Drivers for Effectiveness of Outsourcing of Catering Services in Public Hospitals in Kenya

Abstract

Purpose: The purpose of the study was to assess the drivers for effectiveness of outsourcing of catering services in Public Hospitals in Kenya. The study was guided by the following specific objectives: to  analyze the factors which contribute to the effectiveness of outsourcing of catering services in public hospitals in Kenya; to evaluate the benefits derived from outsourcing of catering services by public hospitals in Kenya; to assess the challenges to effective implementation of outsourcing of catering services in public hospitals in Kenya; and to establish possible interventions that could be employed to enhance effectiveness of outsourcing of catering services in public hospitals in Kenya. Methods: A descriptive survey focusing on Coast Provincial General Hospital and Nyeri General Hopsital was undertaken. There were three respondents from each of the two hospitals – The hospital administrator, the head of procurement function and the head of catering services.  Both secondary and primary data were collected. The questionnaire, which is the main data collection instrument, enabled the researcher to gather in-depth information on phenomena under investigation. The researcher also used interview schedules, which had open questions, aimed at meeting the objectives of the study. In addition, observation method was used in confirming the questionnaire responses. Analysis: For purposes of the current study, the data was analyzed by employing descriptive statistics such as percentages, frequencies and tables. Computation of frequencies in tables, charts and bar graphs was used in data presentation. In addition, the researcher used standard deviations and mean scores to present information pertaining to the study objectives. The information was presented and discussed as per the objectives and research questions of the study. Results: The type of services outsourced by public hospitals in Kenya:- Information Technology; Human Resources; Facilities and real estate management; Accounting and Auditing; Cleaning Services; Customer Care; Security services; and Maintenance of the Information Technology system and equipment. The factors that influence outsourcing of services in state corporations:- Competition for professional services; Operational Costs; Nature of business of the corporation; Changing working environment; Management Policies; Government rules and regulations; and Procurement processes and policies. The benefits derived from outsourcing of services include the introduction of workforce flexibility by outsourcing the peripheral workforce; the problem of managing industrial relations is minimized; Increase the proportion of white collar employees at the expense of blue-collar employees, a move aimed at improving the status of manager; reduced costs and increased efficiency; and Focus on core competencies (the specialized nature of an organization’s competitive advantage). The findings of study indicate that the major challenges faced by state corporations in Kenya in implementation of outsourcing process include the following:- Lack of clear policy framework and guidelines; Weak enforcement mechanisms; Centralized and lack of transparency in outsourcing; Contracts do not always meet the specific needs of user-institutions; Opposition from the staff and resistance to change; If a services provider does not have efficiency, then it is unlikely to expect efficiency transfer to clients; The external systems may not be compatible with internal ones; One time results from outsourcing are unsuitable and costs are likely to escalate because of the power asymmetries that enable the service provider to charge high premium for add-on-services; and Lack of user involvement in design – over engineered applications. The findings of study indicate that the possible interventions that organizations could employ to enhance effectiveness in outsourcing include:- The organization should try to outsource project management responsibility; The outsourcing project scope ought to be defined; There is need to clearly define expectations from the project; The need to clearly define the Key performance indicators; The need to effectively manage internal conflicts / politics; and Business case / total costs are not realistic

Key words: Outsourcing, Catering services, Public Hospitals