critical final revised refs
TRANSCRIPT
CRITICAL APPRAISAL
Outsourcing decision processes: A case study of a Malaysian firm
This paper presents a critical appraisal of the case study Outsourcing decision processes: A
case study of a Malaysian firm by Noradiva Hamzah, Aini Aman, Ruhanita Maelah, Sofiah
Md Auzair and Rozita Amiruddin. This paper aims at providing insight regarding the
research design, methodology and findings of the authors.
Authors
It is imperative to question the qualification, expertise and academic background of the
researchers. This allows the reader to build confidence about the researcher’s ability to meet
the study objectives. However, a study or research should not be entirely evaluated or
discarded in view of the qualifications and research history of the authors (Bluff & Cluett,
2006, p. 55). (BOOK)
Noradiva Hamzah, Aini Aman, Ruhanita Maelah, Sofiah Md Auzair and Rozita Amiruddin
are faculty members at the School of Accounting, Universiti Kebangsaan Malaysia, 43600
UKM, Selangor, Malaysia (Hamzah et al, 2010).
These researchers have had their research published in the past as well. The authors were
facilitated by the university to undertake this research and hence they could proceed freely at
their own pace with a broad horizon of study with defined parameters of their choice.
Title
The title of a research paper holds a lot of significance and thus the authors should pay due
consideration in giving title to their work. The title should be brief, concise and self-
explanatory so that the readers can understand the study objectives. (Newell & Burnard,
2006). The title of the paper in consideration is very effective in this regard. It may not be a
catchy title but it includes all the significant concepts discussed in the study like ‘decision’,
‘outsourcing’ and ‘processes’. The title explicitly tells the readers what the paper is going to
discuss, hence a good way to title the paper.
Abstract
The abstract of a paper should also be comprehensive enough to give the most insight about
the study in question making use of minimum words. The authors haven’t made use of flashy
words in the abstract, yet they have been able to explain the salient features of the research
paper. An abstract should be able to define the purpose, methodology and findings of the
study (Punch, 2009, p. 22). BOOK
The abstract of this paper sheds light upon the drivers of outsourcing accounting in an
organization and also how this outsourcing is raising concerns for the modern day companies.
Purpose of the study has been provided in the abstract to ‘understand the drives and processes
in accounting outsourcing’ with particular focus on a Malaysian company. Methodology has
been highlighted by stating that interviews were conducted with vendors and clients. The
findings have also been touched upon by concluding that there is no firm foundation used by
the company to evaluate its outsourcing decision.
Introduction
Noradiva Hamzah, Iain Aman, Ruhanita Maelah, Sofiah Md Auzair and Rozita Amiruddin
have been careful enough to present relevant historic findings in the introduction of the paper.
They also discuss the research question and purpose of the study. Traditionally, a good
introduction should comprise of study objective, background of the area in concern and also
the context in which it is discussed (Flick, 2009, p. 23).
The authors tend to explain in the introduction that the two main objectives of this paper are
to understand why Malaysian companies choose to outsource their accounting practices and
how they actually do outsourcing. Information has been provided in the introduction about
the background of the practice in question. This includes consideration of outsourcing in
logistical functions and repercussions of outsourcing decisions. The Malaysian business
environment has been discussed in particular by providing insights into how businesses in
Malaysia handle their outsourcing decisions. The research questions are also discussed in the
introduction.
Research Method
The title of this paper is explanatory of the research method followed. It is a case study. In
addition to being a case study, there have to be factors in a paper that further assist in
determining the course of study, approach and methodology adopted to critically understand
the case study. Case studies have known to be of three different types such as the intrinsic
case study, the instrumental case study and the collective case study. The instrumental case
study is done to present a broad understanding of a fact using a particular case (Punch, 2009,
p. 54). BOOK
This study can be categorised as an instrumental case study that tends to explain the
outsourcing decisions with particular reference to the case of a Malaysian firm. As explained
in the paper too that there has been a lot of work done on the decisions of outsourcing in
organizations and how these decisions impact the operations of firms. Thus this paper does
not develop some theoretical concept. Instead it focuses more on the verification of
theoretical validations. It can be said that a mix methodology has been used, the mix
comprising of both the qualitative and quantitative methods. Greater bent is towards the
qualitative approach. (Young, 2009).
Much of the findings presented in the paper have been formulated based on the scholarly
work of earlier researchers. Therefore it cannot be viewed as the subjective assessment of the
researchers. This qualifies the study to be more objective and increases the generalizability of
the findings of the research. (England, 2007).
Participants
The study clearly mentions the participants of the research and their particulars. The two
businesses involved in this research include the local Malaysian firm (client) and its local
outsourcing firm (vendor). Interviews and observations have been used as the possible
information sources. In total 14 interviews were conducted with the accountant, head of
corporate service division , head of finance and administration of the client firm and a senior
project manager from the vendor firm. The questions asked from each personnel were
tailored in a subjective fashion to know the dynamics and impacts of outsourcing in context
of the individual's professional background. The few involved participants may not be giving
the exact picture of the consequences of outsourcing. (Drapeau,, 2002).
Data collection and Analysis
In different types of research conducted, the aim is to draw analysis from the relevant data to
add to the concept in question (Shank & Villella, 2004). The data collected through
interviews has been merged with the findings regarding outsourcing decisions from the
literature. The tables generated about the drivers of outsourcing explicitly explain the
different variables involved in outsourcing decisions and the relevance of each variable.
Ethical Approval and Issues
Research today has to have strong ethical basis to qualify as effective. It is the duty of the
researcher to safeguard the privacy of the participants (Punch, 2009, p. 86). This paper was
published in the year 2010 and therefore it is expected that much of the ethical requirements
are met.
The paper however, itself does not give any indications as to what ethical guarantees have
been issued to the participants. The interviewed participants have mainly been professional
individuals hence a big concern for them would be the confidentiality of any information that
they provide. It can be assumed that the informed consent of the participants was involved.
Findings and Discussion
The research is a qualitative study and hence much of the findings have been clustered
together to draw upon results. Large portion of the findings have been derived from existing
literature and hence take a more narrative form in description.
It has been found that Depro has no sound base for assessing the outsourcing decision. It
would not be wrong to conclude that the outsourcing decision has been made to reduce costs.
Improvement driver is the primary force behind this decision to minimize the fixed costs by
outsourcing the accounting function. Depro, makes use of fund that was obtained from the
government to upkeep its operation. Issues of confidentiality and public money will have to
be taken into consideration. The company to be outsourced to also needs to be analysed very
critically. There have been areas that Depro has failed to undertake:
Should the company strive to maintain and build its capability in a particular activity
or turn to the best-in class source?
If there is a disparity between the company and supplier, how much investment is
required internally to match the capabilities of the supplier?
It has been indicated that Depro is not accomplishing the required benefits from outsourcing.
Its outsourcing decision is driven primarily by the motive to reduce short term costs (Bluff &
Cluett, 2006, p. 98, 105). BOOK
Conclusion
The conclusion of the research provides very objective results based on the literature. This
study satisfies both the queries of the research; it covers both the reason for and the method,
used by firms, to outsource certain accounting activities. The study establishes that a firm’s
decision to use formal budgeting depends on its size. The outsourcing decision process
incorporated by Depro did not go along the structured framework. Depro decided to
outsource the accounting function because of concern for low costs and also lack of
availability of sufficient staff. Depro did not undergo cost and benefits analysis before
deciding. The resulting decision to outsource primarily came from its close affiliation with
one of the local outsourcing dealer. The company’s top management was committed on the
general reimbursements of outsourcing that could be gained by outsourcing its accounting
work to BPA. Practically, this paper delivers comprehensions of the outsourcing decision
process in a Malaysian company. The outsourcing decision should be treated as a vital
business decision and cost analysis and risk analysis should be done to evaluate the external
capabilities versus the internal capabilities. However, in construing the results, the restraint of
this study should be recognized. As with other case studies, the use of one company limits the
capacity to generalize the outcomes to larger population of small service firms. The kind of
business functions that companies choose to outsource and the reason they outsource may
contradict and may also be inclined by their leader’s political and cultural influences (Shank
& Villella, 2004).
Additional Questions
Does this study use a theoretical or conceptual framework?
The paper clearly chalks out its theoretical framework by referring to specific theories that
the authors have made use of in building their findings. The authors talk about the six step
outsourcing process model as suggested by Choudhury as well as by Lee and Kim. In
addition to that, the paper makes use of the Fill and Viser’s outsourcing framework and thus
considers contextual factors, strategy, and structure as important variables. The first part of
the framework develops contextual factors that consider both quantifiable and non-
quantifiable criteria of external and internal factors. The second part of the framework
concerns with strategy and structure. Hence the theoretical and conceptual framework has
been used (Gray, 2009).
Is the study Qualitative or quantitative?
Quantitative research is characterized mainly with numerical data and qualitative research is
expected to explain findings in the form of words (Gray, 2009 & Smith, 2009). Research
today is mostly a mix of these two forms but there is literature that suggests that these two
types of research cannot overlap.
The paper presents its findings making use of both the quantitative and qualitative criteria.
Quantifiable criteria are costs, increased cover of fixed costs, investments and revenues.
Non-quantifiable criteria are of strategic interest, confidentiality, linkage with operations, and
stability of employment, management and dependence on suppliers. However, based upon
the methodology and findings of the paper we can conclude that it has greater bent towards
qualitative research (Thomas, 2009).
What paradigm is used in this study?
The theoretical structure of a research paper can also be termed as its paradigm. A paradigm
usually begins with a research question which is answered through the findings and
methodology of the paper (Punch, 2009, p. 87). This paper is structured on the dual approach
of making use of both the qualitative and quantitative methods instead of being based on
some particular methodological stance.
What are the purposes of this study?
Noradiva Hamzah, Aini Aman, Ruhanita Maelah, Sofiah Md Auzair and Rozita Amiruddin
have intended to analyze the outsourcing decision of firms in general with particular
reference to the case of a Malaysian firm. In addition to the specific mention of the firm
under study, theoretical background has also been touched upon. This study would come
under both a descriptive as well as an exploratory study as the author mentions in the very
beginning of the paper that work of same nature has not been produced in profusion.
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