Outsourcing Strategy: Achieving Competitive Advantage

resources in achieving competitive advantage

Outsourcing has become a popular and much sought after strategy in gaining competitive advantage to firms in the present era. However, this mentioned strategy could also bring about changes within the organization, be it working patterns, management styles or organizational culture which can disrupt the activities of the company. In avoiding such disruptions, a measured approach should be taken towards change management and how the resources could be reallocated in gaining advantages.

T.F Cawfey & Gene Desceza, their book organizational change, refer to organizational change as “a planned alternation of organizational components to improve the effectiveness of the organization”. Organizational

For change to be successful, the implementation efforts need to fit the organizational context. Following is a context sensitive approach for Amana Takaful was developed by Julia Balogun and Veronica (2002)

Time Concerned with long term strategic development

Scope The change through outsourcing will affect certain departments of Amana, and as the departmental functions are interdependent will affect the company as whole. The outcome here is to realign the resources to support competitive advantage

Perseverance All component pertaining to the core competencies such as the systems, structures and hierarchies, databases should be protected

Uniformity There is a relative homogeneity in terms of values and attitudes. Staff groups mostly identify each other as separate divisions which has teams as sub cultures. For example: the sales department of Amana has brokering unit, key account management & direct sales staff.

Capability Although previous experience of handing change is absent within Amana, almost every department have individuals competent in handling change; hence they can be the leaders of

Main components of effective mission had being identified in (Hooley et al, 2004, cited in Hooley etal,1992) . The current mission statement of Amana display the core skills and differential advantages although customer target isn’t mentioned of. But it cannot be revised entirely due to the induction of the “guiding principle of the business model – Shariah” into the statement.

2.1.2b Internal Change Objectives

Increase in the flow of knowledge and skills of employees by 3% in the first two years

Provide training and development needed to adopt to changed jobs by the end of 2017

Additional allocation of 15% of the company budget in order to maintain sub contractions in the first year and 20% in 2018.

Service channel optimization increase by 8% to support smoother flow of outsourcing in the first 2 years

Establishment of common business practices between the new suppliers and Amana

Achievement of 2% performance orientation in the year 2017 due to being able to focus on core functions, as a result of the