Factors affecting to long-term relationship of outsourcing: A case study of Thailand

Abstract

Outsourcing is very important for organizations to achieve better performance, such as cost reduction, core activities, and knowledge acquisition. Thailand is as known worldwide as a key outsourcing service provider. To know factors affecting to long-term relationship outsourcing are essential for the business continuities of Business Process Outsourcing (BPO) providers in Thailand. Based on literature review, this research proposed a model suggested that cooperation, control and improvement can affect performance and then further affects outsourcing long-term relationship. Using a data set collected from 322 questionnaire surveys via e-mailed, and 200 questionnaire surveys sent to personal to test the proposed hypotheses from June 1 to June 30, 2019. As a result, 219 respondents were used for data analysis (41.95 percent). To confirm our hypotheses, we use Partial Least Squares (PLS)–a variance-based Structural Equation Modeling (SEM) approach. The results showed that at 0.05 significance level, cooperation has a positive effect on the control. Moreover, cooperation and improvement have a positive effect on the performance and performance has a positive effect to outsourcing long-term relationship. This study provides some suggestions to outsourcing suppliers in Thailand to maintain or to extend their outsourcing relationships with their current customers.