Effect of Outsourcing Typologies on Organizational Performance of Small and Medium Enterprises in Kenya

Author(s)

Lagat Dorcas C ,

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Volume 5 - December 2016 (12)

Abstract

The study determined the effects of Business Process Outsourcing on SME performance, effects of knowledge Process Outsourcing on SME performance. The study was guided by Resource-based View, Agency Theory, and Transaction cost Theory.This study used a combination of cross sectional and explanatory research design using a sample size of 440 SMEs. This study deployed the use of a questionnaire as a data collection technique.Descriptive statistical procedures including frequency distributions; means, standard deviation multiple regression, and correlation as a form of inferential statistical analyses were used to test hypothesis respectively.Study findings showed that business process outsourcing and knowledge Process Outsourcing have a positive effect on SME performance. It is, therefore, necessary for SMEs to outsource so as to cut on costs, focus on core business, secure business flexibility, and develop core competencies, inimitable resources and capabilities within the firm. There is a need for SMEs to embrace business process outsourcing in order for SMEs to improve their performance

Keywords

Business Process Outsourcing, Knowledge Process Outsourcing, Small and medium enterprises, Performance

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