Analyzing the Effect of Outsourcing by SMEs on Company’s Performance Moderating Role of Risks Associated with Decision of Outsourcing: Evidence from SMEs operating in Karachi

Outsourcing is a strategy which is even treated as a risk free for the conduction of business but the decision might not always ensure desired quality and results. Thus there is significant need of evaluation of outcomes associated with outsourcing decision, especially in Under Developed Countries (UDC) and Least Developed Countries (LDC) where there is significant lacking of research work on this strategy. Thus the aim of this research is to check the results associated with outsourcing in terms of its importance, especially for the most important sector of Pakistan’s economy (SMEs). Thus data has been collected from all those who are working on managerial positions in SMEs operating in Karachi and after detailed statistical testing through AMOS it has been revealed that outsourcing is fruitful for SMEs but results might be different for different types of SMEs as well as if we analyze small enterprises and medium enterprises on separate basis.. Keywords: Outsourcing, SMEs, Cost, Quality, Firms Performanc