A Survey on Outsourcing of Selected Financial Activities by Publicly Quoted Companies in Kenya

Abstract

The primary objective of this study was to investigate the extent of outsourcing of financial activities in Kenya. The rationale of the study arose from the fact that, current challenging and ever-changing business environment calls for management attention to focus on their core competencies to create sustainable and competitive edges. Outsourcing was studied as one of the techniques that could assist management to focus on core business. To facilitate this study, the population of active companies quoted in Nairobi Stock Exchange was studied. The respondents gave information on benefits, motives and reasons for and against outsourcing of selected financial activities through a self administered questionnaire. The results indicate 46.'9% of respondents practise outsourcing where the main activity outsourced is tax compliance. The main reason for outsourcing is to take advantage of external expertise and experience available in the market so that the company can focus C?nits core business. Those companies that do not outsource indicated outsourcing being expensive in terms of financial costs. These results should be interpreted in consideration that all sampled companies are large companies who have been in operation for a long duration.