Strategic Procurement Practices and Performance in Multinational Corporations in Kenya
Abstract
Procurement is increasingly becoming one of the critical and strategic functions of every
organization with the potential to contribute positively to the success of operations
leading to reliable service delivery and competitiveness. Strategic procurement indeed as
a tool for a firms competitiveness has a positive effect on the overall performance of the
organization and sets in motion the entire acquisition/ procurement process of all the
purchases by multinational companies. Despite this importance limited scientific research
has been done on strategic procurement practices and performance in multinational
corporations in Kenya. This study looked at the role of strategic procurement practices on
procurement performance of multinational companies in Kenya. Specifically the study
reviewed ten strategic procurement practices and how they contribute to success of
procurement function in these companies. The practices discussed mainly comprised;
established procurement council, proper staffing, technology use, strategic sourcing, total
cost of ownership, established levels of control, Social responsibility & sustainability,
supplier alliance, contracts under procurement function, company inventory and how they
affected the procurement performance of the foreign multinationals in Kenya.
It was hypothesized in the study that strategic procurement practices, positively affect the
procurement performance of the companies. Empirical data was collected from
procurement officers of the 60 respondents from the targeted population of 70. The
empirical data was analyzed both quantitatively and qualitatively to examine the
relationships between strategic procurement practices and procurement performance. The
key findings of the study indicated that only twenty seven percent (27%) of the variation
in procurement performance were explainable by the ten procurement practices. Despite
this low significance in the relationship between the variables, we recommended that the
existing procurement practices be revised and strengthened to further improve the
companies’ procurement performance. The study recommended further research to
determine the effect of supply chain strategy on performance among the all multinational
companies in Kenya, both local and foreign
Citation
Master Of Business Administration , University Of Nairobi, 2014Publisher
University of Nairobi