Outsourcing Risks in the Telecomunication Industry in Kenya

Abstract

The purpose of the study was to establish the outsourcing risks in the telecommunication industry in Kenya. The specific objectives of the study were to: establish the risks involved in outsourcing in the telecommunication industry in Kenya, examine how these risks affect management’s decision to outsource in the telecommunication industry in Kenya and determine the strategies to mitigate these risks in the telecommunication industry in Kenya. The study reviewed empirical study related to the study topic, theoretical review as well as coming up with a conceptual framework for the study. The study adopted a descriptive research design. The population of the study comprised of 180 staff working in the managerial position of top managers, middle managers as well as low level managers in telecommunication companies in the mobile sector who included Safaricom, Airtel Kenya, Essar’s Yu and Telcom’s Orange. The study adopted stratified sampling design where 30% of the respondents were sampled for the study. The study used a questionnaire as research instrument and the questionnaires administered through drop and pick method through self administration. The data was cleaned and sorted later for analysis. Analysis was done using descriptive analysis for the quantity data and the results presented inform of tables, whereas qualitative data was analyzed through content analysis and results presented in narrative form. The study found that financial risks, psychological risks, performance risks and strategic risks as the risks associated with outsourcing in the telecommunication industries. The different types of risks were also found to be having an impact on the managerial decisions since the different risks triggers the management to call for an overhaul at times of the outsourcing activities. This is due to the losses related to poorly planned outsourcing practices. As well, management often take personal responsibility due to outsourcing problems. The study concluded that the different outsourcing risks have an effect on the management decisions. The study recommended that the management carries out analysis of the outsourcing companies before entering into contracts with them, the study as well recommended for the adoption of operation research techniques in logistic assignment for efficiency reasons. Finally, financial experts such as managerial accountants could be hired in order to reduce on financial risks.