Electronic Reverse Auctions and Procurement Performance in Multinational Pharmaceutical Corporations in Kenya

Abstract

This study aimed to establish the influence of electronic reverse auctions on procurement performance in multinational pharmaceutical corporations in Kenya. The study had three objectives namely, to establish the level of adoption of electronic reverse auction in the multinational pharmaceutical corporations in Kenya; to determine the relationship between electronic reverse auction and procurement performance in the multinational pharmaceutical corporations in Kenya and to find out the challenges faced in implementation of electronic reverse auctions by the multinational pharmaceutical corporations in Kenya. The methodology adopted was descriptive research design and primary data collected through questionnaires which were administered by electronic mails. The population was made up of all the 34 multinational pharmaceuticals corporations and two questionnaires were administered in each firm bringing a total number of respondents to 68 out of which 54 were completed and returned. Descriptive statistics was used in the analysis of objective one and three while objective two was analyzed through regression analysis. The findings show that access to global suppliers, competitive prices and having a level playing field were all adopted to a large extent by the multinational pharmaceutical corporations in Kenya. The adoption of access to global suppliers, competitive prices and having level playing fields were found to influence cost, timeliness and dependability. Generally, it was found that electronic reverse auctions influence procurement performance in the multinational pharmaceutical corporations in Kenya. Among the challenges faced in the implementation of electronic reverse auctions by the multinational pharmaceutical corporations include high initial cost of setting up, high cost of maintenance, lack of support from the top management, ICT illiteracy and disruptions due to technical hitches. The study recommends that multinational pharmaceutical corporations should highly invest in electronic reverse auction (large pool of suppliers, level playing field and competitive prices) if they are to enhance their procurement performance (cost, timeliness and dependability). Further studies should focus on the driving factors of implementing electronic reverse auctions by the multinational pharmaceutical corporations in Kenya.