Why Not Outsourcing in Health Care by the Use of Friedman’s Two-way Analysis of Variance?

Abstract

Abstract Background and Objectives: In the recent business environment, organizations are motivated to carry out a few key functions in-house and shed the rest to outside sources through aggressive outsourcing. This is done to reach early to the market at a reduced cost and gain the agility to face unforeseen challenges of the market to gain competitive advantages. Materials and Methods: Even though Outsourcing is seen as an attractive option to manage, considering the advantages in the reduced level of investment and requirement of involvement of in-house expertise, thereby reducing or sharing the risk of the outsourcer with the service providers. However, outsourcing is often encountered with severe losses of outsourcer’s resources with a detrimental impact on the advancement of in-house expertise and learning process, thus reducing the level of service to its customers. Friedman’s two-way analysis of variance test is widely used, as the computation for arriving at the result of the finding is trouble-free for samples that do not require the characteristic of “normality of the sample”. Results: The attributes selected are limited to six which were assigned “rank” by “14” experts or respondents diligently chosen for this case analysis. The variables are needed to be assigned rank in ordinal scale and there is no restriction concerning the sample size. Friedman’s calculated value as per the above formula is 304.82, where is the statistical value of Friedman’s Chi-square at 0.05, 13° of freedoms = 22.36 for the number of the column that is “6” with the degree of freedom of 13 (14–1) and significance level of 5% that is 0.05 as found 22.36. Conclusions: In this study, an attempt has been made to examine the underlining determinants of outsourcing and the relationship between the darker side of outsourcing which result in reluctance among the decision-makers and managers of health-care centers in embracing outsourcing as a strategic tool for developing core competence of their respective organization upon which the competitive advantage vis-a-vis its competitors are based for a sustainable performance amid the complexity of the business.