| dc.description.abstract | The formulation of outsourcing process has been one of the most debated management trends
in the last twenty years. There has been a lack of established consensus on the actual end
effect of outsourcing. This is especially locally, whereby in Kenya it remains common
knowledge that BPO is widely practiced in both public and private institutions. There is
scanty information pointing to the manner in which outsourcing is approached, including its
contribution to these situtions. It is these gaps in knowledge that drove to establishing the
relationship between BPO and firm performance. Further, focusing on the Kenyan State
corporations was driven by the role BPO is envisaged to play in the economic development of
Kenya. This has been identified in the Vision 2030 as one of the six key sectors in the
economic pillar. In doing this, the study brought in other factors; namely strategy and firm
characteristics envisaged to have influence on the manner in which the corporations handle
BPO. Hence are crucial determinants of the success or failure of the BPO initiative. The study
further drew hypotheses to test the nature of the relationship between BPO and firm
performance, as well as how this relationship is affected by each of these influential factors.
Finally the hypotheses tested the combined effect of BPO, strategy and firm characteristics on
the performance of the Kenyan State firms. This research was a census study focusing on all
the 144 State corporations in existence by December 2012. The study managed to get
participants from 112 State corporations drawn from all the six functional classes as per the
existing categorization. Both primary and secondary data were used for analysis in the study.
The primary data was obtained from the information in the questionnaires distributed to the
State corporations whereas the secondary data was retrieved from existing reports from the
office of the Auditor General and the Performance Contracting department. The collected
data was prepared and analyzed using SPSS. The study employed a combination of both
descriptive and inferential statistics, to establish the degree of association among the variables
while simple and multiple regression analysis, to establish the cause, effect, degree and
direction of the relationship between the variables. The findings of this study confirmed that
all the Kenyan State corporations were involved in outsourcing, and that BPO had a positive
contribution to the firms' overall performance. However, BPO ·.vas found to have
insignificant contribution to the corporations' profitability. Of all the factors making up
strategy and firm characteristics and envisaged to be of influence to the relationship between
BPO and firm performance, the type of strategy adopted, and the management competence
were found to have the biggest impact on BPO performance and consequently performance
improvement. Thus, the study provides empirical evidence to support that, BPO's benefits as
pertains to its contribution to enhancing performance will be realized by the corporations who
will adopt the right type of strategies. Strategies that are adoptive to changing market trends
and those who will invest in skilled human capital to adequately manage BPO and other
processes. Organization structure, the Board of Directors and the age and size of the
corporations were found to be of little or no impact on the success of BPO. The study's
limitations were the population of the study, and the use of only two factors to test the
influence of the relationship between BPO and firm performance. The research thus
recommends future studies to widen data coverage. This can be done by involving
mainstream government departments, and BPO service providers. Future studies may also
consider testing the influence of other factors, especially external factors, which may
influence this relationship. | en_US |
