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EFFECTS OF OUTSOURCING ON ORGANIZATIONAL PERFORMANCE AT DELMONTE KENYA LIMITED


Mr. James Karangi Maku and Dr. Mike Amuhaya Iravo


ABSTRACT

Globalization  and  accelerated  competition as well as  the ever increasing consumers demand  for value  have  pushed  firms  to create  value  through efficient  use of limited resources ;outsourcing  is one  of the ways  through  which  firms  attempt  to address  the new requirements  of the market place. Out sourcing has been adopted by many organizations with much success. These organizations have reaped many benefits of outsourcing such as access to best in class technologies and reduced costs of operations. However outsourcing may also pose major challenges to an organization like loss of control of the activities outsourced and dependency on suppliers. Available literature points to the role of outsourcing on various sectors but little research is available on the role of outsourcing in agricultural related industries. This research discussed the effects of outsourcing on organizational performance at Delmonte Kenya limited. The objectives of the study were to investigate the activities/services/products outsourced by Delmonte Kenya Limited, to establish the extent to which outsourcing has contributed to focus on core competence at Delmonte Kenya limited ,to determine the link between outsourcing and accessibility to modern technology and expertise at Delmonte Kenya Limited, to investigate whether outsourcing has contributed to costs saving at Delmonte Kenya Limited and to investigate effects of outsourcing on organizational flexibility of Delmonte Kenya Limited. The target population of the study was 250 employees who are in management levels in the company. A sample size of 70 employees was used in the study. Random and systematic sampling was used in selecting the respondents. The data was analyzed using descriptive data analysis through computer based statistical package on social sciences (SPSS). The finding shows that outsourcing has enabled the company to have greater access to Modern technology and expertise. The Company has been able to take advantage of Specialists skills and technologies which is otherwise not available internally and extremely expensive to acquire and own internally .This has enabled the organization to increase its production capacity. The company’s image has also been enhanced by being associated with niche service providers such as metro Trans and G4S. Statistically the main findings of the study were that the outsourcing has helped improve the organizations performance through improved focus on core competences (activities) access to confidential information, negative altitude of the internal staff and the risk of ‘spill over’s of the outsourcing service Providers’ problems such as labour strikes on the organization. Based on the above findings the researcher recommends that the organizations should outsource more if not all their noncore activities to the as a major strategy of remaining competitive. There should be a high level of supervision on the part of the company to maintain high level results. Specific management functions should be assigned the management of any outsourced activity as the ultimate responsibility of the outsourced activity remains with the firm. Companies should evaluate the capability and integrities of service providers before engaging them to safeguard against confidential sensitive information getting to competitors.


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