CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Outsourcing has been utilized for quite a long time, but much of the outsourcing until
the late 1990s was focused on informational technology outsourcing. The objective then was
often largely restricted to achieving operational efficiencies. In the past, the world has witnessed
a remarkably rapid growth in Business Process Outsourcing (BPO) to areas such as
manufacturing, product development and innovation. With Business Process Outsourcing, the
target is basically longer-term and it focuses on the achievement of the overall business benefits,
whether enhancing an organization‘s competitive position in the marketplace or
improving shareholder returns (Maku & Iravo, 2013).
As Cox (2014) states, as from the early days when it was viewed as little more than a
hohum tactic which aimed at reducing costs, outsourcing has now matured into a strategic
management tool. Global outsourcing market’s growth in the past years has been phenomenal,
and all indications are that the pace will continue in the coming years. In the face of increasingly
intensified competition in the emerging global economy, manufacturing firms are progressively
turning to outsourcing of some of their functions (Cox, 2014).
With an increasingly turbulent business environment, organizations are continuously
looking for better ways of gaining competitive advantage. One of the strategies that firms can
employ to acquire sustainable competitive advantage is contract manufacturing (commonlyknown as outsourcing). Outsourcing is considered to be basically that part of an organization’s
process, which is sourced from outside suppliers with no regard for the type of relation with
these suppliers (Kiongera, Wanyonyi, Musiega & Masinde, 2014).
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Many managers consider outsourcing as the only way to keep a business competitive in
this century. The highly turbulent business environment coupled with almost insatiable
customer demands for tailored services and products has forced companies to over time
evaluate, improve and re-engineer their operations. As Insinga and Werle (2000) noted, these
reengineered processes have a significant contribution to the efforts by organizations to wholly
satisfy customer needs and wants.
Cox (2014) asserts that every firm engages in outsourcing to some extent. Some firms
may outsource manufacturing, customer care and logistics, while others choose to outsource
after sales technical support, market research, product design and development. Cox further
states that while many manufacturing companies may not outsource the above value chain
activities, it is more common for most firms to outsource support activities such as accounting,
auditing, staffing, or administration. The decision regarding what functions to outsource and
which ones to keep in-house depends on many factors from company to company such as theneed to develop invest in resources, skills, and to stay abreast of to the evolving technology in
any areas kept in-house (Welch & Nayak, 1992).
Many organizations in Cameroon are now increasingly pursuing continuous improvement in
their performance. As Maku and Iravo (2013) noted, over the past two decades there has been a growing
recognition of the vital contribution of outsourcing strategy on the performance of organizations.
DANGOTE Douala is a cement grinding facility with a dedicated jetty for offloading
clinker directly to the plant. It was open in March 2015 as the first new entrant in Cameroon
cement market in 40years. It is a cement company that has three sectors wich include the plant,
the headquaters and the garage. Currently DANGOTE import clinkers from third party
suppliers. In time DANGOTE plans to import clinker from their factories in Nigeria which
guarantee a high quality material.
According to information gathered from the human resource office, the company has an
average employee count of about 1000 excluding casual laborers. With branches all over the all
country, DANGOTE being a production company with its logistics functions, it has different
departments which carry out different acctivities. 

1.2. Statement of the Problem
Many organizations in Cameroon in both private and public-sector face dynamics in
their operating environments. The public entities in the country are the most prone to these
changes given their reactionary strategies and slow response to change. DANGOTE is one of
private companies in Cameroon whose services are in an ever-increasing demand due to the
fact that it is mandated with ensuring people in the rural areas access to cement.
Following its creation in March 2015, DANGOTE had an aim to license its own drivers
because she wanted to focus on the core competence of the company which is production; she
decided to outsource her driving with companies like; TEFON HR and INTEL CONSULTING
HR.
Also, the lack of skilled drivers, cost reduction, delivery enhancement and quality services are
minor reasons why DANGOTE had to outsource its driving activity. The function of the
human resource in this organization plays a leading role in realizing the firms mission and core
objectives which draw us to the main focus of this study to find out how outsourcing human
resource has affected the performance of the organization.
1.3 Objectives of the Study
1.3.1. General Objective
The general objective of the study is to investigate the effect of outsourcing HR on
organizational performance. The case of DANGOTE Douala – Cameroon.
1.3.2. Specific objectives:
1. To determine how the outsourcing of personnel recruitment of DANGOTE Douala affects
employees‘ performance.
2. To find out how the outsourcing of employees‘ training affects the performance of
employees.
3. To determine the challenges associated with outsourcing of human resource.
4. To make suggestions and recommendations
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1.4 Research Questions
1.4.1 Main Research Question
What is impact of outsourcing HR activities on organizational performance?
1. What is the impact of outsourcing personnel recruitment of DANGOTE Douala on the
performance of employees?
2. What is the impact of outsourcing training by DANGOTE Douala on the
performance of employees?
3. What are the challenges associated with outsourcing of human resource to DANGOTE
`Douala?
4. What are the suggestions and recommendations?