L24 - Contracting Out; Joint Ventures; Technology LicensingReturn

This study examines the financial implications of business process outsourcing (BPO) in the context of Saudi Arabia’s Vision 2030 economic diversification agenda, using Miza International Co. as a case study. Drawing on Transaction Cost Economics and the Knowledge-Based View, the research analyzes how BPO selection quality and cost-management practices influence firm-level financial performance. Data were collected from 384 stakeholders and analyzed using multiple linear regression. The results indicate that both effective BPO selection (β = 0.234, p < 0.001) and cost management (β = 0.168, p < 0.001) significantly enhance financial performance, jointly explaining 47.5% of the variance. Strategic alignment emerged as the strongest predictor, suggesting that BPO functions primarily as a strategic value-creation mechanism rather than solely a cost-reduction tool in this emerging market context. The findings provide practical and policy-relevant insights for firms leveraging outsourcing to support national diversification objectives.