Outsourcing in Icelandic SME's companies : trends, criteria & reason

Abstract

This research paper focuses on outsourcing trends and their supplier base selection, and outsourcing reasons, of small and medium sized Icelandic companies (SMEs). Theoreticalfoundation is first laid out by an overview of the relevant literature that is based on secondary research data. Then the researcher performed a primary quantitative research. Valid data from SMEs was collected by two surveys through a one-step web-based questionnaire survey. The research study revealed that the practice of outsourcing of Icelandic SMEs is widely knownand used, and the suppliers’ intangible assets are highly determinative for Icelandic SMEs choice of supplier base. Recommendations for production and service companies, to enablean increased possibility for increased value creation, are to look beyond the interpersonal variables, and lean more against long-term relationship benefits. On the other hand,recommendations to suppliers to stay ahead of competition, and thereby be the best alternative for customers, will be to keep their personnel fully informed and trained about theproducts/services they are about to sell.