Strategic Outsourcing: the Experiences of Companies Listed in the Nairobi Stock Exchange
Abstract
Today's global market place is becoming fiercely competitive than ever before. As Thomas
Edison could say, "If there is a better way, find it." And so the possibilities in a supply-chain
world are astounding, but the challenges that lie along the path to supply chain excellence are
equally formidable (Fawcett, 2001). A resultant effect is that firms are increasingly
performing certain functions or processes in the supply chain and outsourcing the rest of
non-core processes so as to create competitive advantage within this volatile environment.
The objective of this project was to determine the experiences of Kenyan companies listed at
the Nairobi Stock Exchange with respect to strategic outsourcing, especially in management
of the process, expected benefits, risks and the future of this strategic tool. In a sample
survey carried out by use of questionnaires sent out to top corporate executives, respondents
were asked a set of questions, responses of which were analyzed to reach a set of
conclusions.
The results show that outsourcing is driven by top management and is seen as a strategic
tool that would enable the firms to compete in the future. It also shows that information
technology, human resource and some production processes are the areas for increased
future outsourcing. The risks foremost in executives' mind include honesty of the
outsourced suppliers and that outsourcing may make the firm unable to learn to perform the
activity being outsourced. Overall though fairness, team approach and trust are key to a
successful strategic outsourcing relationship.
Citation
Masters of business administrationPublisher
University of Nairobi Faculty of Commerce, University of Nairobi.