Determinants of Outsourcing Satisfaction: The Case of Slovenian SMEs

Tadej Smogavec, Darja Peljhan

Abstract


In contrast to large firms, small and medium-sized firms (SMEs) face different kind of challenges in outsourcing. The existing research on SMEs’ outsourcing is sparse and inconclusive. Therefore, the purpose of our paper is to find out whether managers of SMEs are in fact satisfied with outsourcing, and what affects their satisfaction. We conducted the empirical analysis on the sample of 249 SMEs. Our study extends the existing knowledge about outsourcing in SMEs, especially in the field of determinants that affect satisfaction with outsourcing. Our first contribution is the improved definition of outsourcing that can be used in all companies regardless of their size. This definition is better suited for the research of SMEs than existing definition that take into account larger companies. Second contribution refers to our finding that SMEs mainly perform strategic outsourcing that is based on ad-hoc collaboration, which is the opposite of the existing theoretical and empirical findings. This means that companies are exposed to bigger risks and lower satisfaction with outsourcing. We identified and discussed four determinants that affect satisfaction with outsourcing: reasons for outsourcing, credibility criteria (referring to external contractors), risk factors and outsourcing difficulties (problems). The credibility criteria have the biggest positive effect and outsourcing difficulties have the biggest negative impact on outsourcing satisfaction.

DOI: 10.15458/85451.48



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