Procurement Practices and Performance of Firms Listed at the Nairobi Securities Exchange

Abstract

The study main objective is to investigate the procurement practices and its influence on the performance of listed firms at NSE. The study was guided by two objectives which were to establish the procurement practices commonly used by firms listed at the NSE and to determine the relationship between procurement practices and performance of firms listed at NSE. The target population of the study were all the agricultural firms listed at the NSE which were found to be 61 companies. The data collected from the field was first edited then coded. The study found out that the use of e-procurement has reduced the operational costs of the organization due to reduction in paperwork. The findings indicate that the firms outsource procurement practices such as evaluation of prices, the supplier selection and all paperwork and accounting services. The study found that E-procurement has an effect on the performance. Procurement processes are automated and hence could contribute towards realizing firm’s performance. The study found that procurement planning affects firm performance. This is shown by the way most firms have put emphasis on planning for its procurement practices. Planning procurement practice has enhanced the procurement process in the organization.