Organizational Innovation as a Driving Force of Corporate Prosperity

The purpose of this paper was to examine the effects of organization innovation on company performance characteristic. In addition, the main benefits of service outsourcing as well as key obstacles to smooth adoption of service outsourcing were also identified. The reason for drafting this paper was to elucidate on main benefits and shortcomings of service outsourcing and to propose normative decision model which would facilitate decision-making process. Design/methodology/approach: The research was specifically based on questionnaire survey which was performed among company maintenance managers and shift masters in the Czech and Slovak Republic.Research sample was subject to random selection. Questionnaires were filled in and collected during regular professional trainings. In total 89 companies were subjected to survey. The survey took place within 2016-2017. This survey was complemented by contextual interviews with selected maintenance managers. Findings: The paper proved that service outsourcing maybe economically beneficial in cases if it brings higher shareholders value than service insourcing. This criterion can be expressed by Net Present Value (NPV) which is smoothly measurable by means of cardinal scale. Furthermore, non-financial criteria were added to measure entire utility of decision on outsourcing. Normative decision-making model which was then proposed was validated on the patter of mid-sized pharmaceutical company. Research/practical implications:The main outcome of the paper is a normative model of decision-making on outsourcing. This model combines both financial and non-financial criteria. The model was practically verified on the pattern of mid-sized company. The model also helps managers better understand the value engineering nature of outsourcing and offers clear and understandable normative decision-making model. Originality/value:The paper offers normative decision-making model which is based on several financial and non-financial criteria. This model was also tested in company practice. Literature search confirmed that such a model had not been presented before.