Determinants of Procurement Function and Its Role in Organizational Effectiveness

Abstract

Procurement function is a crucial activity in any organization and must be conducted efficiently and effectively. Organizational effectiveness is achieved through among other ways, efficient procurement function. therefore, this study sought to determine the determinants of procurement function and its role in organizational effectiveness. Objectives of the study were; to identify the determinants of procurement function and its role in organizational effectiveness, to find out the role of determinants of procurement function on organization effectiveness, to find out the challenges facing procurement function and to establish the policies to be suggested for effective procurement function at Moi Teaching and Referral Hospital. A case study research design was used and questionnaires administered to respondents. The study population was 142 employees at MTRH from where a sample size of 42 respondents was chosen by rule of the thumb that is 30 percent of 140 employees. The employees were first grouped into their respective departments from where they were chosen randomly. Data was coded, then analysed and presented in tables and charts inform of percentages and frequencies. From the analysis, the study established that; of the employees, 47 percent cited on the type of management as the most determinant factor of procurement function, 19 percent cited on availability of enough financial resource, 17 percent cited on the nature of the services offered by the organization which had the same percentage with the employees who cited on the market structure of the suppliers. Of the 42 employees, 36 percent cited on proper utilization of resources, 24 percent cited on proper cut on stock out cost 19 percent cited on low or no scraps, 12 percent cited on low input, high output and the minority group 9 percent cited on shorter operations and production types. Concerning the challenges facing procurement function, 48 percent cited on the lack of the right input of material, 10 percent cited on poor utilization of resources, 14 percent cited on lack of professionally qualified and experienced employees and finally 28 percent cited on technology change. from the findings it shows that the organization should choose the right input of material in order to improve on the efficiency and also they should learn to adapt on any technology change as technology improves the efficiency of the organization. The study concluded by suggesting the following policies to aid in procurement function; Consistence and full compliances with the public procurement and disposal act Promotion of economy, efficiency and value for money practices, good practices and linkages with larger public finance management, Enactment of applicable ethics in procurement and government guidance on procurement procedures