INFLUENCE OF BUSINESS PROCESS OUTSOURCING ON THE ORGANIZATIONAL PERFORMANCE IN SELECTED LOCAL AIRLINE INDUSTRIES IN KENYA

Abstract

The purpose of this study was to establish the influence of business process outsourcing on the organizational performance in selected local airline industries in Kenya. Specifically the study sought to establish the influence of supply chain management outsourcing, customer services outsourcing and technology adaptation outsourcing on the organizational performance in selected local airline industries in Kenya. In addition the study sought to examine the moderating effect of organization culture on the relationship between business processing outsourcing and the organizational performance in selected local airline industries in Kenya. The study was guided by transaction cost economic (tce) theory, core competency theory, resource based view theory and hertzberg’s two factor theory. The study used descriptive research. The target population comprised of 140 respondents from the 14 local airline companies in Kenya. Random sampling was used to select the final respondents who were departmental managers based on their working experience. Primary data was used which was collected using structured questionnaire.  Validity and reliability of the data instruments was ensured through pilot testing. Descriptive statistics like mean and standard deviation were used to summarize data. Inferential statistics such as correlation coefficients was used to test the non-causal relationship between variables while regression analysis was used to test the research hypotheses at 5% significance level with the aid of SPSS version 25. The research findings indicate respondents were in agreement that supply chain management outsourcing helps in minimizing overall cost. There was neutrality in opinion among respondents on whether with a call center, the organization has access to a team of trained, qualified professionals. There was agreement among respondents that communication has been improved in the organization due to reliable information system. Conclusion can be made that supply chain management outsourcing helps in minimizing overall cost. Conclusions were made that the call centers offer additional services, flexible schedules, and other capabilities well beyond what in-house customer service could likely handle. It was recommended that the local airline industries ensure that the service providers offer quality services as per the agreed contracts. It was recommended that local airlines should adopt customer service outsourcing in a bid to reduce time taken to deliver customer services.

Key Words: customer services, organizational performance, supply chain management, outsourcing