Understanding the Effect of Subcontracting Practices among Manufacturing Firms in a Developing Economy: Lessons from Kenya

Sheila Atieno Nyabundi (), PhD. Dr. Renson W. Wanyonyi () and PhD. Dr. Caroline A. Oloo ()

International Journal of Supply Chain and Logistics, 2025, vol. 9, issue 7, 53 - 72

Abstract: Purpose: The current paper seeks to understand the effect of subcontracting practices among manufacturing firms in Kenya. Methodology: In a correlational survey design of 596 firms, the paper employs Kreycie & Morgan sample tables to select a sample of 234 firms. Primary data were collected sing a structured questionnaire from the heads of procurement departments who make up the unit of analysis. Descriptive statistics and linear regressions guide analysis process. Findings: Results indicate that subcontracting practices has a positive significant effect among manufacturing firms and accounts for 39% variance in performance (R2 =.390, β=.625, p<.05), providing evidence that unit adoption use of the practices improves performance by 0.625 units. Unique Contribution to Theory, Policy and Practice: Study supports knowledge in the systems theory, that subcontracting is an important sub system for alleviating firm performance. The study concludes that improvements in adoption-use of subcontracting practices improves performance in the manufacturing firms. The paper provides interesting discussions that supply chains in business firms can be agents of value creation through there sub-contracting practices, but then recognize that such efforts can only bear fruits if such firms effectively and religiously implement such practices.

Keywords: Subcontracting Practices; Manufacturing Firms; Performance; Systems Theory (search for similar items in EconPapers)
Date: 2025
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