Assessment of outsourcing decision-making in star-rated hotels in Nairobi-Kenya
Marete, Nelly N.
MetadataShow full item record
The emergence of outsourcing service providers in the global market and the rapid development of information technology, has brought about new dimmensions in business management. Non-core activities no longer need to be done within an organisation. These activities can now be handed over to specialist outsourcing contractors whose circumstances allow for efficient delivery at a lower cost. Deciding what represents a core-activity to an organisation , however, is not always an easy task. Nor is the decision the same for all operations. The purpose of this study was to determine trends of outsourcing in star-rated hotels and identify factors that influence the selection of operations outsourced. The specific objectives were to identify the operations commonly outsourced by hotels, determine the factors that influence the decision to outsource sevices, investigate the effects of outsourcing on hotel operations and explore the challenges of outsourcing in hotels. A descriptive survey design was used to assess the factors that influence the selection of operations outsourced. All star-rated hotels in Nairobi were targeted. A stratified random sampling procedure was used to stratify the star-rated hotels into different categories. From the selected hotels, a number of departments were purposively sampled. This gave a total sample of 100 respondents. An interview schedule was used to solicit information from the general managers while a self- administered questionnaire was used to collect data from departmental managers. The data were analyzed using both quantitative and qualitative techinques. Data were presented using tables, graphs and charts. Qualitative data were analysed using narratives and presented in exploratory and discursive form. Chi-square was used to establish the relationship between the operations outsourced and the star-rating of hotels. The findings revealed that the concept of outsourcing was not foreign to hotels as most hotel managers had already embraced it. The most commonly outsourced operations were those that involved non-core activities or the-back-of-the-house activities and those that did not deal directly with the customers, such as maintenance and security. The major factors that influenced the decision to outsource were the need to; improve quality, gain flexibility, cut costs and hence improve profitability. Outsourcing was thus a welcome bussiness concept, but one which could only be undertaken strategically and with caution. The success of outsourcing depended a great deal on the ralationship between the hotelier and the supplier. The study recommended that managers need to determine core competencies that should be kept in-house rather than be outsourced. Outsourcing would be more beneficial if it was given a strategic approach that follows a rational process of decision-making. Hence, the need to align it to the overall cooperate strategy. Managers need to select and evaluate vendors carefully and specify the quality of services needed, in order to avoid disappointments. There should be a proper and well established working framework with policies that govern the whole process of outsourcing.