Top Management Commitment to Manage Transaction Cost Uncertainty for Logistic Outsourcing Success

Abstract

Area of logistic that consists of drivers (facility, inventory and transportation) which play vital role in supply chain network and in the success and failure of the organization. Unfortunately, most of the organizations did not pay attention to it. The present study is designed to explore the impact of transaction cost uncertainties comprised of demand volatility, supply volatility, and technological uncertainty on logistics outsourcing success in the manufacturing industries of Pakistan. The transaction uncertainty and logistics outsourcing performance are studied under the moderation role of top management commitment. The sample size for this study was 300 and responses were collected from the line manager, middle manager and top management of the manufacturing industry of Rawalpindi, Islamabad, and Hattar. Non-probability convenience sampling technique was selected. The data was analyzed using SPSS. Linear and moderated regression techniques were used to analyze the sample. The result showed that transaction cost uncertainties i.e. demand volatility, supply volatility and technological uncertainty positively impact logistics outsourcing success. The use of top management commitment moderates the relationship between transaction cost uncertainties and logistic outsourcing success.