The emergence of globalization has made outsourcing to become one of the widely embraced business strategy for delivering outstanding services to consumers in the manufacturing sector. However, in spite of the increasing trend in outsourcing arrangements, there are inadequate literature underpinnings on how outsourcing activities affect organization performance in manufacturing sector. In order to bridge that gap this research sought to study the effects of outsourcing on organization performance in manufacturing sector in Kenyan firms. The research objectives were to determine whether cost affects organizational performance, to assess whether quality affects organizational performance, to find out whether technology adaption affects organization performance and finally to establish whether risks affects organization performance at Del Monte Kenya Limited. The researcher used descriptive research design method in carrying out his study. The study targeted a population of 42 management staff from three major departments namely: Production, Transport and Agriculture, Engineering. The researcher used census survey method to pick his sample. Census survey method was used because the population was a small one. Data was collected from primary sources through survey method by use of questionnaires. The data was quantitatively analyzed based on research objectives. The quantitative data was analyzed through descriptive statistics and inferential analysis by use of statistical package for social sciences (SPSS) version 21 software. Both correlation and regression analysis were done and the results reviewed that: Cost, quality, technology adaption had organization performance had a significant strong positive relationship. There was an insignificant positive weak relationship between risks and organization performance. Based on the study findings, the researcher recommended that: Organizations should not outsource an activity fully until they have confirmed beyond doubt that the service provider is capable of handling the activity, Organization should engage the service provider on the quality standards which are expected before entering into the contract, Organizations should select the service provider on the basis of consistent technical and managerial capabilities, Service providers should only handle particular risks which even if they occurred would not affect the entire organization performance.

Keywords: Core competencies, Off-showing, Outsourcing, Service Level Agreement, Sub-contracting., offshore outsourcing

Article Review Status: Published

Pages: 32-58 (Download PDF)

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