The study examines the impact of outsourcing practices and governance models on cost and quality control in the steel manufacturing sector, with specific reference to Bhilai Steel Plant in Chhattisgarh, India. The study investigates how strategically aligned outsourcing and structured governance mechanisms influence operational efficiency and product quality in manufacturing and maintenance functions. A structured questionnaire was developed and validated through expert reviews and statistical reliability measures, then distributed to 430 executive-level employees. Using Structural Equation Modeling (SEM) via Smart PLS-4, the research analyzes the relationships between four key latent constructs: outsourcing practices, governance models, cost control, and quality control. The findings reveal that outsourcing practices significantly enhance both cost efficiency and quality outcomes when aligned with organizational strategies, while governance models—characterized by contractual clarity, performance monitoring, and trust-based coordination—exert a strong positive influence on both cost control and quality assurance in outsourced functions. The research contributes to existing literature by providing empirical evidence of these relationships in a large-scale, capital-intensive industry. The implications suggest that organizations can achieve better operational outcomes by adopting a dual focus on strategic outsourcing and robust governance frameworks. These insights are particularly relevant for policymakers, plant managers, and operations strategists in the manufacturing domain.