Risk and Benefit of Outsourcing in Southern Part of Ethiopia: A Case of MAA Garment and Textile Factory

Abstract

The main objective of this study is to assess the perceived and existed benefits and problems of outsourcing on two outsourced functions of the organization. To select respondents for this study purposive sampling were used. The collected questionnaires were analyzed by using Statistical Package for the Social Sciences (SPSS) computer program. As result of the study indicated both outsourced functions brought many benefits to the organization. The most important benefits are focus on core activities, Cost and efficiency saving, continuity and risk management and operational control. Hence, the managers of the organization have gotten relief on following the routine problems which is related to noncore activities. On the contrary, the factory faces little challenges which can easily avoided, these are Loss of managerial control, Bad publicity and Tied to the financial well-being of other company.