Outsourcing and Operational Performance in Diversey Eastern and Central Africa Ltd

Abstract

Internationally, organizations are experiencing increased competition as the consumers are becoming more demanding. This is pushing organizations to seek ways in which they can become more efficient as they utilize the limited resources available. One of the ways firms are adopting to the changing requirements in the market is by outsourcing. Many benefits are being gained by organizations that are choosing to outsource, examples of such benefits are access to improved technologies and lower costs of operations. On the other hand outsourcing is also leading to major challenges in organizations some of these are loss of control of the activities being outsourced and too much over dependence on suppliers. The research project aimed to establish how the decision to outsource influenced the operational performance of Diversey Eastern and central Africa limited. This is a company in Kenya that specialises in the manufacture and sale of detergents for commercial purposes. The research aimed to determine the extent of outsourcing, the drivers of outsourcing and how outsourcing has influenced the operational performance. The study showed that the organization had outsourced to a large extent, the decision to outsource was driven by a desire to reduce costs. In as much as outsourcing has led to reduced costs, some performance indicators such as flexibility, innovations, quality and customer satisfaction had been affected negatively. The study concludes that outsourcing is beneficial to organizations, however it is important for organizations to weigh the benefits that come out of the outsourcing decision. If there are any negative effects on the performance corrective actions need to be taken to ensure the process is managed well and any performance failure is corrected early.