Outsourcing and Performance of Commercial Banks in Kenya

Abstract

The study adopted a descriptive design and was based on the following objectives: to determine the extent to which outsourcing practices have been implemented among commercial banks in Kenya, to establish the relationship between outsourcing practices on the organizational performance of commercial banks in Kenya and to determine the challenges faced by commercial banks in implementing outsourcing activities. A census approach was adopted and the census consisted of all 43 commercial banks in Kenya as listed in Appendix 2. The findings were presented in frequency tables for easy understanding. The researcher used primary data collected through administering 43 questionnaires to various respondents including staff at the commercial banks in Kenya. However researcher only managed to obtain 30 completed questionnaires representing 70% response rate. The collected questionnaires were edited and cleaned for completeness and consistency. After the questionnaires were coded, they were keyed into the Statistical Package for Social Sciences (SPSS) for analysis. Descriptive statistics such measures of central tendency and measures of dispersion were used to analyze the data. These were mean, standard deviation and frequency distribution. A 5 -point likert scale was used to analyze output of each response received from respondents and therefore from the study findings it can be concluded that outsourcing practices affected organizational performance of commercial banks to a moderate extent. The research also concludes that commercial banks in Kenya have adopted outsourcing activities to a large extent faced challenges to a little extent. The research also concluded that high cost of implementation and lack of management support and training in implementation of outsourcing practices were the most faced challenges. The study recommended commercial banks to hire competent staff that can be entrusted in implementation, management and measurement of the outsourcing practices. These employees should also be trained and motivated so as to reduce the margin of error and chances of mismanagement or sabotaging of outsourcing practices implementations