Service outsourcing and operational performance of health care NGO’s in Nairobi Kenya

Abstract

The purpose of this study was to establish the effect of Services Outsourcing and Operational performance of Healthcare NGO’s in Kenya. The specific objectives were to establish the services commonly outsourced by healthcare NGO’s in Nairobi Kenya and also to establish the relationship between services outsourcing and operational performance. Relly and Tamken (1996) mentioned that a principle objection to outsourcing is the possible loss of competitive advantage particularly the loss of skills and expertise of staff ,insufficient internal investments and the passing of knowledge and expertise to the suppliers which may be able to seize the initiative for their advantage. The target population consisted of all the 237 Healthcare Sector NGO’s operating in Nairobi County. The research design adopted was a descriptive survey method because it focuses on how outsourcing as an independent variable influences performance in healthcare NGO’s which in this case is the dependent variable. The study used Primary Data which was collected through self- administered questionnaires. The questionnaires consisted of both open ended and closed ended questions. The data was analyzed using SPSS and descriptive statistics. The findings indicate that serives outsourcing leads to improvement of healthcare’s Operational Performance. The F-Ratio shows the independent variable significantly predict the dependent variable , F(1,40)=8.974, P<.0005, the regression model is a good fit of the data. The coefficients which indicate the variance of the dependent variable with an independent variable, was found to be statistically significant, that is Beta = 0.597, t=4.363, p 0.000<0,05. The model of the study would be; Operational Performance = 0.786 +0.597 (services outsourcing) Successful implementation of services outsourcing needs top management support. Organizations must make an economical decision on what services needs to be outsourced. As a consequence the decision on whether and how to outsource is steadily moving up to the top levels of management.