J. Basic. Appl. Sci. Res., 3(3)1017-1024, 2013 © 2013, TextRoad Publication ISSN 2090-4304 Journal of Basic and Applied Scientific Research www.textroad.com Corresponding Author: Shahnaz Nayebzadeh, Assistant Professor of Marketing, Department of Management,Yazd Branch, Islamic Azad University,Yazd, Iran. Email:snayebzadeh@gmail.com The Role of Accounting Department in Outsourcing Decision-Making (Case Study: Yazd Textile Industry) Shahnaz Nayebzadeh 1 , Ali Morovati Sharifabadi 2 , Maryam Golshan 3 1 Assistant Professor of Marketing, Department of Management, Yazd Branch, Islamic Azad University, Yazd, Iran 2 Department of Economy, Management and Accounting, Industrial management Group, Yazd University, Yazd, Iran 3 Department of Accounting, Yazd Branch, Islamic Azad University, Yazd, Iran ABSTRACT The present study seeks to examine the role of accounting as an organizational department in outsourcing decision-making. This role has been analyzed in the firms operating in textile industry. The research models is composed of independent variables including intensity of competition, firm size, firm performance, cost-leadership strategy and differentiation strategy; while the dependent variable is the degree of the accounting department involvement in outsourcing decision-making. This is an applied correlation study and the required data are collected from the questionnaires distributed. The statistical population of this study includes those firms working in the textile industry of Yazd province and the sample is composed of 175 companies selected by stratified sampling. Pearson and Spearman correlation coefficients were used to analyze the data. The findings reveal that there is a positive significant relationship between intensity of competition and size with the degree of accounting department involvement in outsourcing decision-making. However, there is no significant relationship between performance, cost-leadership strategy and differentiation strategy with the degree of accounting department involvement in outsourcing decision-making. This study opens up new suggestions about the higher efficiency of the firm. Additionally, this is a valuable research because it provides useful information on outsourcing for the researchers and managers. KEYWORDS: Outsourcing, Intensity of Competition, Size, Strategy, Firm Performance, Degree of Accounting Department Involvement in Outsourcing Decision-making. 1. INTRODUCTION The rapid changes in the business environments caused managers feel they need to accept those methods and approaches ensuring the successful operations of the firm in the current and future periods [6]. Outsourcing is one of these processes that are actually a potential path toward reducing prices and increasing flexibility and allows firms to convert fixed costs into variable ones and enhance saving the costs [10]. However, outsourcing dates back to the 18 th century in England [23]. Globalization is the factor caused firms pay more attention to the outsourcing in the private and public sectors [2 and 29]. For example, in Edinburg area of Scotland, more than 70 percent of the firms outsourced at least one of their operations for the purpose of improving the quality and decreasing the costs [4]. Moreover, outsourcing has been applied in big companies such as Alcatel Italia, Houghton Mifflin, Octel Communications, Mead, Plastics MFG, Sybase, Microsoft, Talegen Holding, and Tektronix and Zeneca Group [30]. British Petroleum, as a big oil company utilized outsourcing to mitigate the costs and improve the product quality. Application of this process could decline the training expenses of the company as to 40 percent. The operating costs of the companies also decreased 15 million dollars and the outsourcing process has been very successful [5]. The findings about the research conducted in health care departments of USA demonstrated that information systems of that country are outsourced in order to improve quality, save the costs, the intensity of the competition and availability of the proper suppliers [31]. Successfulness of the Textile industry is also pertinent to cost reduction. Accordingly, those firms operating in this industry outsourced their secondary operations; even in 1980 in Germany, the internal production traditional methods were omitted from the clothing industry and outsourcing and flexible manufacturing systems were more widely agreed upon. This holds true for the clothing industry in Italy because of the globalization [47]. However, the role of management accountants might not be overlooked in this process. Generally, management accountants as the controllers play a key role in those contracts negotiated by the organization. Additionally, these accountants could potentially contribute to the relationship between the buyer and supplier in outsourcing decisions [46]. According to the points mentioned above, the main goal of this research is to find the role played by the accounting department in outsourcing decision-making. Outsourcing Outsourcing is one of the most considerable topics in the economic and management [35] and has become one of major strategies of companies [15]. It leads companies focus on profitable operations and finally everything will be as its best [6]. There are numerous definitions provided for the outsourcing. One of these definitions includes the transfer of some internal activities and devoting the decision making right to the external suppliers [26]. In another study, outsourcing is the preparation of all parts or only some parts of the productions and services from the outside resources [30]. 1017