ISSN: 2222-6990
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The study sought to examine the influence of contractual risk on performance of manufacturing firms in Kenya. With the growing need for logistics outsourcing among the manufacturing firms, the risks surrounding the entire process are also on the rise. This comes at a time when most of the manufacturing firms are at the verge of minimizing costs and sustaining their performance, while a couple of these companies are facing performance challenges. It therefore remains unclear whether the contractual risk as one of the logistics outsourcing risks could have any influence on the performance of these firms, hence the subject of the study. Both descriptive and explanatory research designs were adopted. The unit of observation was the supply chain administrators of manufacturing firms in Kenya. Stratified sampling was conducted on all the one thousand one hundred and twenty three manufacturing firms registered by KAM, simple random sampling was carried out on the strata to identify a sample size of 295 firms. The study relied mainly on primary data which was collected through semi-structured questionnaires that were administered to administrators charged with the management of supply chain within the selected firms. Data analysis was done using descriptive statistics and inferential statistics through SPSS version 24. The findings from the study revealed that contractual risk had a significant and positive influence on the performance of manufacturing firms in Kenya. Information flow had a significant moderating effect on the relationship between contractual risk and performance of manufacturing firms. It was concluded that through the contractual risk and managing the risks appropriately, the manufacturing firms are able to save on operational costs and achieve the best out of outsourcing logistics, thus enhancing performance.
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In-Text Citation: (Kithuka et al., 2021)
To Cite this Article: Kithuka, J. M., Guyo, W., & Kiarie, D. (2021). Contractual Risk and Performance of Manufacturing Firms in Kenya. International Journal of Academic Research in Business and Social Sciences, 11(9), 1108–1119.
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