Determinants of Outsourcing Satisfaction: The Case of Slovenian SMEs

Abstract

In contrast to large firms, small and medium-sized firms (SMEs) face different kind of challenges in outsourcing. The existing research on SMEs’ outsourcing is sparse and inconclusive. Therefore, the purpose of our paper is to find out whether managers of SMEs are in fact satisfied with outsourcing, and what affects their satisfaction. We conducted an empirical analysis on a sample of 249 Slovenian SMEs. Our study extends the existing knowledge about outsourcing in SMEs, especially in the field of determinants that have an impact on satisfaction with outsourcing. Our first contribution is the improved definition of outsourcing that can be used in all companies regardless of their size. This definition is better suited for the research of SMEs than existing definitions that take into account larger companies. Our second contribution refers to our findings that SMEs mainly perform strategic outsourcing that is based on ad hoc collaboration, which is the opposite of the existing theoretical and empirical findings. This means that companies are exposed to bigger risks and lower satisfaction with outsourcing. We identified and discussed four determinants that affect satisfaction with outsourcing: reasons for outsourcing, credibility criteria (referring to external contractors), risk factors, and outsourcing difficulties (problems). The reasons for outsourcing affect the satisfaction with regard to strategic outsourcing, the credibility criteria have an effect on satisfaction with traditional outsourcing, and outsourcing difficulties affect both.

Keywords

• outsourcing
• satisfaction
• risk
• smes
• traditional outsourcing
• strategic outsourcing