An Empirical Research On The Relationship Between Outsourcing And Enterprise Performance

With the globalization of economy, the trend of specialization and the progressive development of information technology, facing the new business environments of market diversification, technologies' substitution and products' lifecycle shorten, enterprises increasingly begin to focus on the development of core capability and to stress on the corporation with other enterprises. Therefore, outsourcing as a new management pattern is abstracting more enterprises' attention. On one hand, using outsourcing can help reducing the cost, avoiding the unnecessary capital plunging, getting more resource and production capabilities outside, improving products' quality, focusing on core capability, improving self-flexibility and dispersing business risks, so as to improve enterprise performance. On the other hand, outsourcing may decline the organization's innovation ability, and then make enterprises lose some technologies and producing capabilities; outsourcing may lead to decline the controllability of the activities, and then make outside suppliers growing up to be the self-competitors. Therefore, whether outsourcing influence enterprise performance or not, and how influence? The paper will study the question above in two areas with the case of Manufacturing firms in Zhejiang province: (1) what are factors influencing enterprise' outsourcing intension? The paper will consider enterprise feature and motivation of outsourcing to study the question. (2) whether and how outsourcing influence enterprise performance? Except researching on the direct relation between outsourcing and performance, the paper will use enterprise strategy and environment dynamic as controlled variables for our research on relation between outsourcing and performance. The result of our research is: the outsourcing motivation nowadays is mainly to improve self-flexibility rather than improve products' quality, reduce the cost and improve service level. There is positive relation between outsourcing and finance performance, negative relation between outsourcing and innovation performance, no significant relation between outsourcing and stakeholder performance. Strategy is the controlled variable between outsourcing and finance performance: there is positive relation under the cost strategy but negative relation under the differentiation strategy. The environment dynamic will not influence the relation between outsourcing and enterprise performance.