**6. The outsourcing decision model**

*Outsourcing and Offshoring*

adopting outsourcing through a clear understanding of the contribution of each operational activity and its relation to organizational core competencies. Second, the need to analyse the appropriateness of the organization's outsourcing decision in the context of organizational strategy and its effect on organizational performance is another area of concern. There is absence of any performance evaluation framework for identification of the attributes (drivers) and their relative rank order for assessing organizational performance as a consequence of an outsourcing decision. In view of the advantages and short-term as well as long-term challenges, it may be worthwhile to develop a framework that can provide guidance to the practitioners faced with the dilemma of retaining activities in-house, or enter into outsourcing in a transactional manner, or to maintain an alliance relationship with the service provider. Last but not the least, one of the primary challenges of the organization is how to maintain an outsourcing arrangement with the service providers so that current competitive position along with a sustained business performance is maintained over an extended period of time. So, the identification of critical success factors for developing and maintaining a sustainable outsourcing relationship between the service provider and the client may be another area of research.

In this reference, it may be noted that apart from few studies conducted by the management consulting firms like the Indian Chamber of Commerce and Deloitte Consulting, there has been very limited studies on outsourcing for the coal mining organization specific to the Indian context. The existing literature does not adequately focus on the outsourcing decision support based on a strategic perspective that may facilitate the mining managers in outsourcing decision-making for the organizational activities. Adequate studies with a focus on the identification of key drivers for the assessment of organizational performance as a consequence of an outsourcing decision are limited in the extant literature. Studies on organizationlevel outsourcing decision strategies in the context of the coal mining organization in India have been rarely considered. Further, the literature on a structured approach that takes into account the sustainable relationship management aspect of the coal mining organization and its service providers in regard to the long-term competitiveness of the organization is also limited. Thus, reviewing the existing literature and considering the above-mentioned gaps, a comprehensive outsourcing

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**Figure 2.**

*The graphical representation of the outsourcing decision model.*

### **6.1 Decision support to facilitate the outsourcing of organizational operational activities**

The study emphases on developing an outsourcing decision support to help management make a more informed decision on outsourcing of the operational activities. The decision support is in regard to the outsourcing decision of operational activities to be strategic rather than an aggressive one. Besides, defining the candidates for outsourcing, the decision support may contribute towards the identification of core, partial core, and non-core activities through a logical phased approach based on their contribution towards the organizational competencies. Thus, comprehending the contribution of each operational activity towards the organizational competencies allows the management to check for its strategic soundness and thus help in retaining the competitive position of the organization.

#### **6.2 Identification of key drivers for evaluation of organizational performance on account of an outsourcing decision**

Outsourcing is considered to be one of the strategic options for organizations to improve their business performance. Determination of the unexplored attributes (drivers) and their comparative rank order for the assessment of organizational performance out of an outsourcing decision is another area of research to be taken into consideration [65]. The analysis comprising of both quantitative and qualitative attributes based on the cognition of the decision makers may contribute to a thorough understanding of a practical real-life problem and could help managers in long-term decision making. Understanding the effect of the unexplored attributes may also benefit management of the organization to develop policies in maintaining competitive advantage in the market.

#### **6.3 Determination of optimal outsourcing strategy for the operational activities**

The outsourcing decision problem, also known as the make-buy decision of an organization is well-considered as one of the strategic decisions of any organization. The extant literature on the make-buy decision has been predominantly classified into two categories. The first one is related to the financial issues based on Transaction Cost Theory (TCT) whereas the second rests on strategic issues. There are several methods and approaches conferred in the earlier studies addressing such make-buy decision problems. The present study emphasizes on an organizational decision support to assess the optimal outsourcing strategy among insourcing (in-house), outsourcing (involving external service provider), and strategic alliance (partnership) relationship for operational activities of an organization [66].

#### **6.4 Sustainable relationship management in view of the long-term competitiveness of the organization**

The focus is to identify the factors responsible for establishing and maintaining a sustainable relationship between the third-party service provider and the client organization. In this era of globalization, when service providers are value-adding

partners, trust, commitment, and long-term orientation are the key elements in maintaining a buyer–supplier relationship. Literature has witnessed a relationship characterized by such aforementioned traits not only help to better serve the customer but also intensifies mutual benefits. Investigation of relevant antecedents pertaining to trust, commitment, and long-term orientation have seldom been used in light of an on-going outsourcing relationship and are areas of concern.
