| dc.description.abstract | Agricultural organizations are constantly in search of new solutions and strategies to
develop and improve their operational performance. Outsourcing is one of these
strategies that can lead to enhanced operational performance. Although a number of
studies have been done on outsourcing, none has focused on the Kenyan sugar industry.
For this reason, the present study sought to fill the gap by establishing the relationship
between outsourcing various activities and the operational performance of Chemelil sugar
company limited, Kenya. This was a longitudinal case study research design. Primary
data was collected through an interview of departmental heads at Chemelil sugar
company, Kenya. The interview guide that was used was constructed in order to establish
the extent of outsourcing as well as services outsourced by each of six departments of
Chemelil Sugar Company. The secondary data was collected in order to help in the
operational performance aspect of the study. As such, data was collected from the sun
systems database of Chemelil Sugar Company. ANOVA analysis was carried out on the
collected data. The study found out the most important reasons for outsourcing was
concentration on core activities, reduction of cost of operation in terms of labor and
overtime payments, efficiency and quality improvements, timely service delivery and
improved overall performance. From Pearson correlation coefficient, there was a low
correlation between outsourcing and operational performance. The R2 revealed that
outsourcing influenced only up to 37.1% of the variance in operational performance. The
study revealed that five of the six departments of Chemelil sugar outsource some of their
core functions and process is overseen by the departmental heads. The mean and standard
of the costs before and after outsourcing were significantly different; costs after
outsourcing were higher. F calculated was smaller than F critical at a 5% level of
significance; 2.659< 4.26 leading to the rejection of the null hypothesis hence the
conclusion that there was variance in the relationship between outsourcing and
operational performance in Chemelil sugar company. In conclusion, the management
intentions and expectations of reducing the cost of operation and improving the
operational performance has largely not been achieved since mean costs have risen
throughout the study period (2002-2013). Its therefore advisable that before any company
gets involved in outsourcing, a comprehensive cost and benefit analysis should be
conducted and a decision on the reasons for doing so known in advance. | en_US |
