Operational Outsourcing Practices and Organizational Performance of Telecommunication Companies in Rwanda: A Case of Airtel Rwanda Plc
DOI:
https://doi.org/10.53819/81018102t2151Abstract
This study assessed effect of operational outsourcing practices on organizational performance in telecommunication companies in Rwanda with reference to a case of Airtel Rwanda Plc. The specific objectives are to determine effect of primary activities outsourcing, accounting and finance activities, back-office outsourcing on organizational performance of Airtel Rwanda Plc. The study adopted Resource-Based Theory, Transaction Cost Economic Models. The researcher employed descriptive research design and correlational research design to establish effect size for specific research objectives. The researcher drew a sample of 167 from 287 individuals using Yamane formula. The study used both simple random sampling and purpose sampling to choose respondents. The researcher collected information using questionnaire, interview guide and desk review from organizational reports. The researcher employed a descriptive and statistics for quantitative data analysis while qualitative data was analyzed using content analysis. Findings on outsourcing primary activities indicate strategic management at a mean of 4.333, service development at a mean of 3.666, and operational services at a mean of 4.000 were outsourced as primary activities. For strategic management, there was a positive insignificant relationship between strategic management and cost efficiency (=0.049, p=0.41), strategic management and profitability(r=0.074, p-value=0.233). A significant relationship was between cost leadership and sales (r=0.231**, p value=0.006), rising investment (r=0.159**, p-value=0.043), with net profit (r=0.174**=0.014). Results on outsourcing accounting and finance demonstrated a mean of 3.33, human resources with a mean of 4.400, data resources with a mean of 4.00 were adopted by Airtel Rwanda Plc. There are significant correlations found between finance and accounting and cost efficiency (r=0.215, p-value=0.048), accounting and profitability (r=0.512, p-value=0.036). Human resources were insignificantly associated with cost efficiency. There is a significant correlation found between information resources and cost efficiency (-0.523*, p-value=0.031). Results found that outsourcing security activities (mean of 3.833). Outsourcing manpower activities (mean of 3.333), outsourcing cleaning activities (mean of 2.833) were adopted. Significant correlations were established outsourcing security activities and cost efficiency (r=.167*, p=.078), outsourcing security activities and productivity (r=0.393, p-value=0.000), profitability (r=0.560*, p-value=0.056). Outsourcing manpower activities was negatively associated with cost efficiency) r=.050*, p=.078), and productivity (r=-159*, p=.093). The researcher recommended the need to rely on primary activities, and to revise its policies. The firm should adopt back-office activities outsourcing to increase flexibility and reduce weaknesses, which can be an appropriate outsourcing activities.
Keywords: Accounting and Finance Outsourcing, Back Office Outsourcing, Operational Outsourcing, Organizational Performance.
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