Factors Influencing Strategic Outsourcing Practice in Airline Industry: A Case Study of Kenya Airways

Abstract

Outsourcing or sending off a job outside the company is viewed by many as recent phenomena which started after the internet boom in mid 1990s, but the fact that outsourcings history is as old as America. The general objective of the study sought to examine the factors influencing the outsourcing practice in Kenya Airways, it will be guided by the following objective: To determine the extent to which strategic plan influence strategic outsourcing in Kenya Airways, to establish the extent to which quality improvement influences outsourcing in Kenya Airways and finally to determine the effect of production cost on strategic outsourcing decisions in Kenya Airways. The study adopted a descriptive survey design. The population targeted comprised of one hundred top level management of Kenya Airways in Mombasa and Nairobi from key departments, a sample size of eighty respondents were used in the study and a sample from each key department were selected using purposive sampling. Data was collected using Questionnaires which was administered to the respondent's and analyzed using Multiple regression model so as to determine whether the sets of independent variables together predict the dependent variable. The study found out that the outsourcing decision based on the company strategic plans as a High priority and that the company policy is an indicator of how the strategic plans are performing. The study finding also revealed that it is likely that the quality maintenance and improvement cut across all the departments, and that the quality improvement and maintenance is a major competitive edge in service industry. The study found out that that the that operation cost influences outsourcing decisions, the operation cost decision made by top management in collaboration with all stakeholders and that the operation cost is extremely likely to influences the Cost of service is an indicator of how operation cost planning in efficient. The study recommends that organizations should outsource their noncore business to outside providers that can bring a cut in cost of operation to a great extent. This study further recommends that the quality of service should be enhanced through considering many choices for service outsourcing as well as their providers This study finally recommends that for organizations to enhance business agility operation, they should measure outsourcing effectiveness as regards to performance, they should put in place a standard format of measuring performance such as performance evaluation, performance ratios and performance appraisal such that the success from outsourcing management point of view is the same as what clients deem to be success.