STRATEGIC OUTSOURCING AND THE COST-INNOVATION PARADOX: BALANCING EFFICIENCY, INNOVATION, AND RISK IN A TECHNOLOGY-DRIVEN ECONOMY

Authors

Abstract

Outsourcing has become an essential strategy for businesses seeking cost efficiency while maintaining innovation. However, the challenge of balancing cost reduction with service quality and technological advancement remains a pressing concern. This study explores the complexities of outsourcing decisions by employing a systematic literature review to synthesize insights from reputable scholarly sources. The research introduces the Cost-Innovation Balance Model (CIBM), which provides a structured framework for understanding the interplay between cost efficiency, supplier collaboration, digital transformation, and risk mitigation. Findings highlight that while outsourcing enhances operational efficiency, it requires careful management to prevent negative impacts on service quality, intellectual property security, and long-term sustainability. AI-driven analytics, automation, and incentive-based contracts emerge as crucial tools for optimizing outsourcing partnerships. The study underscores the importance of aligning outsourcing strategies with broader organizational goals to achieve sustainable competitive advantage. Policy and managerial implications suggest that firms should integrate technology-driven decision-making and regulatory compliance measures to enhance outsourcing effectiveness. This research contributes to the ongoing discourse on outsourcing by offering a conceptual model that can guide businesses in navigating the trade-offs between cost efficiency and innovation sustainability

Dimensions

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Published

2026-10-21

How to Cite

Chukwu, A. U., & Oko-Isu, A. (2026). STRATEGIC OUTSOURCING AND THE COST-INNOVATION PARADOX: BALANCING EFFICIENCY, INNOVATION, AND RISK IN A TECHNOLOGY-DRIVEN ECONOMY. FUDMA Journal of Business Management, 4(2), 191-205. https://doi.org/10.70882/fjbm.2026.v4i2.131

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Vol. 4 No. 2 (2026): FUDMA Journal of Business Management

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Articles
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Copyright (c) 2026 Agnes Ugboego Chukwu, Anthony Oko-Isu (Author)

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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

How to Cite

Chukwu, A. U., & Oko-Isu, A. (2026). STRATEGIC OUTSOURCING AND THE COST-INNOVATION PARADOX: BALANCING EFFICIENCY, INNOVATION, AND RISK IN A TECHNOLOGY-DRIVEN ECONOMY. FUDMA Journal of Business Management, 4(2), 191-205. https://doi.org/10.70882/fjbm.2026.v4i2.131

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