INFLUENCE OF OUTSOURCING ON THE COST MANAGEMENT

Ivana Drazic Lutilsky (), Martina Dragija () and Anita Krnjic
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Ivana Drazic Lutilsky: Faculty of Economics and Business, University of Zagreb
Martina Dragija: Faculty of Economics and Business, University of Zagreb

Economy of eastern Croatia yesterday, today, tommorow, 2015, vol. 4, 281-293

Abstract: The goal of this paper is to research whether the outsourcing is directly influencing on reduction and control of expenses of companies, but also, indirectly on enhancement of competitive advantage of companies. Lately, the companies encountered numerous changes but one of the most important was the one that concerned customers’ needs. In the midst of world economic crisis which, besides affecting the companies, did not bypass the buyers, mostly express buyers’ requirements for products, namely services of high quality, with relatively low price. Companies, trying to attract the buyers, make their best to reduce the expenses where the purpose is to provide the price acceptable to the buyers. Very often, as the possible solution for reduction and control of expenses, comes the outsourcing as the possible solution. In this paper we are writing about outsourcing that explains company's efforts and resources on strategic activities, where the other activities are singled out and let to external specialized partners all with the purpose of focusing on primary activities, as well as to reduction of expenses and increase of the quality. Intensive changes did not bypass the Croatia either. For that reason the research was done in 2014 to establish if outsourcing is possible answer to ever growing demands for reduction and control of expenses. Conducted research has showed that the companies operating within the Republic of Croatia implemented, at the most, outsourcing for the purpose of reduction of operating expenses and they stated reduction of expenses as their primary reason for engagement of external partners. Managers in Croatian companies find outsourcing as the solution for managing expenses, where the solution of research shows that outsourcing reduces the operating expenses from 5 to 10 %. Outsourcing can be considered as good strategy for managing expenses, but, as almost every solution, gives positive and negative impacts. But outsourcing also contains, within negative effects, the question of quality.

Keywords: outsourcing; cost management; competitiveness; companies; Republic of Croatia (search for similar items in EconPapers)
Date: 2015
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