A study of factors affecting to long-term relationship of outsourcing

Abstract

"Outsourcing" is very important for the organization's strategy to seek to reduce costs and specialize in a limited number of core areas. Thailand is known worldwide as a key outsourcing service provider. To know the factors affecting long-term relationship outsourcing are essential for the business continuities of Business Process Outsourcing (BPO) providers in Thailand. Based on the literature review, this research proposes a model that cooperation, control, and improvement will affect performance and then further affects outsourcing long-term relationship. Using a data set collected from 322 questionnaire surveys through e-mails, and 200 sent to personal to test proposed hypotheses from June 1, 2019, to August 31, 2019. As a result, 219 respondents were used for data analysis (41.95 percent). To confirm hypotheses, this study uses Partial Least Squares (PLS) – a variance-based Structural Equation Modeling (SEM) approach. The results showed that, cooperation has a positive effect on the control. Moreover, cooperation and improvement have positive effects on the performance and performance has a positive effect on outsourcing long-term relationships. This study provides some suggestions to outsourcing suppliers in Thailand to maintain and to extend their outsourcing relationships with their current customers.