An analysis of perceived benefits and challenges of outsourcing in the mining sector in Zimbabwe

Abstract

This study’s aim was to analyse the perceived benefits and challenges of outsourcing in the mining sector in Zimbabwe. It focused on the current outsourcing models in the service industry supplying the mine and other side issues in the industry. The sub objectives to the study were formulated as follows: to establish outsourcing activities carried out by mining companies in Zimbabwe, to establish the perceived benefits of outsourcing by mining companies in Zimbabwe and lastly to find out the perceived outsourcing challenges faced by mining companies in Zimbabwe. The study adopted the positivist approach such that prediction of behaviour was made possible. The researcher used the survey research design that allowed collection of large volumes of data which was used in data analysis. A survey strategy allowed inferences to be made about the target population. A survey questionnaire was administered to 250 mine managers and contract managers of mining firms in Mashonaland Central in the mining sector of Zimbabwe. The researcher managed to collect back one hundred and eighty four (184) questionnaires which were eligible, resulting in 74% response rate. The response rate was very high as the questionnaires were self-distributed and collected at the convenient and agreed times. The researcher used stratified sampling and convenience sampling methods as the mining companies are geographically spaced.Descriptive statistics data was transported to an excel spreadsheet for easy manipulations and this enabled data to be presented using statistical principles such as percentages, bar graphs, and pie charts. The SPSS softwarewas used to help in data analysis and the correlation coefficient was used to analyze the perceived benefits and challenges of outsourcing in the mining sector in Zimbabwe. This study concluded that mining companies do outsource most of the activities outside their scope and they will be reducing the risk of keeping fixed assets that may be reduced in value by the wear and tear of resources. The findings indicated that the mining companies are enjoying the major four outsourcing perceived benefits namely (Strategic benefits; Operational efficiency benefits; Human resources benefits and financial benefits). The results indicate that there are three main challenges of outsourcing mining activities in Zimbabwe namely; Human resources challenges; Commercial challenges and financial risk and costs challenges. This study concluded that there are outsourcing of activities by mining companies, perceived outsourcing benefits and challenges faced by mining companies in Zimbabwe.