An investigation into implementation of outsourcing strategy by selected manufacturing firms in the chemical and allied sector in Kenya

Abstract

Outsourcing has expanded considerably over the years. It involves the act of transferring some of an organization’s recurring internal activities and decision rights to outside providers, as set forth in a contract. Whilst its merits continue to be debated by academicians and practitioners alike, and seen by many as a convenient way of minimizing costs and enhancing efficiency in the production process, the implementation process clearly remains unique to any given organization. This study attempted to investigate the implementation process of outsourcing as carried out by different firms in the chemical and allied sector in Kenya. The study employed a survey research design to investigate the research problem. The sample frame was composed of operational mangers, accountants, production controllers, procurement officers, supplies and supply chain staff. The study posed a series of questions in relation to implementation of outsourcing strategy to respondents who informed the final results. While outsourcing as a business strategy is highly practiced in most companies, there are attendant challenges and the need to identify and promote best practice as highlighted by the various respondents. Most companies outsource so as to increase productivity and hence profitability by freeing up management time and minimizing costs. Fluctuation in pricing, quality uncertainty and affordability of outsourcing are major challenges to firms in implementation of outsourcing strategy