Intervening Role of Operational Efficiency on the Relationship between Business Process Outsourcing and Performance of Oil and Gas Distribution Firms in Kenya
Abstract
The Theory of Constraints and the Dynamics Capability theory propagate that firm.s resources and capabilities may vary significantly hence the need for adopting various operational efficiencies to improve the weakest chains in business structures to improve firm performance. The study determined the influence of operational efficiency on the relationship between Business Process Outsourcing and performance of oil and gas distribution firms in Kenya. The cross sectional descriptive survey research design where all the oil and gas distribution firms in Kenya registered with the Energy Regulatory Commission formed the study population. Primary and secondary data was collected through a semi-structured questionnaire. The unit of measurement in the study was the firm. Simple & multiple regression and correlation analyses were used to test the hypothesis. The findings provided satisfactory statistical evidence indicating that operational efficiency had a full mediation between BPO and performance. These results infer that operational efficiency fully mediate the relationship existing between business process outsourcing and performance of oil and gas distribution firms in Kenya. The alignment between BPO, operational efficiency and firm performance is critical in the outsourcing process hence the need to develop strategic outsourcing and its future core capabilities, firm structure and competitive position and adjust these to the long-term business strategy.
Keywords: Business process outsourcing, Operational efficiency, Performance, Firm Oil and Gas
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