THE EFFECT OF OUTSOURCING HUMAN RESOURCE ON ORGANIZATIONAL PERFORMANCE: THE ROLE OF ORGANIZATIONAL CULTURE

Abstract

The improvement that high organizational performance provides is becoming more critical in today’s increasing conditions of competition. The effects of human resource functions and organizational culture to perform a significant organizational efficiency attracts both theoreticians’ and practitioners’ interest much more. When outsourcing is considered as one of the methods that organizations utilize for strengthening their core competencies to allocate their resources efficiently, the question of the degree to which human resource functions could be outsourced brings in mind the effect of organizational culture enabling outsourcing on organizational performance. Besides performing the administrative services such as catering, cleaning, employee transportation, and security as outsourcing, operations of some human resource practices like training and payroll via outsourcing contribute the desired performance positively by means of only true strategy and organizational culture shaping the strategy. The performance of human resource management and the viewpoints of employees about outsourcing have critical importance to improve a convenient strategy. In this literature research, what kind of human resource practices can be outsourced and can add value to organizational performance are discussed. The influence of workers’ changing attitudes about outsourcing towards organization in detail and the effect of organizational culture in the mentioned relationships are missing in the literature.

Keywords

• Human Resource Management, Organizational Culture, Outsourcing, Organizational Performance

References

1. Abdul-Halim, H.; Che-Ha, N. (2009), ‘The influence of business strategy strategy on the decision to outsource human resource activities: A study of Malaysian manufacturing organizations’, Journal of Human Resource Costing & Accounting, Vol 13, No: 4, 2009
2. Abu-Jarad, Ismael Younis, Nor’Aini Yusof, Davoud Nikbin (2010), “A Review
3. Paper on Organizational Culture and Organizational Performance”, International Journal of Business and Social Science, Vol. 1, No. 3, pp. 26-46
4. Adler, P. (2003), ‘Making the HR Outsourcing Decision’, MIT Slogan
5. Management Review, Fall, Vol 45, No 1, 53-59
6. Applebaum, S., Simpson, R., Shapiro, B. (1987), ‘The Tough Test of
7. Downsizing’, Organizational Dynamics, 16, 2, 68-79
8. Belcourt, Monica (2006), “Outsourcing - The benefits and the risks”, Human

9. Resource Management Review, Vol. 16, pp.269-279
10. Bustinza, O. F. D. Arias-Aranda, L. Gutierrez-Gutierrez (2010), “Outsourcing, competitive capabilities and performance an empirical study in service firms”,
11. International Journal of Production Economics, Vol. 126, pp. 276–288 Cooke, F. L.; Shen, J., McBride, A: (2005), Outsourcing HR as a competitive strategy? A literature review and an assessment of implications’, Human
12. Resource Management, Vol 44, No: 4, 413-432
13. Cooper, C. L., (1999), ‘Can We Live With the Changing Nature of Work’,
14. Journal of Managerial Psychology, 14, 569-572
15. Corby, S. (1998), ‘Industrial Relations in Civil Service Agengies: Transition or Transformation’, Industrial Relations Journal, 29,3, 194-207
16. Daft, Richard L. (2000), Organization Theory and Design (7th ed.), South
17. Western College Publishing, Thomson Learning, U.S.A. Day, George S., Robin Wensly (1988) ‘Assassing Advantage: A Framework
18. Diagnosic Competitive Superiority’, Journal of Marketing, 52, 1-20
19. Delmotte, J., Sels, L. (2008), ‘HR Outsourcing: Threat or Opportunity?’,
20. Personnel Review, Vol 37, No: 5, 543-563
21. Dress, G; Gupta, A; Hennat, J., Hill, C. (1995), ‘Conducting and Integrating
22. Strategy Research at International, Corporate, and Business Level: Issues and Directions’, Journal of Management, 21, 3, 357-393
23. Elmuti, Dean (2004), “The Perceived Impact of Outsourcing on Organizational
24. Performance”, Mid-American Journal of Business, Vol. 18, No. 2, pp.33-42
25. Elmuti, Dean; Julian, Grunewald; Dereje, Abebe (2010), ‘Consequences of outsourcing strategies on employee quality of work life, attitudes, and performance’, Journal of Business Stratejies, 27, 2
26. Espino-Rodriguez, Tomas F., Victor Padron-Robaina (2004), “Outsourcing and its impact on operational objectives and performance: a study of hotels in the Canary
27. Islands”, Hospitality Management, Vol. 23, pp.287-306
28. Espino-Rodriquez, T. F., Padron-Robaina, V.(2005), ‘A resource- based view of outsourcing and its implications for organizational performance in the hotel sector’, Tourism Management, 26, 707-721
29. Gainey, T., Klass, B. (2003), ‘The Outsourging of Training and Development:
30. Factors Impacting Client Satisfaction’, Journal of Management, 29, 2, 207-229
31. Galanaki, E. , Papalexandris, N. (2007), ‘Internationalization as a determining factor of HRM outsourcing’, Int. Journal of Human Resource Management, 18, , 155
32. Giardini, A. , Kabst, R. (2008) ‘Recruitment Process Outsourcing: A scenario study on the acceptance of outsourcing in Peronel selection’, Zeitschrift für
33. Personnalforschung, 22, 4, 370-387
34. Gilley, K. Matthew, Charles R. Greer, Abdul A. Rasheed (2004), “Human resource outsourcing and organizational performance in manufacturing firms”,
35. Journal of Business Research, Vol. 57, pp.232-240
36. Gilley, K. Matthew, Abdul A. Rasheed (2000), “Making more by doing less: analysis of outsourcing and its effects on firm performance” Journal of
37. Management, Vol. 26, No. 4, pp.763–790 Greer, C. R., Youngblood, S. A., Gray, D. A. (1999), ‘ Human Resource
38. Management Outsourcing: The Make or buy decision’, The Academy of Management Executive, Aug, 13, 3, 85-96
39. Hamel, Gary, C.K. Prahalad (1994), Competing for the future, Boston: Harvard
40. Business School Press Hemmington, Nigel; Cristopher, King (2000), ‘Key Dimensions of Outsourcing
41. Hotel Food and Beverage Services’, International Journal of Contemporary Hospitality Management, 12, 4 Hendry, J: (1995), ‘Culture, Community and Networks: The Hidden Cost of
42. Outsourcing’, European Management Journal Vol 13, No 2, 193-200
43. Hofstede, Geert (1980). Culture’s Consequences: International Differences in
44. Work-related Values, Veverly Hills, California:Sage Jarvis, A., Mills, S., Desai, A., Subramony, M., Sridhar, B.S. (2006), ‘Employee
45. Reactions to Outsourcing: Development of Attitudes Toward Outsourcing (ATO) Scale’, Competition Forum, 4, 2, 405-413
46. Kessler, Ian and Coyle-Shapiro, Jacqueline A-M. and Purcell, John (1999)
47. ‘Outsourcing and the Employment Relationship: An Employee Perspective’, Human Resource Management Journal, 9 (2). pp. 5-19. Klaas, B. S., McClendon, J., Gainey, T. W. (2001), ‘Outsourcing HR: The Impact of Organizational Characteristics’, Human Resource Management, Summer, 40, , 125-137
48. Klass, B. S., McClendon, J., Gainey, T. W. (1999), ‘HR Outsourcing and Its
49. Impact: The Rple of Tranaction Cost’ , Personnel Psychology, Spring, 52, 1, 113- Kotabe, Masaaki, Michael J. Mol, Janet Y. Murray (2008), “Outsourcing, performance, and the role of e-commerce: A dynamic perspective”, Industrial
50. Marketing Management, Vol. 37, pp.37−45 Kshetri, N. (2007), ‘Institutional factors affecting offshore business process and information technology outspurcing’, Journal of İnternational Management , 13, 56
51. Lau, C. M., Ngo, H. M. (2004), ‘The HR System, Organizational Culture, and Product innovation’, International Business Review, 13, 685-703
52. Lee, Ruby P., Daekwan Kim (2010), “Implications of service processes outsourcing on firm value, Industrial Marketing Management”, Vol. 39, pp.853
53. Leimmbach, Michell P. (2005), ‘Invited Reaction: Outsouring Relationship
54. Between Firms and Their Training Providers: The Role Of Trust’, Human Resource Development Quarterly, Vol 16, Iss 1, 27-32
55. Lepak, D. P. , Snell, S. A. (1999), ‘The Human Resource Architecture: Toward a
56. Theory of Human Capital Allocation and Development’, Academy of Management Review, 24, 31-48
57. Lievens, F., Corte, W. (2008), ‘Development and Test ofa model external organizational commitment in human resource management outsourcing’, Human
58. Resource Management, Fall, Vol 47, No: 3, 559-579
59. Lim, Bernard (1995), “Examining the organizationalculture and organizational performance link”, Leadership & Organization Development Journal, Vol. 16 , No. 5, pp. 16-21
60. McIvor, Ronan (2008), “What is the right outsourcing strategy for your process?”,
61. European Management Journal, Vol. 26, pp.24-34
62. McIvor, Ronan (2005), The outsourcing process strategies for evaluation and management, New York, Cambridge University Press
63. Ndubisi, N. O. (2011) ‘ Conflict handling, trsut and commitment in outsourcing relationship: A Chinese and Indian Stduy’, Industrial Marketing Management, Vol 40, Issue 1, 109-117
64. Ngo, Hang-Yue, Raymond Loi (2008), “Human resource flexibility, organizational culture and firm performance:an investigation of multinational firms in Hong Kong”, The International Journal of Human Resource
65. Management, Vol. 19, No. 9, pg. 1654-1666
66. Norman, T. J. (2009), ‘Outsourcing Human Resource Activities: Measuring the Hidden Costs and Benefits’, Unpublished PhD Thesis, University of Minnesota
67. Ogbonna, Emmanuel, Lloyd C. Harris (2000), “Leadership style, organizational cultureand performance: empirical evidencefrom UK companies”, Int. J. of
68. Human Resource Management, Vol. 11, No. 4, pp.766-788
69. Prahalad, C. K., Gary Hamel (2003), ‘ The Core Competence of the Corporation’,
70. Harward Business School Publishing Copr, No 6528
71. Raiborn, Cecily A., Janet B. Butler, Marc F. Massoud (2009), “Outsourcing support functions: Identifying and managing the good, the bad, and the ugly”,
72. Business Horizons, Vol. 52, pp.347-356
73. Schouker, I. (2008), ‘ Making Outsourcing Work: From service agreement to partnership’, (Outsourcing and Human Resource Management, An International Survey, Ed. Ruth Taplin), Taylor- Francis
74. Yang, D. H., Seongcheol Kim, Changi Nam, Ja-Won Min (2007), “Developing a decision model for business process outsourcing”, Computers & Operations Research, Vol. 34, pp. 3769 – 3778