Impact of Outsourcing Practices on the Financial Performance in Kenya Power Ltd
DOI:
https://doi.org/10.47604/ejbsm.3959Keywords:
Outsourcing Strategies, Performance, Kenya Power LimitedAbstract
Purpose: The aim of the study was to assess the effectiveness of outsourcing practices on the financial performance of Kenya Power Limited.
Methodology: The study used descriptive survey design. The population of the study was 3200. The unit of analysis was the employees of the Kenya Power. The study applied stratified random sampling technique. A sample of 320 respondents was taken. The study utilised primary sources of information which were gathered by use of questionnaires containing close ended questions. Data was analysed using SPSS version 17. Data was presented in form of tables and figures.
Findings: The study findings indicated that strategic alignment was a key determinant of profitability. Therefore, organizational characteristics should be considered when deciding to outsource functions or activities. Based on findings it is possible to conclude that outsource vendors affect profitability. To improve the company’s profitability it always wise to overlook the consequences to avoid lock in situations before coming to any agreement. Outsourcing risk management practise affects profitability. Since outsourcing introduces new challenges and risks the company reduces the power to conclude deal and therefore loses. Findings also led to the conclusion that trust building practice affects profitability. The relationship style consider affective factor in customer retention. If the relationship among the company and customer is exceeding the customer will gain trust.activities that are core to its business, retaining them and making noncore activities candidates for outsourcing.
Unique Contribution to Theory, Practice and Policy: The study was anchored on agency theory and outsourcing. The study recommended that companies must proactively manage their outsourcing strategies by establishing top management commitment, global sourcing structures and processes.
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