Outsourcing and It’s Role on Performance Service Firms In Sudan

Abstract

Abstract This study concentrated on those companies performs logistics outsourcing in Sudan (industrial, telecommunication, logistics and manufacturing companies). Outsourcing concept has received much attention from both academics and practitioners in different industries. Sudanese business environment is not an exception and it has a high interaction with international business. For this reason, this research undertakes Resource Based View to deal with this concept. The study investigates the influence of internal capabilities variables (time, cost, flexibility and quality) on logistics outsourcing representing as mediating variable between internal capabilities and firm performance. The study also considers the influence of government role (government regulations, and information technology) as moderating the relationship between outsourcing and firm performance variables. Data were collected through direct questionnaire survey. A total of 116 usable responses were used for the purpose of this study. Factor and reliability analyses were performed and regression analysis was conducted to test the hypotheses. The findings provided empirical support for the theoretical framework. The results indicated that internal capabilities variables played a significant an important role in determining to outsource activities. Outsourcing had a significant influence on the Sudanese service firms financial performance, but not for the non-financial one. This study did not found any convincing evidence to support the mediation effect of outsourcing between internal capabilities and non-financial performance. Furthermore, the research results indicated that government regulations and information technology are significantly moderating the relationship between outsourcing and firm performance dimensions. Based on the study findings, theoretical and practical implications were discussed, limitations and suggestions for future research were also presented.