Case Of Sabodala Gold Operations Commerce Essay

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This chapter will focus on introducing the subject indicating the background of the research whereby the literature review of the particular research topic discussed referring the previous published or unpublished information. Research problem will explain the aim of the research and mark the demarcation of a problem area. Research questions are setup in order to determine where and what kind of research, which identifies the specific objectives of the study addressed in this paper. Research objectives will summarize the expected achievement of this research paper. Once the research problem defined, it will be-translated to a research hypothesis that explains a relationship between two or more variable populations whereby the link between research problem, research hypothesis and the existing variable derived. Lastly, this chapter it will discuss justification, scope, limitations, and the conceptual framework of the research.

1.2 Background

This research paper centres on looking at the economic impact that arising from Business Companies that opt to outsource some of their activities. The main focus is to examine how outsourcing may influences the economics of the organization. Further, determine the main factors that lead to in-sourcing the activities that were already been outsourced. The process of outsourcing will be evaluated in order to identify the economic decision making considered for embarking on outsourcing and at when does the organization outsource.

The research based on the main key word outsourcing relating different streams of literature like industrial organization theory to understanding the concept of outsourcing. Also in the research uses insight from management literature to specify the research question. Furthermore, the research contributes to the literature through assessing the economic impact of outsourcing on business that outsources its activities the case of Sabodala Gold Operations (SGO). The study will focus SGO activities that owned and operated by Teranga Gold Corporations.

In a current competitive economy, companies deciding to perform some of their operational activities by using outside venders (i.e. outsourcing) for many years now [1] (Winkleman et al, 1993). In more than twenty years outsourcing has spread and developed quickly across the global and according to Gretton, Edward 2009, "the strategic importance of the sourcing decision and the factors behind it have become more theorised and researched". However, there are several researches that have been done on outsourcing concerning the benefits of outsourcing, there is still a need to further research this area in order to further explore the economic impact of outsourcing on business that outsource its activities in different areas as well those companies working in different areas with different goals.

In recent years, outsourcing has become a common form for organizations that subcontract their commercial activities to expand their productivity (Huimin. 2010). The aim of expanding productivity, accompanied with the restructuring of the organization in order to facilitate its activities that eventually will have an economic impact to the business itself. Due to the most economical impact brought by firms that outsource its functions has, increased the interest of researching in this field that has resulted in a number of literature published around this topic. The most attractive of these include 'The Analysis of the Impact of the Outsourcing: About its Advantages and Disadvantages on Economic Development'; 'The Perceived Impact of Outsourcing on Organizational Performance'; 'An Economical Analysis on the Effects of Outsourcing Revisited' 'Outsourcing : a business guide to risk management tool and techniques'; Outsourcing as a way of life? Knowledge transfer in the Yangtze Delta'.

Many organizations are looking at different ways of structuring their business for effective productivity and wining global market through outsourcing none-core activities. The most common outsources activities are-, information system and technology, payroll, accounting, pension administration, telecommunication, call Centre, supply chain, etc.

Business activities discussed in this research related to the value chain theory as developed by Michael Porter in the 1980s, which technologically and economically performed to do business, include core and support activities (Geurts, Karen. 2009). In research, there is discussion of the business functions that outsourced activities whether grouped in core or support activities as mentioned by Porter, (1985). From the work done by Geurts, K. (2009) when quoting Porter's value chain in dividing company's activities as primary and secondary activities; whereby primary activities includes production, assembly, transport and distribution, sales, and customer services. Secondary activities, which are supportive to primary process, like finance and accountancy, HRM, and training. In case of this research, the main activities are hauling, drill and blast, catering, maintenance and civil projects and gold processing.

The motive for this study is assessing the economic impact of outsourcing created by businesses that outsource their activities. Referring to Porter's influential work on competitive advantage "has encouraged managers to think of their business value chains, and to articulate strategic decision making with respect to individual business functions" (Geurts, 2009). Nowa-days many organizations are engaging in business processes that maximize value added of each value chain whilst minimizing costs (Davenport, 1993). Cost minimization while maximizing profit is one of the strategies of outsourcing business activities.

Although, there are different topics discussing outsourcing in several perspectives, this study will discuss the economic impact of outsourcing on the business that outsources its activities taking the case of Sabodala Gold Operations SA. This study intended to add value to the existing knowledge of outsourcing which is a prominent topic in the global competing business. The study will also add knowledge to the researcher [2] .

1.3 Research problem

The research motivation is to find an answer for the question, what is the economic impact of outsourcing on businesses that outsources their activities (Case Study of Sabodala Gold Operations). Outsourcing of business activities is one of the business strategies currently practiced by several organizations around the globe that draw up the interest of knowing what is the economic impact of outsourcing on the business that outsource its activities. In that matter, the purpose statement of this study is to investigate the economic impact of outsourcing on the Sabodala Gold Operations (SGO) business on outsourced activities.

1.4 Research objectives

1.4.1 Identification of the economic impact of outsourcing generated by Sabodala Gold Operations.

1.4.2 Evaluation of the key activities involved on the outsourcing as the business strategy.

1.4.3 Discussion of the different forms of business outsourcing.

1.4.4 Advantages and disadvantages of business outsourcing as well as the precaution and the steps to follow in order to have a healthy and lasting contract.

1.4.5 Expand knowledge area pertaining to business outsourcing issues by taking into account the origin and future of the outsourcing industry.

1.5 Research question

1.5.1 How does outsourcing influence the SGO business activities?

1.5.2 Why are business activities outsourced at SGO?

1.5.3 How does outsourcing is categorized?

1.5.4 How can outsourcing be advantageous or disadvantageous to the business?

1.5.5 How does outsourcing contribute to improving business activities?

1.6 Research hypothesis

The null hypothesis (Ho) of the research will be:

The outsourcing of business activities does have economic impact on the SGO business. On the other hand the alternative hypothesis (Hi) of the research will be, defined by the following statement. The outsourcing of business activities does not have economic impact on the SGO businesses.

1.7 Research justification

According to Gretton, Edward (2009), outsourcing literature, "covers a diverse set of business sectors from manufacturing to the IT industry and considers the wide ranging implications of success and failure of the sourcing model". However the existing of outsourcing for different sectors, still we need to do separate research as this at SGO to explore the economic impact of outsourcing business functions.

This problem is important at SGO as they are currently outsourcing the services of heavier machinery equipment to BIA, but recently take back to in-house the drilling section that was previously outsourced to EDS. The main purpose of this research is to focus on the decision maker of when to outsource and when to insource based on the economic impact to the business at the current time.

There are many possible types of outsourcing arrangements, all of which redefine the boundaries of the firm, which are dynamic in nature and subject to change over time. Therefore, performance measurement within the outsourcing process has become increasingly complex [3] .

It is clear that, before an organization decides whether to outsource part of its activities it is crucial to understand the effectiveness of outsourcing in organizational architecture and the global market (Kathawala, Zhang and Shao 2005). This is very important research area as many organization embarking on outsourcing without doing actual research as it is happening at SGO where by the outsourced activities now are taken in house.

1.8 Research scope

The scope of this research is to develop a better understanding of the economic impact on a business that outsources its activities. In order to accomplish the research based on a single company which is SGO whereby the outsourced business activities will be evaluated in considering to what are economic impacts generated from it. The activities involved in this research are heavy equipment engineering services, drilling services (currently done in-house), and blasting process done by Orica. The research will focus on the contract between SGO and the contracted companies, BIA, Orica, TrenTyre, Shell, Connexion international SARL, Ultim Mines Operations, Wartsila, Lycopodium, Minerex, SGS and EDS. The time of research is 2012 whereby the final report will be submitted before Sept 24th 2012.

1.9 Research limitation

The research is a case study for a single organization where by all sources of data will be limited at SGO business activities for the examination of the economic impact of outsourcing and all information will be for academic purposes only. The sampling of data will focus on a contracted few selected functions and the one taken back in-house. The aim is only to analyse the economic value generated. Data collection will be based on the selected contracted companies within SGO from the data base and the interviews with key stakeholders.

1.10 Conceptual framework

Diagram here

The first phase in understanding the economic impact of outsourcing of business activities at SGO involves a thorough review of the literature and answering the question whether outsourcing impacts SGO business. The next phase will be interviewing directly with the key stakeholders in the organization to elicit their views on how outsourcing can affect the economy of the organization and getting an understanding of the outsourced business activities. A series of structured/unstructured interviews will be conducted with senior management within SGO and with the selected contracting companies. Interviews will be carried out with senior key staffs members from a range of business functions within the organization in order to obtain a cross-functional perspective on economic impact of outsourcing and how the outsourcing is categorized. On the other hand the review of the previous documents concerning contracting for the aim of achieving the expected outcome of the outsourcing of the mentioned activities if there are any, to review how outsourcing could be advantageous or disadvantageous to the business. Lastly the research will look at, how outsourcing can contribute to the improvement of the business activities.

Conceptual framework will attempt to connect all aspects required in the research starting with problem definition, purpose, literature review, methodology, data collection and analysis.

Chapter two

Literature review

2.0 Introduction

Introduce the chapter

2.1 Why outsourcing

There is an unforeseen materialization of increasing international market for outsourcing of services as well production functions in the last decade. In today's world of yet increasing competition, several organizations forced to look for new ways to generate profit. As Karkukly W. (2010) [4] pointed out that "today's outsourcing; became an important practice in organizations with many organizations looking at ways to leverage external capabilities". Also DeMaiolo, D. (2009) cited that "in today's modern era, nearly every aspect of business has the potential to be outsourced from product design and manufacturing to human resources to marketing and sales;" furthermore "outsourcing has been going on for about as long as business have existed" (Bovée and Thill, 196-197). The main question to ask is that: what is the economic impact of outsourcing on business that outsources its activities [5] ?

One of the things appeared mostly used by organization in order to be hand in hand with the current world competition is outsourcing of activities. On the American Journal of Business that quoted "the world has embraced the phenomenon of outsourcing and companies have adopted its principles to help them expand into other markets" (Bender, 1999). Alternatively, Quinn, 2000) pointed out that strategic management of outsourcing is perhaps the most powerful tool in management, and outsourcing of innovation is its frontier.

Outsourcing of the different organizations activities started a long way back, but in the past decades became popular too many organization and attracted most researchers. Sher Torres pointed out, outsourcing of jobs; started by a number of companies in US even before the revolution of Information Technology. Outsourcing starts way back in early 90'S where by companies in US were seeking new business models to adopt the changes in the business industries [6] .

2.2 Defining Outsourcing

Outsourcing is considered as the "management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers", (Elmuti, 2003). On the other hand, "Outsourcing is nothing less than the wholesale restructuring of the corporation around our core competencies and outside relationship" (Corbett and Associates, 1999). Nevertheless, traditional outsourcing was only emphasizing on tactical benefits like cost reduction (e.g. cheaper labor cost in low-cost countries), in today's market this has been replaced by productivity, flexibility, speed and innovation in developing a business applications, and access to new technologies and skills (Greer, Youngblood, and Gary 1999; Bacon 1999 in American Journal of Business). On the other hand, Karkukly W. (2010) cited that outsourcing started in manufacturing in order to minimize cost and then moved into other vital organizational functions like finance, payroll, tax, HR, call centers, and services oriented. Also added that the field of outsourcing managed the smaller firm to grow by taking advantage of the outsourcing model and having access to the expertise and talent the large organization have (Brown and Wilson, 2005).

According to Karkukly, W. (2010) outsourcing is "a situation where one organization gives work to other firms, which can execute this work more efficiently, usually for lower costs, and whose capabilities complement or supplement their own" (Kancharla, 2007 p.59). DeMaiolo, D. (2009) defines outsourcing from the business perspective, as "simply means of having a component sourced externally from the firm that sells the final product to other consumers" (Kane, Schaefer, and Fraser, 2004).

Outsourcing is the practice of a country taking jobs from its own shores and sending them abroad, where wages are often lower and other conditions are favorable because they lower a company's overhead (Colvin, 2005). Lowering company overheads gives time for the management to put effort and improve resources to perform other core activities.

Companies like Sabodala Gold Operations (SGO) [7] in this study that outsources its activities should continue with the monitoring of contractor activities and establish constant communication (Guterl, 1996). Sometimes there are problems with outsourcing that mostly observed coming from workers themselves fearing loss of jobs (Malhorta, 1997).

This study designed to explore the economic impact of outsourcing on the business that outsources its activities in the case study of Sabodala Gold Operations. Whereby within the organization other activities transferred to another firm previously performed in-house on which according to (Geurts, Karen. (2009) is considered as outsourcing. This research will also examine the reason as to why SGO outsource its activities, the advantage, and disadvantage of outsourcing business activities and lastly how outsourcing contributed in improving business activities.

2.3.0 Literature Review

2.3.1 Outsourcing

In today's competitive markets, organizations should satisfy customers as well as shareholders. This may be achieved by improving service speed, flexibility, and response capability within the changing environment (Wee, Hui-Ming, Peng, Shu-Yun and Wee, Paul K.P. 2008) [8] . The major ranks of outsourcing agenda currently used across all business are well documented in the literature (Bender 1999; Quinn 2000; Dun and Bradstreet 2000; Klaas, McClendon and Gainey 2001 American Journal of Business fall 2003: Vol. 18 No. 2).

In the field of outsourcing, many researchers discussed outsourcing in different views, ideology, and paths. First, Elmuti, (Fall 2003 Vol. 18 No. 2) cited some researchers whose researches focused on motivations and reasons for outsourcing activities (Conner and Prahalad, 1996; Greer et al., 1999; Sinderman 1995; Mullin, 1996; Grant, 1996; Frayer, Scannell and Thomas, 2000). On the other hand Fritsch and Wüllenweber, (2007) cited that "A large part of the empirical literature addresses the interrelation between outsourcing and firm characteristics or firm performance before outsourcing takes place in order to evaluate the rationale for outsourcing decisions". And what determines outsourcing decisions according to Markus Fritsch and Kim Wüllenweber (ibid) is the low costs, low cash reserves, and declining growth rates. Smith, Mitra and Narasimhan (1998) added that the main motives for outsourcing are cost reduction as well cash generation.

Similarly Hall and Liedtka (2005) presented almost the same result indicating that outsourcing is determined by poor performance, poor cost control, and short term cash needs. Taking an example of the US banking industry Ang and Straub, (1998a) realized that IT-outsourcing best explained by high production costs and large size of the banks when looking at firm characteristics. Most of these findings show that firms in weak positions struggling with high cost and poor performance are likely to opt outsource IT-operations for the aim of picking best market positions (Fritsch and Wüllenweber, 2007). At this outlook the essential of outsourcing is that it will pick-up pace globally as most firms are changing from product selling to service providers in order to form operations in foreign countries as well staffing operations within host countries or third party nationals (Greer et al 1999).

According to Elmuti, (2003) organizations consider that in order to catch-up with the global competition they must look at ways of increasing efficiency and cost control instead of only based-on revenue increases (Cornner and Prahalad, 1996). Karkukly (2010) when quoting Dominguez (2006) pointed out that today's outsourcing "is no longer manpower source only to finish particular tasks, it is more of partnership and alignment between the outsourcing company and their outsourcing provider". Relying on the contracting activities several organizations realize that they are cutting cost as well as maintaining the quality of the services provided (Mullin 1996; Grant 1996). Other scholars like Karkukly (2010), presented her research discussing how does outsourcing of PMO [9] Functions improve Organizational Performance? Noted, "Outsourcing provides a potential path to price reductions and increased flexibility, allowing firms to convert fixed costs into variable expenses, and increase their economies of scope".

Second most researchers provide studies that focused on IT outsourcing in the manufacturing industry. On the other hand, when analyzing determinants of business process outsourcing for banking markets in German Fritsch and Wüllenweber (2007) concluded that BPO [10] is still an element of cutting cost strategies and gives good performance on banks with a high revenue diversification, as a strategic element in market differentiation strategies to gain further competitive advantage. In addition, Warutere (2008) did a thesis research base on ICT discussing bridging the poverty gap through information and communication technologies (ICT).

Third, researchers like Sanchez, (2010) studies the "benefits and Risks of Knowledge Process Outsourcing" and added that, "companies that implemented business process outsourcing (BPO) strategies have experienced great gains in efficiencies and cost savings". Alternatively, mentioned some processes that considered best candidates for BPO like accounts payable, accounts receivable, and payroll.

Geurts, (2009) in her ( ) master research [11] did empirical investigation on whether outsourcing business activities has a significant effect on firm level employment growth and whether this effect is still valid when other variables that might influence employment growth like firm size and sector are controlled. Analysis results of OLS regressions shows clear positive relations between outsourcing and employment growth in the case of support functions and logistics and transport, there was negative relation in the case of outsourcing of R&D, lastly there was no significant relation in the case of core functions.

In the United States outsourcing started in 1980 and has become increasingly popular, particularly in industries such as manufacturing (Colvin, 2005; Grossman & Helpman, 2005; Shao & Smith David, 2007), and has increased in popularity with the sudden increase of globalization (Master, 2005). Likewise, Karkukly, (2010), mentioned that; organizations employed outsourcing as the development strategy, achieved performance improvement across the entire business, for example the externalization of the Information Technology (IT). From the recent report, it shows-that companies are outsourcing 38% of their IT functions to external providers (Mclvor, 2005).

Researchers Kane, Schaefer and Fraser, (2004) argue that, "while free trade can cause localized pain for a few workers, the overall gains [economically] are overwhelming" for corporations to outsource and benefit the economy, "outsourcing represents less than 1% percent of gross job turnover and brings net gains to the economy" (DeMaiolo, D. 2009). Alternatively, other scholars, Bovée and Thill, (197) believe that few pains resulted from jobs displacement shouldn't negate the entire economy's overall growth; and other economists argue that "short-term pains will lead to long-term gains" because "jobs lost this time around will once again be replaced by other jobs (DeMaiolo, D. 2009).

In other study for the U.S Bureau of Labour and Statistics as cited by Hubbard and O'Brien, (234) indicates that in 2003 in the first three months, outsourcing accounted for only 4,633 of 239,361 jobs lost at a large group of firms (DeMaiolo, D. 2009). According to DeMaiolo, D. (2009), because of the job loss "outsourcing-heavy manufacturing industry should blame layoff technology and not outsourcing". Furthermore according to the Bureau of Labours Statistics, the number of outsourced jobs increased from 6.5 million in 1983 to 10 million in 2000 (DeMaiolo, D. 2009). In addition, Hubbard and O'Brien, 12 quoted Paul Samuelson [12] , arguing that, "the impact of outsourcing [results in] ... U.S. workers displaced to jobs that 'may pay lower wages' than those jobs lost to foreign workers" (DeMaiolo, D. 2009).

In appreciating the practices of outsourcing beyond layoffs, it is essential to find out the economic impact on organizations. In considering, "Outsourcing, from the business perspective, allows firms to offer competitive rates and expand efficiency" (DeMaiolo, D. 2009). The proponents as quoted by Bovée and Thill, (197), that "offshoring is crucial to survival of many U.S. companies and such a practice saves jobs (DeMaiolo, D. 2009), prove this. On the other hand, DeMaiolo, D. (2009), cited that "outsourcing has many advantages: it gives companies access to new resources and world-class capabilities; it shares the risk of getting the work done; and it frees company resources for other purposes (253-254)". Moreover, "outsourcing expands innovation because it allows organization to redirect the capital and resources spent on manufacturing e.g. new product research and development, marketing and customer services (196)", (DeMaiolo, D. 2009).

Another argument on outsourcing as cited by DeMaiolo, D. (2009), from Boston University Professor Nitin Joglekar who found that "less than 20% of workers affected by outsourcing loss their jobs; the rest are repositioned within the firm" [13] this indicate that there is increased of efficiency (Drezner, "Outsourcing Bogeyman"). As noted by DeMaiolo, D. (2009), when quoting Bovée and Thill, (197), "in the past, only low-skill jobs were predominantly the main type of work that was outsourced. But, now more valuable activities started to move overseas, then quite a few people began to question [economic] theory and inevitably began many protest against foreign competition stealing decent American jobs" (Bovée and Thill, 197).

Some companies as cited by Crane, such as "IMB from America said to step out with their outsourcing plans to move whole operations in addition to jobs, to other countries" (DeMaiolo, D. 2009). According to Bovee and Thill, (254), "outsourcing has its shares of risk, including loss of control, greater dependence on suppliers and loss of in-house skills" which is the one creating victorious business; also they added that "work delays, unhappy customers and labour union battles as a [direct] result of outsourcing" (DeMaiolo, D. 2009).

In understanding the economic impact of outsourcing as well as consumer 'simultaneously' standard of living can be analyzed (DeMaiolo, D. 2009). Taking an example on the economic perspective as mentioned by Hubbard and O'Brien, (11), "most economists believe that international trade-including the trade that results when firms move production offshore-increases economic efficiency and rises income" that in turn will rise the standard of living as well (DeMaiolo, D. 2009). Furthermore as DeMaiolo, D. (2009) pointed out that most economist support the theory of comparative advantage which states that "the exchange of items or jobs that a country produces most efficiently will increase a country's total output and allow both trading partners to enjoy a higher standard of living" (Bovée and Thill, 65).

Many displaced workers due to outsourcing still employed and repositioned [14] by the firm that outsourced their jobs (DeMaiolo, D. 2009). In addition DeMaiolo, D. (2009), added that "the previous research indicate that outsourcing firm allows business to maximize efficiency, reduce prices, reallocate resources to cultivate innovation, and offer consumers increased standard of living. According to Smith, Russell 11/07/2010 [15] , on the legal process outsourcing off-shore legal outsourcing, especially high-end, legal services KPO (knowledge process outsourcing), creates more legal works in the west, as deals previously undone, and litigations previously settled (or never filed), due to excessive legal costs, are suddenly affordable [16] .

On the other hand as the outcome of outsourcing, China gets the bulk of the manufacturing outsourcing, because the government wants China to get rich and their labor is cheap. India gets bulk of throw services outsourced because their education system is strong and they speak English (Evariste) [17] . On the record by computer-world September 2003, India is one of the most popular nations for outsourcing as shown in the study by McKinsey & Co. Moreover, Nasscom, which is an Indian software association, indicates double-digit growth of revenue from IT services, which expected to reach $57 billion in 2008 [18] .

Another evidence is that a "Global automaker outsourced its global accounts payable process doubling its on-time-payments and generating more than $400,000 in annual savings by avoiding the cost of late payments" (Sanchez, Carlos. 2010).

Even though there is much more benefits brought by outsourcing, but other opponents are valid in arguing, "Outsourcing can deteriorate local cultures, exploit cheap, unsafe labor and create loss of control" (DeMaiolo, D. 2009). For example, since 2001, according to the US Bureau of Vital Statistics, "more than 50,000 people in IT professions in the United State have lost their jobs" (CIO Magazine, August 2003) [19] 

Chapter three

Research Methodology

3.1 Introduction

Having created conceptual framework that ascertains the core phases of the process by which the research question could positively answered and from the analysed literature review on the theme of outsourcing, in this section of the research will review and validate the methods to be used. This chapter also will look at the design of the research, population and sampling of the research information, data collection and analysis, lastly the research ethics. In this chapter will include the philosophy and theory behind research, nature of the questions themselves, the methodology found under literature review and the subsequent method in the research used to collect data and drawing conclusion.

According to Pring (2004), research is the systematic search for evidence to answer a given question. But, the research will be made up of the researcher's point of view and how much he/she understands the research problem. In order to fulfil this, the case study method will be used to examine the issue of economic impact of outsourcing on business at Sabodala Gold Operations.

In this study, researcher will try to find answers for the question; what is the economic impact of outsourcing on business that outsources its business activities? Which is in nature is the case study where by researcher will be looking at his own organization making use of the available access to knowledge of the individual environment. Saunders, Lewis and Underhill, (2007), write that this type of research not only is useful in understanding the intricacies of the organization, it also means that the researcher is familiar with the organization, which will help ask important questions throughout the study.

The goal of this research is to analyze the economic impact of outsourcing on the business that outsources its activities taking the case study of Sabodala Gold Operations. Rather than existing of several literatures on outsourcing, [20] this research will focus on researching the economic impact of outsourcing at SGO with the help of the following questions:

How does outsourcing influence the SGO [21] business activities?

Why business activities outsourced at SGO?

How does outsourcing relate to the ongoing outsourcing models?

How can outsourcing be advantageous or disadvantageous to the business if there is no proper governance?

Finally, how does outsourcing contribute to improve business activities?

As the research, relying on a single organization first to the side of the researcher is convenience, easily access to information less expensive in case of finance as well balancing time for data collecting and continues with the daily accountability. Secondly the qualitative research approach selected for this study is convenient for single organization/institute researching and as explained by Myers, (2002) the greatest strengths for this approach is the richness and depth of explorations and descriptions (Neill, J. 2010).

The research analysis will be, based on the case of outsourced activities and non-outsourced activities at SGO looking at variations economically on the outsourced activities. The motivation for case study strategy in this research is due to the individualism of the area of study. Case study is one of the type of qualitative research that is the best way of studying in-depth a single case (Neill, J. 2010). Other researchers like; Knapp, Gart and Bencher (2005); Pilloff (1996). Jiang, Frazier et al. (2006) evaluate the effects of outsourcing by comparing outsourcing to non-outsourcing firms (Fritsch, Markus and Wüllenweber, Kim), but in this research based on activities within single organization.

Credible identification of the economic impact of outsourcing on business that outsources its activities dealt using Qualitative approach. Selection of the approach is due to the reason that is one of the ways of gaining knowledge through discovering by improving comprehension of the whole. The key word in this research is outsourcing where by the exploring of richness, depth, and complexity of phenomena dealt relating to the economic impact generated and best technique is qualitative research approach [22] 

3.2 Research design

The overall strategy of this research at Sabodala Gold Operations (SGO) is collecting information through interview and observation on outsourced and non-outsourced activities and studying its relationship to the economy of the organization by making use of the inductive approach. Using inductive reasoning is because the data I will be collecting are in qualitative nature with the following features subjectivity, inductively, not generalizable and are in words. I will make use of case study as my research strategies.

I have selected the inductive approach because data collected and then used to develop theory because of data analysis. I am going to base my research around a single organization this is due to the time constraint and my interest is to look if there is an economic impact of outsourcing on business activities at SGO. My intended data to be used in my research will come within SGO focusing on the literature searching, expertise in the subject matter (talking to contract department/section, mining manager or chief of planning, financing and project managers or operation manager) to get the feeling of how outsourcing of business activities impacted on the economy of the organization. Data analysis will be, provided in SPSS or Excel.

3.3 Research population and sampling

The research is a case study and will be within a single organization. In this case few contract companies (main contractors) are the only companies that will be discussed in this research. Sampling of the data will be limited at these firms (BIA, Minrex Drilling contractor, EDS, SGO) at SGO.

3.4 Data collection

A sample survey data will be collected through interview of the key personnel within SGO and in the sample contracted companies. On the other hand the observation of the existing document will be used as the source of data in this research. These will include the actual contract as will be available, the cost of running the business before and after the outsourcing or insourcing.

3.5 Data analysis

Since excel is probably the mostly available software, this will be used as part of the data analysis in this research. Excel contains various calculations, including a collection of statistical functions, and a Data Analysis ToolPak. Additionally, SPSS package may also be used to smooth the data analysis. The analysis of the data will involve inspecting, cleaning, transforming, and modelling of the data in order to get useful information that will suggest conclusions of the findings. Within-case and cross-case analysis of data selected as analysis techniques.

3.6 Ethical considerations

The primary data for the research will be collected directly from the organization where by the permission to conduct research had been granted by the Mining and Development manager. Apart from this the details of interview, surveys/literature review, observation, and analysis of the information will be included.

Honest is one of the ethical to be considered in this research in all communications. Research report data, results, methods and procedures and the final publication of the final report is honestly carried out. Where research objectivity is expected especially in aspects of data analysis and bias interpretation will be minimized. The research is expected to be a mentoring tool for others who are interested in business outsourcing. Laws and the SGO policies will be adhered during research data collection and report writing. One copy of the report will be submitted to management for record and future use.