Outsourcing and the Performance of State Corporations in Kenya
Abstract
This study sought to establish the effect of outsourcing and the performance of state
corporations in Kenya. It was guided by the statement of the problem which revealed
that outsourcing has been understood by most managers however there is a disconnect
between outsourcing and performance due to the nature of its complexity. This study
was also guided by 3 objectives namely: To establish the extent of outsourcing, to
establish the performance levels and to determine the relationship between
outsourcing and performance of state corporations in Kenya.
To satisfy the objectives, descriptive research design was adopted. The study
population was the 94 state corporations in Nairobi County. The sample was
purposively selected using stratified sampling. A sample size of 30% of the state
corporations was used in the study. Primary data was collected from the Head of
procurement or supply chain department of each of the state corporations using
structured questionnaire. Data analysis was done using Statistical Package for Social
Sciences (SPSS) with the main analysis tools being frequencies, mean and standard
deviation and multivariate linear regression.
The research study results indicated that outsourcing of all the practices was generally
low in exception of real estate and physical plants which were outsourced at an
average level. Real estate and physical plants was greatly outsourced, followed by
finance, logistics and transport, IT, HR, customer support and sales and marketing
whereas the least outsourced practice among the state corporations. Outsourcing had
also led to an overall performance of above the average among the state corporations
in Kenya. Good image impacted greatly on performance, followed by quality of
products, innovative practices, customer satisfaction, efficient operations, and staff
turnover. It was also established that the relationship between outsourcing and
performance differed among the firms.
It is recommended that the top management should be in the forefront in support of
outsourcing since this would spur the performance of the firms by enabling them to
concentrate on their basic competency. The study also recommends that firms
seeking to enhance business performance must complete a strategic analysis that will
enable them to outsource the functions that other firms or individuals can do for them
better at a cheaper cost.
Publisher
University of Nairobi