gender differential paper IJCRB

ijcrb.webs.com
JUNE 2011
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 3, NO 2
must be considered in outsourcing: The first is the economic approach under which we consider the
viability of the product or the customer to the general position of the organization. We consider the
degree of the economic contribution of each segment, and consider the contribution of the segment
to be dropped or deleted. A positive contribution means viability and such cannot be eliminated,
while a negative contribution means non-viability and such can be dropped. If the contribution is
zero, the decision to drop the segment depends on the management. The second economic approach
is the relevant qualitative factors like, the impact of the closure of the segment on the company’s
goodwill, the effect of the closure on the total turnover of the organization, the shareholders attitude
towards the decision to drop the segment, the creditors position about the closure whether to write a
petition for winding up, the effect on the workers welfare and morale, and consideration of another
restructuring option like diversification, merger or being acquired by another company. The decision
to outsource must be carefully taken it will involve longer-term considerations, capital expenditure
and revenues.
FOCUS
This paper sets out to examine the effects of outsourcing in order to gain competitive advantage in
core areas of performance. Three fundamental problems are indentified in depressed Nigerian
economy which need resolution (1) There is the manifestation of high operating costs which have
negative impact on profitability and return on capital employed (ii) There is sub-optimality in the ineffective
utilization of resources, as poor management of assets, poor monitoring of assets and poor
replacement capability of assets have mar capacity utilization. (iii) Companies inability to recognize
and institute competitive advantage of services and products in core areas of professional
specialization.
The objectives of this paper are to (i) Examine the relationship between high operating cost and
profitability/return on capital employed.(ii) Assess the impact of ineffective utilization of resources
on sub-optimality in production (iii) Examine the relationship between outsourcing of
services/product and competitive advantage.
The key research questions are: (i) Can operating cost negate profitability and return on capital
employed in the service industry? (ii) What is the strength of ineffective utilization of resources on
sub-optimality in production? (iii) Is there any relationship between outsourcing of services and
product and competitive advantage?
This paper will research into a product that is critical to the operations of the service sector which is
leasing. Lease or buy decision of Company’s vehicles and equipment for operational activities
formed the major focus of this paper. The vehicles and equipment are the staff buses, the operational
vehicles and vehicles attached to departments, high powered generators in their profits, cost and
investment centers. However, the foregoing concerns, which have generated some worries in the
heart of the researchers, have necessitated the study in this area. The layoffs that often result, and
even in cases where the service provider hires former employees, they are often hired back at lower
wages with fewer benefits, (Egger, et al 2006).
Leasing option in outsourcing: According to Uchegbu (2001), leasing is a contract between two
parties, the lessor and the lessee of the asset whereby the lessee agrees to pay periodic rents to the
lessor in return for the exclusive right of using the asset. The lease can either be a finance lease or an
operating leasing. A finance lease is a system where all or substantially all of the benefits, burdens
and risks of ownership are transferred to the lessee at the expiration of the lease agreement.
Ownership of the asset is transferred to the lessee at the end of the lease period. This type of lease
covers the major part of the useful life of the asset, with or without transfer of title to the lessee. An
operating lease on the other hand is a lease where all the benefits, burdens and risks of ownership lie
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