Influence of Shared Service Centers in the Performance of Multinationals in Kenya

Abstract

A high number of Multinational corporations (MNCs) have followed their peers in starting up shared service centers (SSC). With most multinationals adopting this trend, it is without doubt that shared service center acts a key driver for multinational corporations in achieving their organization goals and derives certain benefits. The objective of this study was to determine the Influence of shared service centers on the performance of multinationals in Kenya. The research design applied was descriptive survey. The study covered four MNCs including Diageo, Nestle, Toyota and Standard Chattered whereby, the top and middle level managers in these firms were covered. Primary and secondary data was used. Primary data collection was done through the use of questionnaires. The data was analyzed through descriptive statistics such as mean, percentages, and frequencies. Analysis of qualitative data comprised of document analysis and text that included text data reviewing and categorizing the data in line with the study objective. The SSC implementation was rated at a mean of 3.9 with a standard deviation of 1.3. Most of the managers (56.9%) expressed that the growth of SSC in Kenya is fast while 33.3% considered it as average. A vast majority (92.2%) of the managers unanimously affirmed that efficiency was the major driver of setting up SSC in the MNCs. It was followed by cost savings which was attested by 86.3% of them. On the factors affecting their growth, 76.5% of the managers believed that internal factors affect the growth of SSC in the MNCs. Majority (96.1%) of the managers attested that SSC had a positive effect on MNCs. The study concluded that the benefits that accrue to MNCs from SSC far outweigh the costs of their establishment and operation, hence, SSC greatly enhance efficiency and cost savings in MNCs. In this regard therefore, the study infers that SSC have a great positive effect on the performance of multinational corporations. The study recommends among other measures, that for MNCs to improve their performance through the SSC model, the management should ensure that they adequately engage the staffs while establishing the SSC from the planning to the implementation stage. They should also adequately envision the possible challenges and plan in advance how to address these challenges should appear.