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CHAPTER I

INTRODUCTION

1.1 Background of the Company


A recognized name in the industry, Amaya Resorts and Spas stands as the stylish, forwardthinking leader of hospitality in Sri Lanka. With a legacy of offering travelers an experience that speaks of discoveries, explorations and adventures under the umbrella theme "Reflections of Sri Lanka" - Amaya continues to be synonymous with innovative hospitality, one that brings to light the culture, nature and beauty of this charming island. And also Amaya chain has main two four star hotels and three managing hotels. Basically giving priority for Amaya Lake and Amaya hills and other managing hotels such as Hunas Falls, Langdale and Coral rock are being handled by Amaya management Products and Services Amaya behavior is a reflection of what we believe. It is the perfect demonstration of service culture, of values that is deeply grounded in each of us. Since inception, Amaya has built upon this foundation of beliefs that have helped us define who we are, how Amaya behave and how interact with each other. We hold values such as respect, dignity, trust and simple manners with the highest regard - stemming to all our interactions with our guests, business associates and colleagues. Performance The performance of the Company has been increasing since its beginning. Starting off as a small chain of hotel with services of connissance travels the Company now employs most of the individuals on a permanent basis. Main thing is Amaya Lake was able to achieve best four star hotels in 2012

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1.2 Problem Statement


Amaya Leisure Plc. has been identified number of issues arising confusion of the operation& procurement divisions for the past few years. For a instances Most of the capital expenditure items are unable to use estimated working capacity. Usually those problems arising with the lack of knowledge in labor of operation & ruthless usage of procurement functions, apart from that difficult to hold stable rates with quality in the specific time period, sometimes lead time getting high if payments getting delay or any other circumstance then entire operation flow highly effected. Because of all issues supplier obligations getting high, Day to day operations process become problematic situation then which will affect the whole departments task flows, ultimately company reputation & total profit and revenue might face to serious position. Therefore research has to be done for improving customer satisfaction by making better operation flow with the assistance of Procurement Division in order to decrease customer obligations & keeping smooth day to day operation then through of those things enhancing the customer satisfaction and in the end company total profit revenue& reputation would get upgraded

1.3 Research Objectives


To find out effective purchasing way for minimizing the waste of capital expenditure To identify the appropriate way to hold prices on par quality maintain To minimize the internal delays of authorization and hold sound cooperative relationship with other departments To identify the better payment paying system

1.4 Research Question


Research Question How to make effective procurement procedure for minimizing the waste of capital expenditure, with the intention of improving customer satisfaction through enhancing the performance level of operation?

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What is the best way to hold stable rates& maintain the quality with the aim of keeping the quoted prices for improving customer satisfaction through enhancing the performance level of operation?

How to pay attention for minimizing lead time by getting rid of the internal delays of authorization for improving customer satisfaction through enhancing the performance level of operation?

1.5 Significance of the Study


The significance of this study is that I was able to get a broad understanding of how to implement the better system to the process. I had to consider how to improve customer satisfaction therefore I recommend and try to implement following things I tried to increase effectiveness and efficiency of the current employees from these things ultimately the company can achieve, High quality standards belongings purchasing Improved internal customer satisfaction Improved internal authorization procedures Getting rid of payment delays as soon as possible

Further this study is important not only to improve customer satisfaction, but also to save resources. The way of implementing it currently, causes to waste of resources. Ineffective & inefficient features are the weaknesses of the process. Those weaknesses should be eradicated in order to make the whole thing effective & efficient.

1.6 Research Methodology


With the help of literature review researcher develop the conceptual frame work to find the answers for the research questions. Formulate the hypothesis to build the clear frame work. And other part will include selecting sample, and data collection.

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1.7 Limitations of the Study


The time taken to each activity is difficult to measure when it not practically happen during the limited time period and also due to the non-value added activities involve in the activities. The amount of data collection are limited only for 100 is might move us from the actual result. Some staff members effectiveness is not at very high standard since it is very difficult to set time standards for them Some critical procedures higher management doesnt like to change the current situation and doesnt like to disclose their company regulation

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CHAPTER II
LITERATURE REVIEW

2.1 Introduction
This chapter will give an overview of literature and models that are related to the research problem presented in the previous chapter. This chapter would introduce the concepts of customer satisfaction, then relation between customer satisfaction and service quality, service performances quality dimensions, in order to give a clear idea about the research area.

2.2 Customer Satisfaction


The most broadly recognized model, satisfaction is a function of disconfirmation, which in turn is a function of both expectations and performance (Oliver, 1997). The disconfirmation example in process theory provides the basis of the vast common of satisfaction studies and includes four constructs expectations, performance, disconfirmation and satisfaction (Caruana etal., 2000). This model suggests that the effects of expectations are mainly through disconfirmation, but they also have an effect through perceived performance, as many studies have found a direct effect of perceived performance on satisfaction (Sprengand Page, 2001). Swan and Combs (1976) were among the first to argue that satisfaction is associated with performance that fulfills expectations, while dissatisfaction occurs when performance falls below expectations. In addition, Poiszand Von Grumbkow (1988) views satisfaction as an inconsistency between the observed and the desired. This is consistent with value-percept disparity theory (Westbrook and Reilly, 1983) which was developed in response to the problem that consumers could be satisfied by aspects for which expectations never existed (Yi, 1990). The value-percept theory views satisfaction as an emotional response triggered by a cognitive-evaluative process (Parker and Mathews, 2001). In other words, it is the comparison of the ``object to ones values rather than an expectation. Customers want a meeting between their values (needs and wants) and the object of their evaluations (Paker and Mathews, 2001). More recently, renewed attention has been focused on the nature of

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satisfaction emotion, fulfillment and state (Parker and Mathews, 2001). Consequently, recent literature adds to this perspective in two ways. Customer satisfaction is essentially the result of intellectual processes; new conceptual developments suggest that affective processes may also contribute substantially to the explanation and prediction of consumer satisfaction (Fornell and Wernerfelt, 1987; Westbrook, 1987; Westbrook and Oliver, 1991). Second, satisfaction should be viewed as a judgment based on the cumulative experience made with a certain product or service rather than a transaction-specific phenomenon (Wilton and Nicosia, 1986). There is general agreement that: Satisfaction is a persons feelings of pleasure or disappointment resulting from comparing a products perceived performance (or out come) in relation to his or her expectations (Kotler, 2003, p. 36). Based on this review, customer satisfaction is defined as the result of a cognitive and affective evaluation, where some comparison standard is compared to the actually perceived performance. If the perceived performance is less than expected, customers will be dissatisfied. On the other hand, if the perceived performance exceeds expectations, customers will be satisfied. Otherwise, if the perceived expectations are met with performance, customers are in an indifferent or neutral stage. Customer satisfaction is defined as a customers overall evaluation of the performance of an offering to date. This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories (Gustafsson, 2005).The satisfaction judgment is related to all the experiences made with a certain business concerning its given products, the sales process, and the after- sale service. Whether the customer is satisfied after purchase also depends on the offers performance in relation to the customers expectation. Customers form their expectation from past buying experience, friends and associates advice, and marketers and competitors information and promises (Kotler, 2000). Factors which determine the extent of expectations are: customer needs, total customer value and total customer cost. It is mentioned by researchers who study customer choice that choosing a product or service is only one of the stages customers go through. A purchase decision is influenced by the buyers characteristics. These include cultural, social, personal and psychological factors. In addition to the buyers characteristics, a purchase decision is influenced by the buyers decision process. The typical buying process develops through five
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stages: 1 new recognition; information search; 3 information evaluation; purchase evaluation (Chaston, 2001). Searching for information is a key stage of a consumers decision-making process and may include a search for both internal and external information. As the perceived risk of a purchase decision increases, consumers search for more information in order to cope with uncertainties about the potential positive or negative consequences (Jihye Park, 2005). According to the above stated literature it can be proved that there is relationship between customer satisfaction and performances level. Hence when considering about the improving performances level there are many things have to be improved out of these factors it is selected that contribution of procurement functions to the performances level. According to the procurement function it is selected three sub categories for the convenience of analyzing Amaya Hills the research. They are authorization delays, supplier selection and payment delays. Then moving to the literature of independent variables it can be stated as follows

2.3 Internal Delays for Authorizations


Definition of Delays In general, delays are among the most common problem would happen in the higher management which may occur in a simple or a complex circumstances. Many researchers have defined construction delays in their own word but it also brings the similar meaning.

Types of Delays Delays can be groups in the following four broad categories according to how they operate contractually. Non- excusable delays Excusable non- compensable delays Excusable compensation delays Concurrent delays
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Inexcusable Delays (Non-Excusable Delay) This cause of delay is causes by the higher management own actions or inactions. It is a delay that the wrong decisions may be able to foresee or prevented, but they failed to do so (Last, 1997). These delays might result of underestimates of productivity, inadequate scheduling or mismanagement, construction mistakes, weather, equipment breakdowns, staffing problem. Such delays are inherently the higher management responsibility and no relief is allowed. Contractor is cannot discharge his liability to others and must spend up the work when delay in construction project or compensate to owner (alkass et al, 1996). This compensation may come out by either liquidated damages or actual damages clause in the contract. Abd.Majid (1997) study that Liquidated damages are generally expressed as a daily rate that is based on a forecast of costs the owner is likely to incur in the event of late completion by the contractor. Inexcusable delays may be considered as breach of contract (Last, 1997)

Excusable Delays (Non- Compensable Delays) This cause of delay is arises by the third parties or can incidents that beyond the fault or negligence of the parties of the contract like client, contractor, and consultant. It means that the caused of delay are not foreseeable, Alkass et al. (1996). These included the acts of the public enemy, acts of the owner or those under his control, acts of the owners independent contractors, unusual weather, strikes, fire, act of government in its sovereign capacity, floods, epidemics, freight embargoes and etc. In this cause, the contractor will entitle to a time of extension (EOT). This type of delays can have an impact on non-critical activities which need a more detailed analysis to determine whether additional time extension is warranted or if the reduction of float time can be justified, Alkass et al (1996). Excusable delays can be classified in to compensation delays and without compensation delays

Excusable Delays with Compensable Delays Higher management is deemed to be compensable when the delay is within the control and the fault is due to the project owner own negligence (Sweet 1977). These compensable delays are excusable delays, suspensions, or interruptions to all or part of the work by the owner or the owners agents resulting from breach of an obligation, stated or implied, in the contract.
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Alkasset. Al, (1996) say that the Contractor is entitled not only to an extension of time but also the monetary compensation due to this type of delays. However, the contractor must prove that the delay was unreasonable and also the extent of the additional expenses involved (Clough, 1975).

Concurrent Delays Concurrent delays occur when the delay event occur in the same time period, which affects the completion date on the project (Reynolds and Revay, 2001) Concurrent delays occur when both Owner and the Contractor are responsible for the delay. Generally, if the delays are inextricably intertwined, neither the Contractor can be held responsible for the delay (forced to accelerate, or be liable for liquidated damages) nor can he recover the delay damages from the Owner. (Ahmed et al, 2002) The ways to determine which delays are concurrent is difficultly. The resolution is by a contentious legal.

2.4 Supplier Selection


Supplier Selection Criteria One major aspect of the procurement function is supplier selection criteria. The analysis of evaluation, selecting the right supplier, and creating the criteria that are needed in the organization to measure the performance of suppliers have been important for many scientists since the 1960s. In the mid 1960s, many researchers were developing different methods and approaches to choose the needed criteria that could be good tools to evaluate suppliers. Dickson (1966) was the first researcher who performed an extensive study on criteria. His study was to determine, identify, and analyze what criteria were used in the selection of a firm as a supplier. Dicksons study (1966) was dependent on a questionnaire, sent to 273 purchasing agents and managers selected from the membership list of the National Association of Purchasing Managers. The list included purchasing agents and managers from the United States and Canada, which was a total of 170 regarding the importance of 23 criteria for supplier selection. Dickson asked them to order the importance of each criterion
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on a five point scale: extreme, considerable, average, slight, and of no importance. He came up with quality is the most important criterion. The important criteria dependent on the study were delivery and performance history (Tahriri, Osman, Yusuff and Esfandiary, 2008).

Weber, Current and Benton (1991) presented a classification of all the articles published since 1966 according to the treated criteria. Based on 74 papers, the outputs observe that Price, Delivery, Quality, and Production capacity and location were the criteria most often treated in the literature (Tahriri; Osman; Yusuff and Esfandiary, 2008).

According to Weber, Current and Benton (1991), the review of the articles about supplier selection between 1966 and 1991 were investigated. In a related study, Zhang, Lei, Cao and Ng (2003) collected 49 articles between 1991 and 2003, which was a comprehensive classification of supplier selections published. The study of Zhang, Lei, Cao and Ng (2003) was done based on the Weber, Current and Benton (1991) study, and the 23 criteria of Dicksons (1966) study. The study concluded that net price, quality, and delivery were the most important supplier selection criteria. As concluded from three different studies, price is the number one selection factor, replacing Dicksons (1966) number one ranked quality criterion (Tahriri, Osman, Yusuff and Esfandiary, 2008). In addition to Dickson (1966), Weber, Current, and Benton (1991) and Zhang, Lei, Cao, and Ng (2003), other researchers have also recently begun discussing new important criteria to select suppliers. The definition of Dicksons (1966) 23 criteria has been expanded, and some new criteria were developed with the growth of new business needs. The review performed by the Bross& Zhao study concluded that the most valuable supplier selection criteria were cost, quality, service, relationship, and organization (Bross& Zhao, 2004).

After Webers work, most researchers focused on supplier-selection criteria in either specific industries or specific countries. Since Internet-based businesses have grown rapidly since 1995, vendor criteria have changed a great deal, thus corresponding to the business environmental changes (Sonmez, 2006).

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While a number of supplier selection criteria studies have been conducted over the years, Dickson (1966), Weber, Current, and Benton (1991) and Zhang, Lei, Cao, and Ng (2003) are still recognized as the most common, and cited as the most comprehensive studies done on selection criteria. (Appendix1) summarizes some of these criteria, which have appeared in literature since 1966 (Ha and Krishnan, 2008).

One of the most important processes performed in organizations today is the evaluation, selection, and continuous measurement of suppliers. Selecting a vendor is now as important a process as developing new products. Supplier selection process is a multi-criteria problem, which includes both qualitative and quantitative factors. Purchasing commands a significant position in most organizations since purchased parts, components, and supplies typically represent 40 to 60 percent of the sales of its end products. Thus relatively small cost reductions gained in the acquisition of materials can have a greater impact on profits. Suppliers have a large and direct impact on the cost, quality, technology, and time-to-market of new products (Chen, Lin & Huang, 2006).

Supplier Selection with AHP Method Analytic Hierarchy Process (AHP), since its invention, has been a tool at the hands of decision makers and researchers, and it is one of the most widely used multiple criteria decision-making tools (Omkarprasad& Kumar, 2006). There are many strongest features of the AHP, for example it generates numerical priorities from the subjective knowledge expressed in the estimates of paired comparison matrices. The method is surely useful in evaluating suppliers weights in marketing, or in ranking order for instance. It is, however, difficult to determine suitable weight and order of each alternative. It has been shown that Different weights among objects give rise to different results in ranking (Liu &Hai, 2005). Choosing the supplier who submits the lowest cost is not a good choice necessarily. It might cost more than what is submitted, when the merchandise is not high quality, for instance. Developing a model by using the AHP approach could decrease the delayed order. Giving
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other criteria the needed attention to select the supplier by focus on its financial stability, history, and other criteria could be the right way to choose the correct supplier. Getting the right cost and the right time and the right specification is what needed in ABC Company.

2.5 Payment Delays


To the best of our knowledge, a time-based contract with a delayed payment has not been examined previously in the literature.6 In particular, there are three features of the time-based contract analyzed in this article which dier markedly from the existing supply contract literature. First, under the delayed payment regime, each supplier receives payment at the time when both suppliers have completed their tasks. Consequently, each supplier needs to take into account the other suppliers behavior when selecting her own work rate. It is through this interaction among suppliers that the several underlying supply contracts are, in eect, transformed into a single joint supply contract between the manufacturer and his multiple suppliers. This linking of the several suppliers is a fundamental and crucial departure from the traditional supply contract. Second, in our model, the supply contract is specied by the price paid to each supplier and the time of payment; the suppliers response to these two contract terms is her work rate. These three choice variables, price oered, time of payment, and work rate, are fundamentally divergent from5See so (2000) and the references therein for more details. 6The reader is referred to comprehensive reviews of supply contracts provided by Cachon (2003) and Tang (2006).The traditional supply contracts in the Operations Management literature. There the manufacturer sets the wholesale price schedule (often a xed cost and a constant per unit cost), and the retailer sets the order quantity (and the manufacturer has no say as regards the retail price). The reader is referred to Corbett and Tang (1998) and Cachon and Lariviere (2005) for discussions of divergent types of supply contracts that deal with price menus, information asymmetry, and revenue sharing. Third, our model focuses upon the (perhaps) uncertain completion time of all supplier tasks when the deliverable is a customized product or service. The number of units to be delivered is not an issue. In contrast, the primary focus in the traditional supply contract literature is
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uncertain customer demand. In short, the focus of our model is the time-based contract arising from delivery of the rest unit of a customized product (or service) whereas the focus of the traditional supply contract literature is on the quantity-based contract arising from a non-customized product with uncertain demand.

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CHAPTER III
METHODOLOGY

3.1 Introduction
This chapter will present detailed idea about the research will be conducted. This includes the purpose of the research, research approach, research strategy, sample selection methods, data collection methods and data analysis methods. At the end of this methodology part validity and reliability issues will be discussed to follow the quality standards of the research. Then frame of reference which brings a thorough road map of study is provided next.

One of the major exceptions getting clear understanding of the relationship between customer satisfaction and selected main procurement functions Therefore, an important requirement of this research was to develop a methodology to provide an appropriate way to examine above stated objectives.

According to the conceptual framework, a hypothesis would be constructed. The definitions of the concepts would follow the hypotheses, with their connection to the variables illustrated during the literature review. This process will be followed by data collection, sample selection and the instrument used to collect data including methods implemented to maintain validity and reliability of the instrument
which are described. Finally the chapter would end with a summary of discussions.

3.2 Research Approach and Design


The plan of the research methodology of a practical research has a substantial influence upon the nature and quality of research outputs since it influences both validity of the results and the extent to which the results can be generalized to other settings. The principal decisions involved in the research design of this research were whether to adopt exploratory approach or confirmatory approach, whether to conduct a field survey or use an experimental approach, whether to use questionnaire survey or personal interviews and whether to conduct a longitudinal or cross-sectional survey to collect the relevant data. According to the theory, the

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researcher has three alternatives in selecting the logic of a research. They are confirmatory research, exploratory research, on a combination of both.

Exploratory research is research into the unknown. It is used when you are investigating something but really don't understand it all, or are not completely sure what you are looking for. It's sort of like a journalist whose curiosity is peaked by something and just starts looking into something without really knowing what they're looking for.

Confirmatory research is where you have a pretty good idea what's going on. That is, you have a theory (or several theories), and the objective of the research is to find out if the theory is supported by the facts

However, the researcher may apply a mixed approach as the third option for the research, and it is known as combination of confirmatory and exploratory research. This research has gathered a lot of data through a close-ended questionnaire and most of the data was nonnumerical where the methodical approach of the research is qualitative.

3.3 Research Methodology


3.3.1Conceptual Model

Internal Delays for Authorization PERFORMANCE LEVEL OF OPERATION CUSTOMER SATISFACTION

Supplier Selection

Payment Delays

Independent Variable

Moderate Variable

Dependant Variable

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The questionnaire of this research is totally based on the above conceptual Framework and itis attached in the Appendix I. As state earlier the conceptual framework is categorized in to three main parts. The Part I is internal delays for authorization Part II is Supplier Selection process and Part III is payment delays

3.4 Hypothesis

H1: There is a co relation exists between Supplier selection of goods and customer satisfaction through performances level of operation. H2: There is a co-relation exists between internal authorization time and customer satisfaction through performances level of operation. H3: There is a co-relation exists between supplier payment delays and customer satisfaction through performances level of operation.

3.5 Data Collection Tool


The structure of the questionnaire plays an important role in determining the quality of the data collection in a research. The questionnaire was administered among the selected personnel who were holding every administrative position in the hotel hierarchy. Most of the questions were closed ended questions since straight forward answers were expected. The distribution of questions in questionnaires among those selected group is as follows.

VARIABLE Authorization Delays Supplier Selection Payment Delays

NO. OF QUESTIONS 15 5 10 10 16

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3.6 Data Collection


Primary Data Primary data was collected from 100 people. In distributing questionnaires, stratified simple random sampling method was used to avoid receiving unnecessary data.

Interviews

To get more awareness into the problems in customer satisfaction, interviews have been conducted with Amaya Hills Hotel staff & Kingsbury Hotel. Observations

Observations have been carried out in some of the hotels to understand the procedures of Procurement functions. Secondary Data A literature survey was carried out by referring, various types of books, magazines, reports, and internet to gather information in the field of conflicts management.

3.6.1 Population This Service in entire hotel is presently being under two areas of conflicts. This research mainly focused individual employees as the target population. However respondents like working staff were excluded from the research population as their management involvement is minimal compared to the executive level employees. As a result, the target population was defined as those who were at executive level. Apart from these two criteria, there were no other criteria that were necessary to be imposed on the target population.

3.6.2 Sampling When choosing the proper sample from the entire population two types of sampling techniques were used. To select the suitable number of hotels and employees Stratified Sampling Method was used and they were bunched as star categories. After that Simple Random Sampling Technique was used to deliver the questionnaire among employees of the hotels.

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3.7 Data Analysis


Initially data was processed manually. That process included the data coding, classification, numbering and editing. Then a work sheet was prepared by using MS Excel. In scaling data, a well-known five point Likert Scale was used. It is a method frequently used in questionnaires and survey researches. Therefore, the following five ordered response levels were recognized. Highly disagree (SD) [1] Disagree (D) [2] Neither agree nor disagree (NA) [3] Agree (A) [4] Highly agree (SA) [5]

3.8 Presentation of Data


The collected data through the questionnaires will be analyzed by using analytical tool SPSS version 21.0. By using the above tool the gathered information will be presented through statistical and analytical methods such as frequency, percentage, mean scores, standard deviation, factor scores, cluster of groups, P value > 0 to test the five objectives (Impact, Factor, Behavioral, Significant differences and Relationship) of the research. Having refined and tabulated all the data it will be presented through histograms, pp plot charts etc.

3.9 Chapter Summary


This chapter illustrates the research approach and the way the designing should be completed. When the questionnaire was designed abstract statements were used as a data collection tool. By using the sampling techniques the required sample was decided. The data analysis was performed according to the new conceptual framework by applying various analysis methods. Finally the gathered information will be presented through statistical and analytical methods and refined data will be presented in a statistical manner.

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CHAPTER IV
DATA PRESENTATION & ANALYSIS

4.1 Introduction
This chapter will focus on presenting the data which was gathered through the previous chapter of the research. The data pertaining to the ENHANCING CUSTOMER SATISFACTION BY IMPROVING PROCUREMENT FUNCTIONS IN THE SUPPLY CHAIN would be presented according to the questionnaire and findings. The sample characteristics will be illustrated graphically and the composition of the respondents would be also illustrated. The responses for each variable would be presented with statistical background.

The section 4.2 briefly describes the descriptive statistical analysis of Customer Satisfaction, Internal Delays for Authorizations, Supplier Selection and Payment Delays. This was further elaborated by showing the histograms of Customer Satisfaction, Internal Delays for Authorizations, Supplier Selection and Payment Delays using survey data.

The section 4.3 briefly describes the analysis of Customer Satisfaction, Internal Delays for Authorizations, Supplier Selection and Payment Delays. The factor analysis was used to identify the factors that affect Customer Satisfaction, the co-relation analysis was used to identify the behavioral and contextual situation of customers and chi-square and regression methods were used to identify the significant relationship between Customer Satisfaction, Internal Delays for Authorizations, Supplier Selection and Payment Delays. A hypothesis testing also carried out to prove the pre determined hypothesis validity as well.

The section 4.4 briefly describes the chapter summary by illustrating the various analysis of data received from the user questionnaires.

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4.2 Descriptive Statistical Analysis


Internal Delays for Authorizations

Table 4.1

INTERNAL AUTHORIZATION DELAYS Frequency Percent Valid Percent Cumulative Percent Valid 3.8 4.0 4.2 4.4 Total 11 55 21 13 100 11.0 55.0 21.0 13.0 100.0 11.0 55.0 21.0 13.0 100.0 11.0 66.0 87.0 100.0

This above Table 4.1 suggests that most of the customers are agreed for that there is an internal authorization delay in the organization. The frequency level over 4.0 is the satisfied level and it shows that 89 people are agreed to the above variable.

Table 4.2 INTERNAL AUTHORIZATION DELAYS N Valid Missing Mean Mode Std. Deviation Skewness Kurtosis Minimum Maximum 4.072 4.000 0.169 0.553 -0.256 3.800 4.400 100 0

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Figure 4.1

Supplier Selection

Table 4.3 SUPPLIER SELECTION CONFLICTS Frequency Percent Valid Percent Valid 4.0 4.2 4.4 Total 63 20 17 100 63.0 20.0 17.0 100.0 63.0 20.0 17.0 100.0 Cumulative Percent 63.0 83.0 100.0

This above Table 4.3 suggests that most of the customers are agreed with the fact that there is a supplier selection process problem. The frequency level over 4.0 is the satisfied level and it shows that all the people (100) are agreed to this independent variable.

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Table 4.4 Statistics SUPPLIER SELECTION CONFLICTS N Valid Missing Mean Mode Std. Deviation Skewness Kurtosis Minimum Maximum 4.108 4.000 0.154 1.011 -0.556 4.000 4.400 100 0

Figure 4.2

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Payment Delays

Table 4.5 PAYMENT DELAYS Frequency Percent Valid Percent Cumulative Percent Valid 3.8 4.0 4.2 4.4 Total 13 57 17 13 100 13.0 57.0 17.0 13.0 100.0 13.0 57.0 17.0 13.0 100.0 13.0 70.0 87.0 100.0

This above Table 4.5 suggests that most of the customers are agreed with the fact that there is a payment delay in procurement department. The frequency level over 4.0 is the satisfied level and it shows that 87 people are agreed to this variable as well.

Table 4.6 PAYMENT DELAYS N Valid Missing Mean Mode Std. Deviation Skewness Kurtosis Minimum Maximum 4.060 4.000 0.171 0.645 -0.127 3.800 4.400 100 0

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Figure 4.3

Customer Satisfaction

Table 4.7 CUSTOMER SATISFACTION Frequency Percent Valid Percent Cumulative Percent Valid 4.67 5.00 Total 37 63 100 37.0 63.0 100.0 37.0 63.0 100.0 37.0 100.0

This above Table 4.7 suggests that most of the customers are affected by procurement management process in the organization. The frequency level over 4.0 is the satisfied level and it shows that all the people (100) are affected by the procurement management process that directly influences their individual satisfaction levels.

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Table 4.8 CUSTOMER SATISFACTION N Valid Missing Mean Mode Std. Deviation Skewness Kurtosis Minimum Maximum 4.8767 5.0000 0.1617 -0.547 -1.736 4.670 5.000 100 0

Figure 4.4

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4.3 Inferential Statistical Analysis

Correlation Coefficient Table 4.9 The correlation matrix is shown below with the values of all the variables. TABLE 4.9 Correlation Matrix IA IA SS PD CS N = 100 0.844** 0.919** -0.754** 0.806** -0.919** -0.773** SS 0.844** PD 0.919** 0.806** CS -0.754** -0.919** -0.773**

The correlation variables have been explained under Correlation Matrix. The above table shows that CS has a negative correlation (-0.754**) with IA indicating that if authorization delays increase the customer satisfaction will be decreased. The significance level remains at 0.01 levels. Likewise, the relationship of CS and SS, PD also significantly and negatively connected at 0.01 levels.

Testing of Hypothesis In this study, the researcher introduced 3 hypotheses. The Bivariate correlations of all the hypotheses at 0.01 levels of significance are shown as follows.

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Table 4.8 Correlations


INTERNAL AUTHORIZATION DELAYS INTERNAL AUTHORIZATIO N DELAYS Pearson Correlation Sig. (2-tailed) N SUPPLIER SELECTION Pearson Correlation Sig. (2-tailed) N PAYMENT DELAYS Pearson Correlation Sig. (2-tailed) N CUSTOMER SATISFATION Pearson Correlation Sig. (2-tailed) N SUPPLIER SELECTION PAYMENT DELAYS CUSTOMER SATISFATION

0.844** .000

0.919** .000 100 0.806** .000

-0.754** .000 100 -0.919** .000 100 -0.773** .000

100 0.844** .000 100 0.919** .000 100 -0.754** .000 100

100 1

100 0.806** .000 100 -0.919** .000 100

100 1

100 -0.773** .000 100

100 1

100

**. Correlation is significant at the 0.01 level (2-tailed).

The first, second and third hypothesis and the null hypothesis are as follows. H1 There is a negative co-relation exists between internal authorization time and

customer satisfaction. H01 There is a positive co-relation exists between internal authorization time and customer

satisfaction. H2 There is a negative co-relation exists between supplier selection of goods and

customer satisfaction.

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H02

There is a positive co-relation exists between supplier selection of goods and

customer satisfaction.

H3

There is a negative co-relation exists between supplier payment delays and customer

satisfaction. H03 There is a positive co-relation exists between supplier payment delays and customer

satisfaction.

Regression Analysis Table 4.9 Model Summaryb Model R


a

R Square

Adjusted R Square

Std. Error of the Estimate

0.754

0.568

0.564

0.106

a. Predictors: (Constant), INTERNAL AUTHORIZATION DELAYS b. Dependent Variable: CUSTOMER SATISFATION

Table 4.10 Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig.

B 1 (Constant) INTERNAL AUTHORIZATION DELAYS 7.808 -0.720

Std. Error 0.258 0.063

Beta 30.238 -0.754 -11.361 7.54e-201 *** 6.55e-030 ***

a. Dependent Variable: CUSTOMER SATISFACTION

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Regression Equation CS = 7.808 0.720IA

As per the equation above, it takes a negative value to say that when an authorization delay occurs inside the organization, the customer satisfaction gets increased. The P value of the same is 6.55e-030 *** and that is below the rejection level of 0.01. Therefore, H1 is accepted and H01 is rejected with 0.01 level of significance. Therefore, it can be assumed that there is a positive correlation exists between authorization delays and customer satisfaction.

Figure 4.4

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Table 4.11 Model Summaryb Model R R Square Adjusted R Square 1 0.919a 0.844 0.842 Std. Error of the Estimate 0.064

a. Predictors: (Constant), SUPPLIER SELECTION b. Dependent Variable: CUSTOMER SATISFACTION

Table 4.12 Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig.

B 1 (Constant) SUPPLIER SELECTION 8.835 -0.964

Std. Error 0.172 0.042

Beta 51.323 -0.919 -23.011 0.0000 ***

3.61e-117 ***

a. Dependent Variable: CUSTOMER SATISFACTION

Regression Equation CS = 8.835 - 0.964SS

As per the equation above, it takes a negative value to say that when a supplier selection problem occurs inside the organization, the customer satisfaction gets decreased. The P value of the same is 3.61e-117 *** and that is below the rejection level of 0.01. Therefore, H2 is accepted and H02 is rejected with 0.01 level of significance. Therefore, it can be assumed that there is a negative correlation exists between supplier selection and customer satisfaction.

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Figure 4.5

Table 4.13 Model Summaryb Model R 0.773a R Square Adjusted R Square 1 0.598 0.594 Std. Error of the Estimate 0.103

a. Predictors: (Constant), PAYMENTDELAYS b. Dependent Variable: CUSTOMERSATISFACTION

Table 4.14 Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig.

B 1 (Constant) PAYMENT DELAYS 7.834 -0.728

Std. Error 0.245 0.060

Beta 31.960 -0.773 -12.075 3.95e-224 *** 1.44e-033 ***

a. Dependent Variable: CUSTOMER SATISFACTION


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Figure 4.6

Table 4.15 The summary of the hypothesis testing is as follows. Hypothesis H1 There is a negative co-relation exists between internal authorization time and customer satisfaction H2 There is a negative co-relation exists between supplier selection of goods and customer satisfaction H3 There is a negative co-relation exists between supplier payment delays and customer satisfaction 1.44e-033 *** Accepted 3.61e-117 *** Accepted P Value 6.55e-030 *** Remarks Accepted

As per the above analysis, all hypotheses have been accepted based on the level of 0.01** significance.

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4.4 Chapter Summary


This chapter was initiated by analyzing the samples which were under consideration. The demographics of the data samples, distribution of questionnaire and the final response were presented in a table and a graphical format. The responses obtained for each variable was then illustrated. The composition of the respondents was then briefly introduced. A detailed illustration of responses according to the different variables was given, with supporting statistical analysis.

The descriptive analysis of Customer Satisfaction, Internal Delays for Authorizations, Supplier Selection and Payment Delays was elaborated through a frequency tables and a histograms. Then by using SPSS as a statistical tool the analysis of Customer Satisfaction, Internal Delays for Authorizations, Supplier Selection and Payment Delays was done by using factor, cluster and chi-squire methods. The above three methods were broadly described by using tables and charts having comparisons with each factors and clusters.

Finally all findings were presented in a summarized format and the hypothesis testing also has been carried out in a structural manner.

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CHAPTER V
CONCLUSION & RECOMMONDATIONS

There were insufficient resources; practical situation is good to study the research question. However, practical situation has its disadvantages, no matter how research survey is conducted, it will not give the research respondent 100 percent real-life experience, and therefore it would lead to discriminatory outcome. So, it is suggested to carry out some personal interviews in addition to the survey, in this way the conclusion would be more trustworthy.

As a result of the time constraints, although the sample size was enough to illustrate conclusion from it, it is always preferred to have larger sample size. Larger sample size will produce more precise calculations. Furthermore, using stratified sample instead of convenient sample will also contribute to more accurate results.

Finally, as this study has uncovered the generalizability limitation, it is suggested that future research examine the relationship between task and relationship conflicts on individual performance outcome on other industries, which would increase the outside authority this study require.

Amaya Hills Hotel performance and providing customer satisfaction depends on the employees performance. It is given questionnaires to 100 people hotel employees. From this sample all 100 useful surveys are returned which indicates the relationship between customer satisfaction and respective variables. The result of the surveys shows that one is a positive &two negative relationships between dependent variable and independent variable

This study measure impacting the procurement functions to the customer satisfaction, then evaluating dependency of customer satisfaction on three variables, which are Internal delays authorizations, Supplier Selection conflicts, Payment delays, Basically these three effecting on the whole hotel procurement functions

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Supplier selection and customer satisfaction have a positive relationship for the convenience of measuring choose moderate variable which is performances level in the operation. Performance of the hotel depends on the purely employees performance because they provide the more services. So if the staffs performance will be high then the performance of operation will be also high. If improving the capacity of the staff they have to be provided whose requirements on time, including right quality with affordable price. In order to achieve all these things it should be maintained better supplier selection

According to this research findings are founded below mentioned findings for each stated variable Supplier Selection 1. At the beginning think about the product cost before the quality. it can be created a vulnerable situation for the operation flow 2. There is no procedure for analyzing of past performances of suppliers &make assumption. 3. Lack of connectivity between suppliers & persons who is engaging with operation

.Internal Delays of Authorizations

Internal delays authorizations and customer satisfaction have a negative relationship if authorization process getting late total operation gets collapsed since scarcity of stocks, bad results effecting by using the side remedies, that means delays of authorization getting high customer satisfaction get decreased Therefore it can be stated below points as findings for creating authorization delays There is no purchasing power of individual depends on their position in the hierarchy of the organization, therefore when coming the any capital item purchasing form it comes until the managing directors approval then it takes time to complete the job, ultimately it will effect to the operational performance. If it has above stated procedure it can be given authority powers according to the hierarchy

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Lack of knowledge understanding between procurement department & operation department according to the needs of operation. There is no process of identification of needs before requirement is urgent

Hotel still using paper authorization system therefore it takes time to send the approval hotel to head office Colombo & back to the hotel

Payment Delays There is negative relationship between customer satisfaction, when suppliers payments are getting delay automatically supplier deliveries and supplying getting delay therefore operational flow become problematic situation. According to the research there are few points I have found for influencing on payment delays There is no proper procedure of checques issuing from convenient place to the suppliers when giving any kind of payment it has to be issued by hotel company procedures but it would get much time to pass the payment to the supplier When checque is ready there should be seven signatures included out of these signatures three signatures from the hotel & four signatures from head office, if getting delay one place total procedure getting delay There is no signature powers at the some certain extend position in the hierarchy of the organization

These mistakes I have founded the procurement process when I was engaging this programmed therefore according to me there are few recommendations with relevant to the each variable

Suggestion for Reducing Authorization Delays o Giving the purchasing power of individual depends on their position in the hierarchy of the organization,

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o When requirement coming to the operation department having access to direct contact with relevant person in the hierarchy. it can be minimize time identify of the need by relevant person o Creating a good relationship between procurement department & operation department according to the needs of operation. it can be managed the conflict of procurement functions o Using better communication media for data exchanging Hotel (Kandy) to Head office (Colombo) it can be managed the conflict of procurement functions o Using electronically based authorization system for making good for the operational flow

Suggestion for Better Supplier Selection o At first think about the product quality before thinking about the cost. it can be helped to identify the quality o Analyze of past performances of suppliers &make assumption. it can be managed the conflict of procurement functions o Keeping good bargaining power with suppliers. it can be managed fluctuation of prices time to time o Introducing & meeting suppliers & persons who is engaging with operation it can be provided good solution for the correct item selecting o Think & consider the warranty of the relevant item it can be got rid of unavailability in using estimated time period in relevant item

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Suggestion for Reducing Payment Delays o Making a procedure checques issuing from convenient place to the suppliers (Head office or Hotel) it can be good solution payments delay. o It is engaging with flexible way with suppliers of fast moving necessary products. o Adjust rapidly prices of Cigarettes, Alcohol, Gas & Petrol Diesel like monopolistic items. o It has to be flexible if issues arising good receiving amount & purchase requested order amount. o Giving Signature powers some certain extend position in the hierarchy of the organization

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REFERENCES & BIBLIOGRAPHY

Arbnor, I. and Bjerke, B. (1997), Methodology for creating business knowledge, 2. ed., Thousand Oaks, Sage publications Inc. Anderson, M. G. and Katz, P.B. (1998), Strategic Sourcing The International Journal of Logistics Management, Vol. 9 Issue 1, pp. 1-13. Ammer, D.S. (1961), "Purchasing for Profits", Harvard business review, vol. 39 no. 3, pp. 135-143. Ammer, D.S. (1974), Is Your Purchasing Department A Good Buy?, Harvard Business Review, Vol. 52 no 2, pp. 36-157. Ammer, D.S. (1989), "Top Management's View of the Purchasing Function", Journal of Purchasing & Materials Management, vol. 25 no. 1, pp. 16-21. Burrell, G. and Morgan, G. (1979), Sociological Paradigms and Organizational Analysis, London: Heinemann Butter, F. and Linse, K. (2008), Rethinking Procurement in the Era of Globalization, MIT Sloan Management Review, Vol. 50 Issue 1, pp. 76-80. Kocabasoglu, C. and Suresh, N.C. (2006), Strategic Sourcing: An Empirical Investigation of the Concept and Its Practices in U.S. Manufacturing Firms, Journal of Supply Chain Management, Vol. 42 no. 2, pp. 4-16. Kraljic, P. (1983), Purchasing must become supply management, Harvard Business Review, Vol. 61 no. 5, pp. 109-117. Monczka, R. M., Trent, R. J. and Petersen, K.J. (2006), Effective Global Sourcing and Supply for Superior Results Arizona, CAPS Research. Morris, M.H. and Calantone, R.J. (1991), "Redefining the Purchasing Function: An Entrepreneurial Perspective", International Journal of Purchasing & Materials Management, vol. 27 no. 4, pp. 2-9. Ramsay, J. (2001), Purchasings strategic irrelevance, European Journal of Purchasing and Supply Management, Vol. 7 no. 4, pp. 257263.
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Ramsay, J. (2004), Serendipity and the realpolitik of negotiations in supply chains, Supply Chain Management - An International Journal, Vol. 9 no, 34, pp. 219229. Wagner, S. M. and Kaufmann, L. (2004), Overcoming the main barriers in initiating and using purchasing-BSCs, Journal of Purchasing & Supply Management, Vol. 10 no. 6, pp. 269-281. Waldrop, M. M. (1992), Complexity: The Emerging Science at th e Edge of Order and Chaos New York: Simon and Schuster Wilson, D.T. (1987), Merging Adoption Process and Organizational Buying Models Advances in Consumer Research, Vol. 14 no 1, pp. 323-325. Zaltman, G., Duncan, R. and Holbek, J. (1973), Innovations and Organizations New York John Wiley & Sons Zaltman, G. and Bonoma, T.V. (1977), Organizational Buying Behavior: Hypotheses and Directions., Industrial Marketing Management, Vol. 6 no 1, pp. 53-60.

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ANNEXURE

Questionnaire on conflict of procurement functions in the Amaya Hills Hotel This survey is planned to support the appraisal of impact of conflicts on operational performance outcomes in Amaya Hills Hotel. Please note that this has been prepared by Anurudda Wijesooriya. All answers that you provide will only be used for the purpose of making research of B.Sc. in Business Management (Special) Degree. The confidentiality of your information is highly ensured. Use following solution when answering the questions below

HD

Highly Disagree

Disagree

Neither Agree nor Disagree

Agree

HA

Highly Agree

Internal Delays of Authorizations 1. The purchasing power of individual depends on their position in the hierarchy of the organization, it can be managed the conflict of procurement functions HD D N A HA

2. When requirement coming to the operation department having access to direct contact with relevant person in the hierarchy. it can be minimize time identify of the need by relevant person HD D N A HA

3. Lack of understanding between procurement department & operation department according to the needs of operation. it can be managed the conflict of procurement functions HD D N A HA

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4. Not using better communication media for data exchanging Hotel (Kandy) to Head office (Colombo) it can be managed the conflict of procurement functions HD D N A HA

5. Using electronically based authorization system instead paper authorization system it can be managed the conflict of procurement functions HD D N A HA

Supplier Selection

4. At first think about the product quality before thinking about the cost. it can be helped to identify the quality HD D N A HA

5. Analyze of past performances of suppliers &make assumption. it can be managed the conflict of procurement functions HD D N A HA

6. Think & consider the warranty of the relevant item it can be got rid of unavailability in using estimated time period in relevant item HD D N A HA

7. Keeping good bargaining power with suppliers. it can be managed fluctuation of prices time to time HD D N A HA

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8. Introducing & meeting suppliers & persons who is engaging with operation it can be provided good solution for the correct item selecting HD D N A HA

Payment Delays 1. Making a procedure checques issuing from convenient place to the suppliers (Head office or Hotel) it can be good solution payments delay. HD D N A HA

2. It is engaging with flexible way with suppliers of fast moving necessary products. HD DD N A HA

3. Adjust rapidly prices of Cigarettes, Alcohol, Gas & Petrol Diesel like monopolistic items. HD D N A HA

4. It has to be flexible if issues arising good receiving amount & purchase requested order amount. HD D N A HA

5. Giving Signature powers some certain extend position in the hierarchy of the organization HD D N A HA

Customer Satisfaction

1. When internal delays of authorization occur it is likely to reduce customer satisfaction by a considerable level. HD D N A HA

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2. Supplier selection conflicts always end up in loosing valuable customers to the organization. HD D N A HA

3. Payment delays are not favorable to any organization who strives to increase performance and customer satisfaction. HD D N A HA

Thank you very much for your participation!

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