INFLUENCE OF OUTSOURCING ON ORGANIZATIONAL COMPETITIVENESS OF MANUFACTURING FIRMS IN MOMBASA COUNTY, KENYA

Abstract

The current study sought to establish the influence of outsourcing on organizational competitiveness among manufacturing firms in Mombasa County. The study specifically focused on establishing the influence of logistics outsourcing, human resource outsourcing, ICT outsourcing and customer management outsourcing on organizational competitiveness of manufacturing firms in Mombasa County.  The study was supported by Core Competency Theory, Human Resource Theory, Transaction Cost Theory and Resourced Based View Theory. A descriptive research design was adopted, and the target population comprised of 61 KAM registered manufacturing firms operating in Mombasa County. A census approach was involved where all the registered manufacturing firms were involved in the study. The unit of observation comprised one operation manager and one finance manager from each of the firm. A five-point Likert scale questionnaire was employed in collecting data which was analyzed using descriptive statistics and inferential statistics. Relationship of the study variables was measured using multiple regression analysis. Data presentation was in the form of tables with frequency distribution and percentages. Prior to the actual study, 5 companies from Kwale County were sampled for a pilot study to pretest the research instrument. The study established that logistics outsourcing, human resource outsourcing, ICT outsourcing and customer management outsourcing positively and significantly influence organizational competitiveness of manufacturing firms. The results imply that increasing each of the variable with one-unit results to an increase in the organizational competitiveness of the manufacturing firms with the respective beta values. The results of the study contributed to recommendations that there is a need for manufacturing firms operating in Mombasa County to enhance their outsourcing practices in areas of logistics outsourcing, human resource outsourcing, ICT outsourcing and customer management outsourcing since the practices positively influences the firms’ competitiveness levels.

Key Words: Logistics Outsourcing, Human Resource Outsourcing, ICT Outsourcing, Customer Management Outsourcing, Organizational Competitiveness, Manufacturing Firms