International Journal of Business & Law Research 3(2):96-109, April-June 2015


© SEAHI PUBLICATIONS, 2015

EFFECTS OF OUTSOURCING OF NON-CORE SERVICES ON ORGANIZATIONAL PERFORMANCE: A CASE STUDY OF PUBLIC PROCUREMENT OVERSIGHT AUTHORITY



1MOHAMUD Hassan Mohamed & Dr. Amuhaya IRAVO2

1M.Sc Scholar, Jomo Kenyatta University Of Agriculture And Technology, Kenya
2Lecturer Jomo Kenyatta University Of Agriculture And Technology, Kenya

ABSTRACT
The growth in outsourcing over the last two decades has been unprecedented and today many firms use outsourcing. The study sought to analyze the effects outsourcing of noncore services on organizational performance. The purpose of this study was to assess the effects of outsourcing of noncore services on organization performance of the Public Procurement Oversight Authority (PPOA). The objectives of this study are; to identify how outsourcing of noncore services affects the performance of PPOA; to identify the benefits of outsourcing of noncore services at PPOA; and to find out the problems of carrying out outsourcing of noncore services at PPOA. The research study employed the use stratified random sampling technique where the respondents stratified into two strata: managers and other junior employees’ stratum. Stratified random was used because the population was heterogeneous. The study population consisted of staff at PPOA. A sample of 40% comprising managers and other junior staff was surveyed.. The study established that supplier selection process, relationship management, contract management and organizational resources are essential element in outsourcing of noncore services that influences organizational performance at PPOA. The study concluded that outsourcing of noncore services significantly impacted on the organizational performance at PPOA. The establishment and management of a contractual relationship with external supplier have influenced organizational performance at PPOA. The study recommends that Public Procurement Oversight Authority management should create a crucial distinction to using outsourcing as an effective strategy and determine which activities are best suited for outsourcing.
Keywords: Outsourcing, supplier selection processes, buyer-supplier relationships, organizational resources, contract management and Organizational performance