Which Management Level Decides To Outsource The Distribution Function?

Abstract

Outsourcing is one of the widest used methods of facilities management employed by organisations for doing business in today’s global economy which requires exceptional skills from management in order to be competitive and to have an advantage over competitors; and this situation is getting even more demanding.  The main purpose of the research is to evaluate consensus amongst the different levels of management to outsource the distribution function at a South African steel retailer.

The research survey was done in the form of a questionnaire utilising statements with a quantitative approach regarding six important aspects relating to the outsourcing concept of non-core business activities linked to the distribution operations of a steel company. The population selected consisted of the first three levels of management across all six of the business units.  Analysis of the data was done with the statistical package of social sciences SPSS and the applied pedometric techniques, such as Chi-square and ANOVA.  Findings and results from the analysis indicate that management, in general, is positive toward adopting outsourcing as a tool to assist them in business operations, but there seems to be a significant difference of opinion between middle and top management regarding the impact of the outsourcing concept.