Outsourcing Practices and Organizational Performance in Rwanda: A Case of Ampersand Rwanda Ltd

Abstract

This paper examined the effect of outsourcing practices on performance of Ampersand Rwanda Ltd in Rwanda. The specific objectives were to determine the effect of human resource practices outsourcing on performance of Ampersand Rwanda Ltd, to assess the effect of accounting practices on organizational performance of Ampersand Rwanda Ltd, and to establish the effect of maintenance practices on performance of Ampersand Rwanda Ltd. The target population was 287 and the sample size was 182 respondents using Yamane formula. The study used simple random sampling and purposive sampling to choose respondents. The researcher collected data using questionnaire, interview guide and desk review from Ampersand reports. The researcher used descriptive (frequency, percentage, mean and standard deviation) and inferential statistics for statistical (correlation and regression analysis) information while qualitative data was analyzed using content analysis in terms of themes and subthemes. Findings on outsourcing human resource 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 have been outsourced as human resource 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 demonstrated a mean of 3.33, human resources with a mean of 4.400, information resources with a mean of 4.00 were adopted by Ampersand Rwanda Ltd. There are significant correlations found between finance 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 work force 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 work force activities was negatively associated with cost efficiency) r=.050*, p=.078), and productivity (r=-159*, p=.093), but it was positively correlated with profitability). The researcher recommended the need to rely on primary activities, and to revise its policies. The firm should adopt maintenance activities outsourcing to increase flexibility and reduce weaknesses, which can be an appropriate outsourcing activity. Keywords: Accounting and Finance Outsourcing, Maintenance practices Outsourcing, Cost Efficiency, Operational Outsourcing, Practices, Organizational Performance, Human resource practices, Productivity, and Profitability