
Table 4215    Educational Qualification of the Respondents - - - 55
Table 4216    Age Group of Respondents - - - 56  
Table 4217:   Organization of the Respondents - - - 56
Table 4221:   Outsourcing of Business Operation Equipments - - 57   
Table 4222: Outsourcing of Organization’s Security Department - - 57
Table 4223:Outsourcing of Cleaners/Service Personnel - - 58
Table 4224: Outsourcing the Supply of Raw Materials - - - 58
Table 4225: Outsourcing of Front-Liners/Sales Officers - - 58  
Table 4226: Outsourcing of Kitchen Staff - - - 59
Flow - - - - - - 65
Table 42222: Our Outsourced Advertisement has Assisted in Building Good Relationship with our Customers - 66
Table 42223:   Our Outsourcing of Brand Image Has Increased Our Customer Loyalty - - - - - - 66
Table 42224: Research and Development has Helped us know and Understand our Customers More - - - - 67
Table 42225 Our Outsourced Public Relations has Built a Stronger Customer Relationship for our Company - - - 68
Table 42226:  Business Turnover Has Been Satisfactory - - 68
Table 42227:  Corporate Revenue Has Significantly Increased - - 68
Table 42228: Employee Efficiency and Effectiveness Has Been Satisfactory - 69
Table 42229: Outsourcing Strategies Adopted by our Organization Enhance Profitability - - 69
Table 4230: The Basic reason(s) why your Organization should Outsource - - 69
Table 4231: The Benefit(s) of Outsourcing in your Organization - - 70
Table 4232: The Benefit(s) of Outsourcing in your Organization - - 70
Table 431: Computation of Regression Test Statistics for Hypothesis 1 - - 71
Table 432: Computation of Regression Test Statistics for Hypothesis 2 - - 72
Table 433: Computation of Regression Test Statistics for Hypothesis 3 - 73
Table 4227: Outsourcing of Confectioners (Cakes Pastries and Ice Cream) - 59
Table 4228:   Advertising of the Organization and Its Products Is Outsourced - 60
Table 4229:   Branding of the Company Image is Outsourced - - 60
Table 42210:  Research is carried out by our organization - - 61
Table  42211: Outsourcing of Public Relation functions - - - 61
Table 42212:  The Packaging of Our Product/Packaging Materials Is Outsourced - 61
Table 42213:   Management of Information and Communication Technology  (ICT) by the
Organization   - - - - -   62
Table 42214: Outsourcing of Organizations Points Of Sales (POS) Terminals - 62
Table  42215: Leasing of Cash Register Machines to other Organizations -    63
Table 42216:  Monitoring of Electronic Surveillance by the Organization     - 63
Table 42217: Outsourcing of Business Processes to Reduce Cost of Operation - 63
Table 42218: Outsourcing of Kitchen Operation to Professionals to Reduce Cost of
Operations - - - - - 64
Table  42219:  Outsourcing of the Purchase of Raw Materials Reduces Our Cost of
Operation - - - - - - 64  
Table  42220:  Outsourcing of Some Departmental Functions Reduces our Cost of
Operations - - - - - 65
Table 42221: Outsourcing of Some of our Business Equipments  Increases our Cash