INFLUENCE OF PROCUREMENT PRACTICES ON PERFORMANCE OF STATE CORPORATIONS IN KENYA

Abstract

Purpose: The purpose of this study was to establish how procurement practices influence performance of state corporations in Kenya. This study specifically sought to establish the influence of relationship management, strategic sourcing, adoption of information technology, and procurement methods on performance of state corporations.Methodology: The study employed descriptive research design with target population of 146 State Corporations in Kenya and using census. The study used primary data which was collected using a comprehensive questionnaire. Quantitative data collected was analysed by the use of descriptive statistics using SPSS (version 23). Multiple regression analysis was used to establish the relation among the variables.Results: The study concludes that the set of independent variables are very significant and they therefore need to be considered in any effort to enhance perfomance of the state corporations in Kenya. From the study findings there is need for the organization to enhance supplier appraisal to improve performance of its suppliers. The organization should focus on building long lasting relationships with suppliers.There is need for the top management in the organization to emphasize the strategic role of the strategic functions. Sourcing long-range plan includes developing relationship with the key suppliers. It was concluded that supplier relationship management, adoption of IT, strategic sourcing and procurement methods had a significant positive relationship with the perfomance of state corporations in Kenya.Recommendations: The study recommends that there is need for the adoption of the IT to enhance performance of the state corporation. The study recommends for the organization to ensure that there is adequate IT infrastructure; adequate level of automation for the procurement staff in the organization, enhanced e-procurement to facilitate reduction of costs and the organization should have adequate procurement usage to enhance implementation of rules and regulations.The study recommends that the organization need to adopt the appropriate procurement methods to reduce in average inventory held. Procurement methods can lead to improved quality for goods, works and services. Effective procurement methods can match the demand and supply for goods and lead to the reduction of complaints from the users. The competitive procurement methods can reduce the overpriced bids and reduce unethical behaviour among the procurement staff.