Outsourcing performance and Overall Firm Performance in the Banking Sector: The Moderating Role of Monitoring

The study examined the impact of outsourcing performance on overall firm performance, and the moderating role of monitoring. Seventy-seven (77) operations or branch managers of banks in the Ashanti region were sampled for the study. A hierarchical regression model was employed after the validity and reliability of the measurement items were checked using Confirmatory factor analysis. The results indicate that outsourcing performance significantly influences overall bank performance. Monitoring had a positive effect on overall bank performance. Furthermore, monitoring was also found to moderate the effect of outsourcing performance on overall bank performance. Since outsourcing is concluded to enhance overall performance with effective monitoring, banks must therefore ensure that they don’t just engage the services of outsourcing agents to perform their non-core business activities or functions for them, without putting in place the right monitoring mechanisms. The banks must therefore ensure that they put in place the right monitoring mechanisms in place to deter workers from engaging in activities that are not related to their main task in order to benefits from the outsourcing program. The study is novel as not much has been done in the banking industry regarding the performance of outsourcing activities of banks in Ghana. Theoretically, empirical studies to test the moderating effect of monitoring on the relationship between outsourcing activities performance and overall bank performance is limited.