Modelling the impact of outsourcing decisions on facilities management service-level performance: a case of Nigeria’s public hospitals

Abstract

The evolving trends within the facilities management (FM) domain over the past decades mean that it is becoming increasingly complex while the interrelationship between FM services provision and the decision to outsource has added more pressure to the issue of strategic decision management in FM. Using data from Nigeria’s public hospitals, a developed conceptual model is tested in an attempt to understand the underlying attributes of outsourcing decisions and their links to FM services performance. The hypothesized model employs structural equation modelling (SEM) methodology to examine the relationships between five latent constructs of the outsourcing decision and their relative impact on FM services performance. Findings reveal that quality consideration is one of the most significant drivers impacting on service performance of FM services in hospitals. What is surprising, however, is the rejection of the proposition that strategy-related factors impact on service-level performance while social factors do not have a significant impact on service-level performance. It is hoped that these findings will contribute to the current methodological literature on the use of SEM for analysing complex interactions within the FM industry domain while they will avail practitioners of the key components of the outsourcing decision that are having the most significant impact on service performance.

Keywords:

• Facilities management
• Nigeria
• outsourcing
• structural equation modelling.

Acknowledgements

We would like to thank the International Conference on Construction and Real Estate Management (ICCREM) secretariat and the American Society of Civil Engineers (ASCE) for granting us permission to reproduce part of the work-in-progress paper (Ikediashi et al., 2013a) presented at the 2013 ICCREM in Karlsruhe, Germany in this article. Special appreciation also goes to Nigeria’s Tertiary Education Trust Fund for providing assistance that facilitated this research.