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International Journal of Engineering & Technology, 7 (4.28) (2018) 40-46 International Journal of Engineering & Technology Website: www.sciencepubco.com/index.php/IJET Research paper Exploring Underpinning of Outsourcing Success: A case of Mul- tinational Automotive group in Malaysia Kashif Latif 1 , Mohd Nazari Ismail 2 , Mohammad Nazri 3* , Mohd Roslan Mohd Nor 4 , Muhammad Imran Qureshi 5 1 Department of Business Strategy and Policy, University of Malaya, Kuala Lumpur Malaysia 2 Professor, Department of Business Strategy and Policy, University of Malaya, Kuala Lumpur Malaysia, 3 Senior Lecturer, Department of Business Strategy and Policy, University of Malaya, Kuala Lumpur Malaysia 4 Associate Professor, Department of Islamic History and Civilization, University of Malaya, Kuala Lumpur Malaysia 5 Senior Lecturer, Malaysian Institute of Industrial Technology, University of Kuala Lumpur, Malaysia *Corresponding author E-mail: nazrry@um.edu.my Abstract This study explored underpinning of outsourcing success by analyzing different theories of outsourcing. This study is unique in its nature as it used interpretive paradigm to explore, analyze outsourcing success theatrically by comparing different phases of outsourcing, then the case of Boeing analyzed in the context of outsourcing and after that come up with real time case study of one big automotive group operating in Malaysia through using semi structured interview by developing and comparing themes of this study. This study figured out that cost reduction and efficiency can be attained by creating economies of scale, using and managing vendors appropriately with the combination of efficient strategic alliance. Keywords: Exploratory Underpinning, Outsourcing Success, Interpretive Paradigm, Cost Reduction, Efficiency, Economies of Scale. 1. Introduction There are several different definitions of outsourcing. In all cases, outsourcing requires third party Involvement (1). It had been depicted that “Outsourcing signifies the delivery of products or services by an external provider – that is, one outside the boundaries of the firm” (2). Whether to out- source or not is a strategic decision, that is, to buy in products or services or produce inside the company (3). Every organization outsources. They diverge only in the span and extent of what they procure as goods and services from outside entities. Outsourcing can decipher many problems, but is also laden with hidden costs and risks, the choice of whether to outsource, in a supply chain or any other setting, is thus not about a yes or a no, but an affair of scope and extent (4). KPMG survey revealed that the processes for which the most percentage of respondents would be mounting their outsourcing were “application development and mainte- nance” (48%) and “finance and accounting” (40%) (5). There are three key reasons why organizations in Europe out- source which are cost reduction, efficiency improvement and reduction in headcount. This has been the ten- dency over the past years. Organizations lay considerations on the cost-related factors when they want to improve on their financial eminence as well as cost efficiency. Numerous researches have previously identified cost savings and strong financial base as leading drivers of outsourcing (6-12). Certainly, in the era of hy- per-competition, where the basis of competition changes persis- tently, outsourcing has emerged as a strategic stipulation which can be gauged by the increasing size of the outsourcing industry. The outsourcing phenomenon has been ever more getting concen- tration both from academic and practitioner communities. The result of the research has escort towards the emergence of numerous process frameworks illustrat- ing the phases of the outsourcing process. It is generally accepted that the outsourcing process consists of the preparation, vendor(s) selection, transition, management of relationship, and reconsidera- tion phases. Each of the phases has been wrecked down in the series of activities that an outsourcing company performs. At the same time, the phases were subject to a stream of theoretical ex- planations. The studying of the outsourcing phenomenon has been stranded in many theories. Some of them are harmonizing, the other are incongruous (13). Outsourcing is the process of institute and managing a contractual relationship with peripheral ven- dor/supplier for the stipulation of capacity that has previously been provided in-house (14). The outsourcing process is a multi- faceted structure consisting of several activities and sub activities, carrying many managerial dilemmas. It is no conjecture that many theories have been utilized to help the academics to comprehend the nature of those activities, and to help practitioners successfully manage the process. It is a common acquaintance that each phe- nomenon can be explained by several frameworks that are en- trenched in various theoretical approaches. From its happening, the outsourcing has been approached by different theories. This creates confusion among the researchers of the outsourcing phe- nomenon. Several authors acknowledged considerable number of theories that could explain the outsourcing phenomenon (15, 16). The significant shortcoming of contemporary research is, since outsourcing of components, even mission-critical ones, has be- come a key strategic initiative for numerous companies, and has been described as a necessity for many firms in today's environ- ment (17). In this stratum, it had been depicted that outsourcing governance structures are “still immature (or) lacking altogether”,