Publications

This study examined the effect of outsourcing on capital structures of Igara Growers TeaFactory (IGTF). A conceptual framework was developed about outsourcing functions. Thefindings of this research will be useful to the government agencies, private sectorfoundations for example Uganda National Chamber of Commerce among others to evaluatethe roles of outsourcing on Tea factories. The findings will also help business stakeholderson how to manage their financial performances on the decision to outsource and finally thestudy will also help future researchers as a reference on similar studies. Simple random andpurposive sampling techniques were used to select the respondents. Cross sectional anddescriptive research designs were used in the study to collect data from the field. Qualitativeand quantitative approaches were also used. The results from this research showed that theorganization outsources quality resources with high efficiency level; the outsourced humanresource, machinery and other inputs help to improve productivity and improves servicedelivery a prerequisite for capital development. 99% of the respondents agreed thatoutsourcing helps an organization to improve and create more capital for the factory. Theresearchers found out that Igara Growers Tea Factory outsources from members when theybuy shares. These shares form “owners’ equity” and they greatly improve the capitalstructure of the business. On the same issue 98% of the respondents agreed that outsourcinghelps to increase owner’s equity of the factory. The researchers found out that Igara Grower’sTea Factory cannot provide / produce all the required resources to effect production.However, when they outsource, they are able to contract external suppliers and serviceproviders to improve and sustain production. Through the interviews with somerespondents, the researchers found out that outsourcing is a strategic management skillwhere non-core functions but which functions are vital in the production process areoutsourced from specialized and reliable service providers so that organizations perform best. For example the researcher found out that procurement of firewood, computer and general equipment repair and servicing in Igara Grower’s Tea Factory is outsourced from external sources to improve performance and service delivery. It was found out that outsourcing has reduced overhead costs in Igara Growers’ Tea Factory because it is cost effective and certain costs like depreciation maintenance of equipment and machinery among others are then met by contractors / external service providers while Igara Growers Tea Factory concentrates on core production areas. The results showed that outsourcing increased the capital structure of the factory of IGTF. In conclusion, the results from this research showed that outsourcing improved the capital structure of the factory of IGTF.