Business process offshoring in Kenya: effects of national culture on organizational capabilities

Abstract

As companies strive to become globally competitive, part of the strategy they adopt is to offshore-outsource. affshoring has therefore become a business imperative leading companies to look beyond the cost advantage. This new paradigm provides opportunities for emerging markets to become offshoring destinations. Developing nations like Kenya have a chance to participate in global sourcing. This study seeks to explain how national culture influences the competitiveness of offshoring firms in the context of Kenya. A mixed-method research design underpinned by critical realism assumptions was used. A case study and a survey were conducted. The analysis was grounded on empirical results of the study, and employed theoretical thematic analysis. Under the alienating factor conditions revolving around education, ICT infrastructure, capital, stifling regulations, inadequate role of government, lack of local demand and inadequate intercultural competence, the trajectory of BPa development in Kenya shows promise but requires change of tact. A myriad of challenges need to be overcome. In Kenya the government's focus on BPa and the ICT sector generally points to the potential of IT offshoring in the country. Indeed, the potential for Kenya exists but as the study finds out, enhancing the potential calls for efforts and strategies for overcoming the challenges. From the analysis, and in line with Critical Realist approaches, this study recommends a framework that can be employed to enhance the competitiveness of BPa firms within their countries. Dubbed the RCS (Renewal, Credibility & Sensitivity) framework, the critical dimensions revolve around the need for BPa firms enhance their capabilities through organizational renewal; countries to enhance their competitiveness through development of their national credibility; while global stakeholders should recognize that there is a need for development of intercultural sensitivity, not only from vendor perspectives, but also from client organizations. The framework recognizes that the key drivers that underlie the development of offshoring success include the need to build organizational capability, positive convergence of country factor conditions for enhancing competitiveness and enhancing intercultural competence. Keywords: Offshoring, BPO, Business Process Outsourcing, Kenya, Organizational Capability, National Culture.