Strategic Management Practices and Outsourcing Relationships among Large Scale Food Processing Firms in Kenya

Abstract

The purpose of this study was to ascertain the significant influence of strategic management practices in outsourcing relationships among the large scale food processors in Kenya. Four specific objectives formed the basis of this study which entailed establishing the influence of strategic planning, strategic quality control, employee capacity building and strategic partnerships as strategic management practices in outsourcing relationships among the large scale food processors in Kenya. This study was anchored on four main theories that explained the link of the strategic management practices and outsourcing relationships. These were the core competency theory, resource base theory, the systems theory and the contingency theory. This study employed a quantitative methodology using the survey design. The target population comprised of 181 large scale food processing firms in Kenya constituting of 10 industrial sectors registered with the Kenya Association of Manufacturers (KAM) by 2017. Stratified random sampling was employed that generated a stratified random sample of 123 large scale food processing firms in Kenya. Secondary and primary data were employed. To check for the reliability and validity of the questionnaire using the Cronbach Alpha method, a pilot study was then conducted. The semi-structured questionnaires were distributed to randomly sampled employees in the 123 firms. The study targeted one respondent chosen randomly in each firm. The data collected was sorted, coded and entered into the Statistical Package for Social Science (SPSS) software to facilitate analysis using descriptive and inferential statistics. The response rate was at 86%. Regression analysis indicated that strategic management practices explained a 69.5% significant extent of variance in the influence of outsourcing relationships since the Adjusted R2 of 0.695. Overall findings revealed that strategic planning and strategic quality control had no significant influence in the outsourcing relationships among the large scale food processors in Kenya; employee capacity building and strategic partnerships had a significant influence in the outsourcing relationships among the large scale food processors in Kenya. From the findings, the study recommends that the Government of Kenya through the relevant Ministries, needs to establish an institutional framework or guidelines for carrying out systematic outsourcing relationships among the large scale food processors in Kenya. In furtherance to that, the development of a unified risk assessment document to simplify the process of assessing the right vendor as pertaining to proposed partnerships in the food processing industry, total quality management and promotion of strategic thinking and learning are also to be considered as the fundamentals in the success of outsourcing relationships among the large scale food processing firms in Kenya