Exploring the Relationship between Strategic Outsourcing and Organisational Performance: A Study of Nigerian Insurance Companies

Abstract

This study examines the relationship between strategic outsourcing and the performance of insurance companies in Nigeria with specific reference to the selected insurance companies. Purposive sampling technique was used to select top 10 best ranking insurance companies in Nigeria and five (5) staff members were select from each 10 insurance company, totaling 50 respondents as a sample size for the study.  A structured closed ended questionnaire designed for the study was used to collect the data from the respondents. Data analysis was performed with the aid of frequencies, percentages and correlation analysis.  Result reveals that strategic outsourcing has significant relationship with the performance of insurance companies in Nigeria.  The finding also establishes that core functions are largely arranged internally while security services, advertising and marketing, recruitment services and catering services functions are fully outsourced by most companies in Nigeria. Finding also reveals that company's attachment to its brand and processes; inability to develop clear objectives; inadequate supporting infrastructure; absence of performance measures and lack of top management support are the major challenges confronting the implementation of strategic outsourcing in most of the insurance companies in Nigeria. Subsequently, the study recommends that management should give maximum support for the implementation of the strategic outsourcing and enlightenment programme on the benefits of strategic outsourcing should be organised for all stakeholders to reduce the chances of resistance.