The effects of outsourcing on organisational performance: case study of selected financial institutions in Sunyani Municipality

The study set out to examine the effects of outsourcing on organisational performance, focusing on selected financial institutions in the Sunyani Municipality. Guided by a positivist paradigm and a descriptive research design, the study utilised a sample of 120 respondents across six financial institutions. Data was collected through structured questionnaires and analysed using both descriptive and inferential statistical techniques. The findings revealed that outsourcing is not restricted to specific departments but cuts across all areas of the institutions’ operations. Respondents largely agreed that outsourcing enhances organisational performance by enabling firms to free up resources for core competencies and improving their competitive position. Furthermore, the study established that functional departments, service quality, outsourcing costs, and outsourcing risk all have significant and positive effects on performance. The model’s adjusted R-squared value (68.4%) confirmed that these variables strongly explain variations in performance among the studied institutions. Overall, the study concludes that outsourcing remains a vital strategic tool in the financial sector. It reduces risk, enhances the efficient utilisation of resources, and improves competitiveness. The research, therefore, encourages financial and corporate organisations to adopt well-structured outsourcing strategies as part of their operational practices. However, the study also recognises its limitation in focusing on only selected variables. It recommends further research into additional factors—such as technological capabilities, regulatory environments, and employee adaptability—that may also shape the relationship between outsourcing and organisational performance.