The Influence of Outsourcing on Job Satisfaction and Turnover Intentions of Technical Managers

By Kennedy, James F.; Holt, Daniel T. et al. | Human Resource Planning, March 2002 | Go to article overview

The Influence of Outsourcing on Job Satisfaction and Turnover Intentions of Technical Managers


Kennedy, James F., Holt, Daniel T., Ward, Mark A., Rehg, Michael T., Human Resource Planning


Questionnaire data were collected from 469 low- to mid-level Air Force engineering managers who performed a support function that was to be outsourced. The survey was designed to explore the participants' reactions to the outsourcing strategy given that their jobs were secure but job changes were expected as the strategy was implemented. Specifically, the questionnaire assessed current job satisfaction, perceptions of outsourcing, and their career intentions. By testing a path model, results indicated that the technical managers' negative view of outsourcing reduced their job satisfaction and subsequently correlated to an increased desire to leave the organization. These findings, and their implications for HR managers, are discussed here.

Dwindling resources and market competitiveness have forced organizations to scrutinize their methods of producing goods and services and make changes in their processes in order to maximize economic returns. Outsourcing, or competitive sourcing, is one fundamental change made by private sector organizations to streamline business processes and bolster organizations' competitive positions. Indeed, many companies have outsourced human resource management functions like recruitment, training, and benefits administration. Outsourcing has migrated, however, from a small-scale tactical improvement strategy to a more pervasive philosophy where organizations are outsourcing almost every function such as engineering, research, development, and facility maintenance operations (Allen & Chandrashekar, 2000). In line with the private sector, public sector organizations have also embraced outsourcing to cut costs and refocus resources. Recently, even organizations with traditional attitudes of self-sustainment, like the mi litary, have outsourced important support activities (e.g., construction of camps for deployed forces in Bosnia was outsourced to a private vendor; Allen & Chandrashekar, 2000).

Essentially, outsourcing is the transfer of services or functions previously performed within the organization to a provider outside the organization (Johnson, 1997). Presumably, organizations benefit from this transfer because they can save money and refocus their resources on the organization's core competencies. Cost savings result because specialists that benefit from economies of scale can accomplish tasks more cheaply than organizational members accomplish the same tasks (Goldfarb & Naasz, 1995). Simultaneously, as functions are outsourced, leaders relieve their employees of mundane, repetitive, and basic tasks, allowing employees to focus their efforts solely on the core, value-adding activities needed for the organization to maintain its competitive advantage.

While these potential benefits of an outsourcing strategy are appealing, the actual success of any outsourcing strategy is predicated on a number of issues. First, in order to get the anticipated cost savings, researchers have argued that the service provider must have firm-specific knowledge, avoid opportunistic behaviors, and provide required services at sufficient levels (Ulrich, 1996). Second, the organization benefits from refocused resources only if it is able to retain its most competent employees and effectively reallocate these employees' efforts toward value-added tasks. If these requirements are not met, the all-too-predictable outcome of an outsourcing strategy will be an organization with a deteriorating financial situation that is missing the human resources necessary to turn it around.

This article investigates one specific aspect of the outsourcing problem: the retention of employees after an outsourcing strategy is initiated. Given the importance of keeping the existing employees in the organization to reap the benefits of outsourcing; this research investigates the influences that outsourcing has on employees' decisions to stay in an organization that is faced with outsourcing. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Influence of Outsourcing on Job Satisfaction and Turnover Intentions of Technical Managers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.