Int. J. Managerial and Financial Accounting, Vol. 2, No. 3, 2010 275 Copyright © 2010 Inderscience Enterprises Ltd. Improving efficiency and accountability: a case study on outsourcing strategies in higher education in Sri Lanka Siriyama Kanthi Herath* School of Business Administration, Clark Atlanta University, James P. Brawley Drive at Fair Street, Atlanta, Georgia 30314, USA E-mail: sherath@cau.edu E-mail: dinushka_h@yahoo.com *Corresponding author Danture Wickramasinghe The Manchester Business School, The University of Manchester, Booth Street West, Manchester, M15 6PB, UK E-mail: DWickramasinghe@dom01.mbs.ac.uk M.W. Indrani Dean’s Office, Faculty of Management and Finance, University of Ruhuna, Wellamadama, Matara, 81000, Sri Lanka E-mail: induwithana@mgt.ruh.ac.lk Abstract: Less developed countries (LDCs) have given increasing emphasis to reduce the role of the government and to reform public sector management by adopting business-like management practices. Public sector reforms in Sri Lanka have been an interesting strategic initiative in the attempt to achieve enhanced efficiency, effectiveness and accountability. Privatisation is one major form of such reforms. This research reports the findings of a case study on outsourcing at a university. Motivations for outsourcing include cost reductions and budgetary constraints, expected improvement in service quality, lack of skilled staff and government regulations. Some limitations of outsourcing are lack of mutual understanding between the user and contractor, lack of awareness of users on the level of service, monopoly of the service, increased costs and reduced employee motivation. The research concludes that through careful management and partnership with outsourcing companies, universities can achieve improved levels of service and cost savings from outsourcing. Keywords: outsourcing; higher education; Sri Lanka; public sector reforms; efficiency; accountability. Reference to this paper should be made as follows: Herath, S.K., Wickramasinghe, D. and Indrani, M.W. (2010) ‘Improving efficiency and accountability: a case study on outsourcing strategies in higher education in Sri Lanka’, Int. J. Managerial and Financial Accounting, Vol. 2, No. 3, pp.275–304.