EFFECTS OF PROCUREMENT PRACTICES ON

ORGANIZATIONAL PERFORMANCE WITH IN THE

PUBLIC SECTOR
MOGADISHO-SOMALIA

BY
MUNIRA ADAM SHEIKH
HAFSA YUSUF AHMED

A GRADUATION PROJECT SUBMITTED IN PARTIAL

FULFILLMENTS OF THE REQUIREMENTS FOR THE
DEGREE IN BACHELOR OF PROCURMENT AND
LOGISTICS

FACULTY OF MANAGEMENT AND SCIENCE

SIMAD UNIVERSITY

JUNE,202
 TABLE OF CONTENTS

CHAPTER ONE……………………………………………
INTRODUCTION OF THE STUDY…………………………………

1.0 INTRODUCTION………………………………………………..

1.1 BACKGROUND OF THE STUDY…………………………………………

1.2 STATEMENT OF THE PROBLEM………………………………….

1.3 OBJECTIVE OF THE STUDY……………………………

1.3.1 GENERAL OBJECTIVES…………………………… .

1.3.2 SPECIFIC OBJECTIVE ………………………………

1.4 RESEARCH QUESTION…………………………………..

1.5 SCOPE OF THE STUDY…………………………………..

1.6 SIGNIFICANT OF THE STUDY………………………..

1.6.1 GOVERNMENT OF SOMALIA…………………..

1.6.2 MANUFACTURING SECTOR………………….

1.6.3 THE RESEARCHERS/ACADEMICIANS……………………………

1.7 CHAPTER SUMMRY…………………………………………………………

CHAPTER TWO…………………………………………………………………….

LITERATURE REVIEW………………………………………………………..

2.0 INTRODUCTION…………………………………………………….

2.1 THEORETICAL REVIEW…………………………………………..

2.1.1 BALANCE SCORE CARD THEORY…………………………

2.1.2 RESOURCE BASED THEORY…………………………………..

2.2 CRITICAL REVIEW…………………………………………………

2.3 CONCEPTUAL FRAMEWORK………………………………………

 2.4 CHAPTER SUMMARY……………………………………………..

CHAPTER THREE………………………………….

RESEARCH DESING AND PROCEDURE…………………………..

3.0 INTRODUCTION………………………………….

3.1 RESEARCH DESING……………………………….

3.2 RESEARCH POPULATION………………………………….

3.3 SAMPLING DESIGN PROCEDURE……………………………………

3.4 DATA COLLECTION AND PROCEDURE……………………………

3.5 VALIDITY AND RELIABILITY…………………………………………..

3.6 DATA ANALYSIS AND PRESENTATION…………………………………….

3.7 LIMITATION OF THE STUDY……………………………………………….

 CHAPTER ONE
INTRODUCTION OF THE STUDY
1.0Introduction
The Somalia Institute of Supplies Management and the Chartered Institute of Purchasing and
Supply are two procurement-related bodies that have sprung up as a result of the industry's
growth. There has been more pressure to align procurement procedures and goals with the
organization's objectives. Procurement practices have become critical to a company's success
because the supply chain is directly linked to overall company performance. Procurement
practices have a positive impact on an organization's financial performance, and procurement
and supplier involvement are critical to the success of a new product. Because most businesses
spend a significant portion of their revenue on procurement, Carr and Pearson argue that
strategic procurement practices are critical (2002). Directors and heads of procurement
departments have a big say in how suppliers are evaluated as well as the creation of
specifications to ensure that the organization gets the most bang for its buck.

1.1Background of the Study

The operating models and marketing strategies of public sector organizations are undergoing
significant changes. Procurement has a significant impact on how an organization achieves its
goals. Purchasing adds value to the organization, according to Leenders et al (2008).
Procurement practices can be improved in order to contribute even more to organizational
performance. Organizations have a tendency to choose procurement procedures that are
familiar to them; instead, they should choose the ones that are best suited and beneficial to
their success. According to Narasimhan and Kim (2002), there has been an increase in the
pressure for purchasing integration. Gattorna (2006) defined purchasing integration as the link
between purchasing practices and organizational performance.The direct link of operational
efficiency and supply chain to

organizational performance therefore means that the adoption of procurement practices is

crucial to organizational success. Consolidation of the entire procurement process leading to
the implementation of procurement practices such as, green purchasing, just in time delivery

(JIT), total quality management (TQM) and e-procurement is necessary so as to boost the
overall organizational performance. Streamlined procurement systems lead to efficiency and
increases the confidence of employees, customers and stakeholders of the organization.
Shifting away from traditional purchasing and moving into modern and more efficient
procurement practices leads to continuous improvement and benchmarking. This is where an
organization measures itself against the leading organizations in its class. Procurement is no
longer a process but a strategic functionIt saves the company money by lowering costs.
Organizations should always compare themselves to the "best in class" and strive to improve
their processes on a continuous basis (Guth, 2010). Commitment to green purchasing,
commitment to just-in-time delivery, commitment to total quality management, and e-
procurement are just a few of the procurement practices that organizations can adopt.
Organizations must shift their focus away from the predictable company-oriented view and
toward a dual company-customer perspective. Procurement should be heavily involved in the
development and implementation of Sustainable Procurement Policies, with a particular focus
on how environmental issues and issues relating to other aspects of society and economy can
be integrated into procurement process activities (Hsu & Hu, 2008). It is important to take into
account a wide range of performance indicators.When it comes to defining organizational
performance, this is crucial. Quality, efficiency, productivity, profitability, and sustainability
should all be considered when evaluating an organization's performance. Procurement should
be considered as part of an organization's overall strategy. Procurement should be involved in
budgeting, supplier selection and consolidation, environmental concerns, and issues involving
quality and technological advancements. Stakeholders are increasingly requesting that
businesses address and manage the environmental and social issues that affect them (Carter,
2011). Procurement managers are in the best position because, through performance
evaluation and supplier selection, they can have a positive or negative impact on social
performance and the environment. East African Portland Cement Company Limited contributes
sigAs a result, the government should provide incentives for them to work in more pleasant and
profitable environments. These may include the provision of low-cost raw materials for their
manufacturing sector and the advancement of long-term working capital at subsidized interest
rates.nificantly to Somalia's economy by producing cement.a large number of citizens can find
workEast African Portland Cement Company Limited, also known as EAPCC, is a Somalian
cement manufacturer. It focuses on the production and sale of cement as well as other cement-
related products. It is based in Athi River, Machakos County, and was founded in 1933 by Blue
Circle Industries. EAPCC began by trading with other companies.Blue Circle Industries is a
company that imports cement from England. EAPCC was founded in the Republic of Somalia in
1933, and it also has a branch in Uganda. EAPCC's first location, in Mogadisho's Industrial Area,
produced 60,000 tonnes at the time. Its Athi River headquarters were built in 1956 and
commissioned two years later in 1958. Production had doubled to 120,000 tonnes per year by
1958. The company currently has a budget of 1.3 million tonnes per year and produces one
million tonnes per year. The company has built a four-megawatt power plant that uses gases
that would otherwise be wasted. This power plant saves the company 300 million Somalian
shillings per year.(Aceh, 2019)

1.2 Statement of the Problem

The purchasing department of a company is under constant pressure to save money by
delivering services in a more efficient and coordinated manner. In the procurement process,
organizations are becoming more professional and efficient. Procurement practices, according
to Hassanzadeh and Jafarian (2010), are strategic and are intended to increase an organization's
productivity, identify better sources of supply, and lower raw material prices and costs.
Procurement practices improve information and material flows, and they are viewed as
strategic functions that work to increase the profitability of the organization.

identify better sources of supply and reduce raw material prices and costs. Environmental
pollution has led procurement to further realign its functions so that it can be able to conserve
the minimal resources available. Green procurement’s idea is to minimize or completely
eliminate unsafe discharges and excesses across the supply chain, Hervani, Helms, and Sarkis,
(2005). East African Portland Cement Company Limited should embrace the use of procurement
practices such as electronic procurement and the employment of professionals as they focus on
achieving competitive advantage. Organizational performance is improved when Information
Technology is implemented in procurement. Factors that may hinder this implementation may
include; employee resistance to change, failure by top management to allocate the required
resources and lack of finances. The business environment is changing at a very high rate
because of technological advances and procurement managers have to go along with the pace
and ensure that all manner of procurement is environmentally friendly. EAPCC faces challenges
that include, the high cost of electricity, raw materials that are being depleted day by day and
the environmental issues caused by the mining of raw materials. The key polluting substances
are dust and carbon dusts. Madhavaram and Hunt (2008), high degree of procurement best
practices leads to cost reductions, better material flow, improved inventory, financial
performance, better customer service and new product development. EAPCC has integrated
cement production with biodiversity enhancement. They believe in the need to bring back
nature to what they have removed, so as to strike a mutual balance between nature and
development. EAPCC has initiated greening programs which are aimed at rehabilitating the
mined out quarries and establishing green zones to act as buffers for dust trapping and carbon
sinks for gaseous emissions.(Aceh, 2019)

1.3Objectives of the Study

1.3.1 General Objective

The main objective of the study was to establish the effects of procurement
practices on organizational performance within the public sector.

1.3.2 Specific Objectives

The specific objectives of the study were:

1. To establish how supplier selection procedures affect organizational performance within

the public sector in Somalia.
2. To analyze the effects of buyer-supplier relationships on organizational performance
within the public sector in Somalia.
3. To evaluate the role of e-procurement on organizational performance within the public
sector in Somalia.
4. To establish the effects of green purchasing on organizational performance within the
public sector in Somalia.
5. To investigate the effects of total quality management on the performance of public
organizations in Somalia.

1.4 Research Questions

This research was aimed at giving solutions to the following questions:

1. How do buyer-supplier relationships affect the operation of government-owned

businesses in Somalia?
2. How do supplier selection procedures in Somalia's public sector effect organizational
performance?
3. How e-procurement improves the overall performance of Somalia's publicly held firms?
4. How does green purchasing affect the performance of Somalian government-owned
businesses?
5. How overall quality management improves the organizational performance of Somali
government-owned businesses of a publicly traded company.

1.5Scope of the Study

The study was conducted at the Machakos County headquarters of the East African Portland
Cement Company Limited. East African Portland Cement Company Limited procurement and
finance workers were the focus of this investigation. The investigation began in Junuary 2022
and was completed in May 2022.

1.6Significance of the Study

The research examined the effects of procurement practices on organizational performance,
and how management formulated strategies that enhanced efficient procurement practices.

1.6.1 The Government of Somali

The government as a shareholder benefits in terms of increased organizational performance.
The results and proposals of the research will create value in the organization’s products and
services and the procurement departments will gain insight on how to identify hindrances and
loop holes to the achievement of their objectives.

1.6.2 The Manufacturing Sector

End users will benefit from the increased consistency as well as the variety of products and
services available to meet their needs. Procurement fraud will also be easier to detect.

1.6.3 The Researchers/Academicians

The findings of the study will be used to implement positive procurement reforms in the public
sector, as well as to streamline the acquisition of raw materials. This research will also aid
academic researchers in conducting additional research on how to improve organizational
performance through better procurement efficiency and effectiveness.

1.7 Chapter Summary

This research will help manufacturing businesses enhance their profitability and production by
utilizing procurement strategies. Better services, a wider range of products, and more
consistent operations will also benefit customers. The research will help researchers better
understand procurement practices and how they affect work performance, innovation,
environmental performance, efficiency, and quality in the manufacturing business.

Better creation of effective solutions to address procurement failures and inefficiencies will
assist top management as well.

CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter will go through the Balanced Score Card and Resource Based Theories. The impact
of procurement practices on organizational performance is discussed in this chapter. The study
looks at how information technology influences procurement network control mechanisms and
how that affects organizational performance.
2.1Theoretical Review

2.1.1 Balanced Score Card Theory

The balanced score card was created by Kaplan and Norton (1992) to reduce reliance on
obsolete accounting procedures. To boost efficiency, organizations should incorporate non-
financial measures. The balanced score card divides an organization's mission into precise,
measurable goals. The Balanced Score Card is a comprehensive strategy of evaluating an
organization's performance in order to ensure predictability and the right activities are done to
create the desired future (Kaplan & Norton, 1992).

This research looks at operational expenses, customer satisfaction and retention, and
procurement cost analyses. Through learning and growth analysis, it will also track staff
happiness, retention, and information system performance. The implementation of
procurement best practices requires financial, end-client, and in-house process support, as well
as top-level management assistance. Performance management with the Balanced Score Card

When planning cost reduction, ensure that the reduction will have a positive effect on finances, end
clients, internal processes and company’s growth. Focus should not only be on Key Performance
Indicators (KPIs), but also on other parts of the business. Only 30% of KPIs are financial the remainders
will focus on end clients, internal processes and the company’s growth.

The Balanced Score Card process should be measured and it must meet the organizations final goal.
KPIs should follow strategy. KPIs ensure strategies follow the right track in line with the company’s
strategy. Cost control plans will be more reasonable and clearly understandable if they are linked to the
company’s strategy and controlled with result-oriented KPIs.

Balanced Score Card best practices for procurement

When cutting costs, be sure that the savings will benefit the company's finances, end clients,
internal operations, and growth. Not only should Key Performance Indicators (KPIs) be
prioritized, but so should other aspects of the business. Only 30% of KPIs will be financial, with
the rest focusing on end clients, internal procedures, and corporate growth.

The Balanced Score Card method should be evaluated and ensure that the organization's
overall goal is met. KPIs should be aligned with strategy. KPIs guarantee that strategies are on
track and aligned with the company's goals. If cost management plans are linked to the
company's strategy and monitored using result-oriented KPIs, they will be more logical and
understandable.est practices for procurementProcurement practices should be uncommon and
difficult to imitate, for example sourcing processes.
 Both operational and organizational functioning are incorporated in Resource Based View.
Organizations that purchase internationally, function well at the business level. Uncommon
resources keep away the competition and enable organizations achieve higher profits.

ERP systems are expensive to install and not all companies have embraced their use, this
means that companies that have already installed it are a step ahead of the competition.
Effective Collaboration contributes to sourcing performance by capturing additional value for
end users through effective collaboration with suppliers and supplier involvement in the
development of product specifications. Sourcing positively impacts procurement by enabling
better performance. This is achieved by casting the net wide enough so as to achieve the best
possible deal. As products mature and value shifts innovation takes place.

2.1.2 Resource Based Theory

Resource-based theory discovers and analyzes a company's strategic advantages, which can
lead to a competitive edge. These competitive advantages might be organizational, human, or
financial in nature, and they are bestowed on the basis of their rarity, distinctiveness, and
value.

According to Resource Based Theory, an organization's competitive advantage is determined

by the effective planning and operation of procurement. Two assumptions are stated by Peteraf
and Barney (2003) in studying competitive advantage using this theory: one, enterprises within
the same industry may have various resources, and the other, this dissimilarity in resources
may persist for a long time.

When a resource is unique, it becomes a competitive advantage. There would be no

competitive advantage available if all organizations in an industry had the same resources as
Cool et al (2002). Resource efficiency allows procurement to accomplish more with less
resources. According to Barney (1991), resources help businesses increase efficiency and cut
expenses.

Procurement procedures, such as sourcing processes, should be rare and difficult to duplicate.
Resource Based View considers both operational and organizational functions. On a business
level, organizations that acquire overseas perform well. Uncommon resources keep
competitors at bay and allow businesses to make more money.

ERP systems are costly to implement, and not all businesses have embraced its use, therefore
businesses who have already done so are ahead of the competition. Effective collaboration
improves sourcing performance by capturing additional value for end users through effective
cooperation with suppliers and supplier participation in product specification
development.Procurement benefits from sourcing because it improves performance. This is
accomplished by casting a wide enough net in order to obtain the greatest potential offer.
Innovation occurs as items develop and their value alters.

Procurement practices should be uncommon and difficult to imitate, for example sourcing processes.
Both operational and organizational functioning are incorporated in Resource Based View. Organizations
that purchase internationally, function well at the business level. Uncommon resources keep away the
competition and enable organizations achieve higher profits. ERP systems are expensive to install and
not all companies have embraced their use, this means that companies that have already installed it are
a step ahead of the competition. Effective Collaboration contributes to sourcing performance by
capturing additional value for end users through effective collaboration with suppliers and supplier
involvement in the development of product specifications. Sourcing positively impacts procurement by
enabling better performance. This is achieved by casting the net wide enough so as to achieve the best
possible deal. As products mature and value shifts innovation takes place

2.2Critical review
The benefits of e-procurement stem from the organization's deliberate efforts to promote full
adoption of this technology (Ramayah et al: 2006). To fully realize the benefits brought about
by the implementation of this technology, the firm should invest more in training and skill
upgrading for its employees.

Many of the challenges facing the procurement team's development of skills and knowledge
manifest themselves clearly under cultural factors both externally and internally, according to
Mabert et al. (2003), especially when employees show resistance to using an electronic system
that takes away some of the negotiation power in dealing with regular suppliers and fear of
losing their job as a result of process automation.

According to Nurmilaakso (2008), the supply chain is a bidirectional movement of products,

cash, and communication between buyers and sellers via numerous intra-organizational
functions that are affected directly or indirectly by supply performance.

Through the effective and efficient use of e-processes and network-based communication,
organizations can receive the most favorable support for business functions and
contributions.In circumstances when there is knowledge asymmetry, cordial buyersupplier
relationships in procurement establish confidence and lower transaction costs caused by
interactions (Erridge and Nondi, 1994). Greater engagement with suppliers provides access to
information not generally available within the company, allowing for better specification
decisions, according to Uyarra (2010).

According to Belfit et al., market difference drives organizations to implement sustainable

buying practices (2011). As a result, businesses will seek supply chain methods that will provide
them a competitive advantage.
In this day and age, organizations dread being labeled unethical or having unsustainable
practices; nonetheless, increased media attention and consumer awareness need the
incorporation of sustainability in sourcing decisions. Tom and Jonas (2014). Information
technology software should help to conserve the environment, such as through the use of e-
procurement, which reduces forest damage.

To avoid unnecessary early disposals, computer hardware should be able to support current
software and provide choices for system upgrades. Equipment that is still usable to the
organization is discarded, resulting in waste that can be avoided. According to Nzau and Njeru
(2014), allocating additional resources and equipment to the procurement department
enhances its capabilities and output to companies.While managing the procurement function
well, businesses can save money when servicing contracts. The ability to differentiate between
high-quality and low-quality vendors enhances the overall supply chain and ensures that
suppliers who fail to satisfy contractual requirements are blacklisted and fined.

2.3 Conceptual Framework

Conceptual frameworks are basic structures representing the systematic characteristics of a
system being considered. (Bogdan & Bilken 2003).

The study’s aim was to determine how supplier selection procedures influence the effectiveness of
procurement practices in companies within the public sector and in this case, East African Portland
Cement Company Limited. The study tries to find out whether there is adherence to procurement laws
and regulations such as the Public Procurement and Disposal Act 2005 and Regulations 2006 and if there
is Just In Time delivery of products and services, proper pre-qualification of suppliers, Request for

Quotations and ensuring all suppliers have achieved ISO 14001 certification

Supplier Selection Procedures

The goal of the study was to see how supplier selection procedures affect the effectiveness of
procurement policies in public sector enterprises, namely East African Portland Cement
Company Limited. The study aims to determine whether procurement laws and regulations,
such as the Public Procurement and Disposal Act 2005 and Regulations 2006, are followed, as
well as whether products and services are delivered Just In Time, suppliers are properly pre-
qualified, Request for Quotations are issued, and all suppliers have achieved ISO 14001
certification.

This study ascertains to what level buyer-supplier relationships influence procurement practices of
companies within the public sector and specifically East African Portland Cement Company Limited. The
study determines the level of buyer-supplier relationship in terms of cost control, seamless information
sharing, long-term relationships and dependability in terms of service and product delivery.
Buyer – Supplier Relationships
The purpose of this study is to see how much buyer-supplier connections affect procurement
methods in the public sector, specifically at East African Portland Cement Company Limited. In
terms of cost management, smooth information exchange, long-term connections, and
dependability in terms of service and product delivery, the study assesses the level of buyer-
supplier relationship.

Organizational Capacity
This establishes the procurement and finance staff's level of experience and efficiency, as well
as how they contribute to organizational performance through procurement. Their
qualifications will help the function go smoothly. This study examines the use of information
technology tools across the company, with a focus on the finance and procurement
departments.

Ethical practices
The analysis determines the procurement and finance department's level of integrity. The
promotion of procurement to a key duty allows purchasing managers to spend large sums of
money on product and service purchases. (Zentes and Bastian, 2010). As a result, a variety of
moral dilemmas about questionable procurement processes have arisen. The study looks into
the company's proactive measures to prevent unethical behavior in the procurement and
finance areas. Good ethical procedures not only improve an organization's integrity and
reputation, but they also foster mutually beneficial partnerships based on fairness and trust.

Procurement Practices
Procurement practices attempt to ensure that companies receive the most bang for their buck
when it comes to spending. This entails the company achieving its strategic goals by efficiently
procuring the essential goods and services from the appropriate providers. Green purchasing is
measured using variables like as timeliness, user integration, and process efficiency.
Procurement strategies help organizations save money in the long run, but organizations that
buy things without a strategy wind up paying a lot of money. In the long run, money spent to
improve service levels enhances market share and corporate performance. Cost reductions are
realized through the purchase of high-quality goods and services, economies of scale, and the
decrease of inventory. Procurement using information technology speeds up the
process.fulfillment and strengthens the buyer-supplier relationship Procurement techniques
minimize resource allocation, increase profitability, and improve quality.

Green Purchasing
This entails acquiring things that help to improve environmental conservation. Companies that
implement superior environmental practices make more money than those who do not.
Environmental practices boost a company's earnings. Reinhardt Reinhardt Reinhardt Reinhardt
Reinhardt (1999).

Reduced environmental risk, increased market share, improved reputation, and overall cost
efficiency are all tangible benefits of green purchasing. This can be accomplished through
eliminating waste and surplus production generated by suppliers, with the savings being passed
on to end users in the form of lower costs. Suppliers can achieve this by using greener
technology to separate themselves from the competition.Customers, employees, stakeholders,
and investors value suppliers who provide environmentally sustainable products. Easy
compliance with environmental rules, reduced chance of accidents, and fewer health and safety
costs are just a few of the advantages.

Engaging in market differentiation encourages companies to adopt sustainable procurement strategies,

Belfit et al. (2011). Organizations will therefore want to use supply chain strategies that will enable them
gain competitive advantage. Organizations in this day and age fear being categorized as unethical or
having unsustainable strategies, strong media attention and growing awareness among consumers
requires inclusion of sustainability in sourcing decisions, Jonas and Tom (2014). Information technology
software should contribute to environmental conservation, such as the use of e-procurement which
promotes less destruction of forests. Computer hardware should be able to support up to date software
and have options for system upgrades so as to avoid unnecessary early disposals.

Throwing off equipment that is still useful to the organization builds up waste that can be avoided. Nzau
and Njeru (2014), states that allocation of more resources and equipment to procurement department
positively improves on its capabilities and the output it provides to organizations. Productively managing
the procurement function enables organizations realize cost savings when servicing contracts. Being
able to distinguish between quality and low quality vendors improves the overall supply chain and
ensures that suppliers who don’t meet their contractual obligations are blacklisted and penalized.

Supplier Partnering
This is the relationship that exists between businesses and their suppliers, and it helps
businesses gain long-term strategic and operational benefits. This is a long-term collaboration
that facilitates problem-solving and joint planning among the parties involved. Increased
reliance on suppliers brings consequences, such as delayed deliveries and lower-quality items.

Strategic supplier alliances bring value to a firm whose primary goal is to meet customer needs.
Collaborations between buyers and suppliers ensure that products are supplied just when they
are needed, lowering storage and security expenses.
The ability of a business to engage suppliers and other partners in mutually beneficial activities
is one of the benefits of collaborative relationships. Chin-Chun is a Chinese character (2008).
Sharing information with suppliers improves quality, reduces costs, and speeds up delivery
times. Janda and colleagues (2002). Any improvements from the supplier should adhere to the
organization's specifications. Brown and colleagues (2001).

Adoption of Information Communication Technology

Information technology-enabled procurement processes can reduce the time it takes to share
and process data. The use of information technology in procurement allows for the
synchronization of internal and external business activities. Electronic ordering, an online
catalog, and online payment are just a few examples.

Improved productivity and shorter response times boost organizational performance. Real-
time communications allow for quicker transactions and time savings. When opposed to
manual requisitions, electronic procurement provides for faster ordering and approval of all
transactions (Lewis and Roehrich, 2009). In any industry, information and communication
technology (ICT) is one of the most powerful forces for change.

This is owing to rapid technological advancements as well as increased customer

demands.Customers' demands that their suppliers link their systems as a condition of doing
business, reduced transaction costs, improved customer service quality, and defensive reaction
to competitor's adoption are all factors that influence willingness to use ICT. Thong (1999).
According to Davilla et al., the cost of investing in suitable systems, the unwillingness to have an
open approach to tendering, and the cost of educating staff may all be barriers to e-
procurement adoption (2003).

Because they lack the requisite skills and training to operate the new system, suppliers with old
systems will have difficulty adjusting to the new system. Employees who are accustomed to
direct communication may struggle to adapt to the new indirect method, which is replacing
paper work using online communication The nature of the partnership is also important, as the
new ICT system will keep openness at the forefront(Triyanto et al., 2017).

Purchasing Ethics
The purchasing process must be conducted ethically and fairly to all parties involved. It should
be mandatory to follow all regulations and norms. Professional procurement personnel will go a
long way toward ensuring that ethical standards are met.

The implementation of ethics in purchasing is hampered by a lack of professionalism, such as

poor record keeping and insufficient control mechanisms. Purchasers should be informed of the
company's ethical stance through purchasing policies, and urged to act ethically when
presented with a purchase issue through incentives and disincentives. In these cases, these will
have a significant impact on buyer perceptions and promote professionalism.

Gift giving is a widespread occurrence in Somalia, making it difficult to distinguish between a

bribe and a gift. Unethical behavior can be exacerbated by a lack of clear ethical rules, as well as
a lack of top management backing, inadequate resources, and the political context.

When there is a strong internal culture paired with training, as well as pressure from
stakeholders, managers are more likely to integrate ethics into decision making. When giving or
receiving gifts, especially when using corporate resources for non-business related activities,
managers should prevent conflicts of interest.

Organizational Performance
This is determined by how well an organization achieves its goals, which may include increasing
productivity and reducing inventory in the short term and increasing market share over time.
According to Barney, procurement performance is linked to resources with naturally varying
levels of efficiency that enable firms to provide better service to their customers at a given cost
or provide the same benefit at a lower cost (2003). The performance of the organization is
compared to that of other companies in the same industry. Return on investment and market

share growth are two indicators of organizational performance. Specifications and procurement
are inextricably linked. The purchasing department faces numerous pitfalls and obstacles as a
result of poor specifications.

The minimum basic requirements for quality should be included in quality specifications the
consumer, a transparent procurement process, the evaluation of goods to ensure that they
meet minimum standards, and a fair award at the lowest possible price Edvardsson is an
Icelandic writer (1998). Identifying the end user's minimum basic requirements allows for a
transparent procurement process and assessment to ensure that specifications are met at the
lowest possible total cost.(Aceh, 2019)

Better supply chain management and professionalization of the procurement function within
organizations result in procurement cost savings. Procurement activities help organizations
anticipate needs, source and monitor supplies, and improve overall performance. Procurement
practices that meet the end user's needs and provide value with the resources available are
successful.

Manpower with effective management skills who follow ethical purchasing procedures and
guidelines will ensure successful quality and service delivery to all stakeholders; to accomplish
this, clear objectives must be established and the highest quality standards must be
maintained. Proper procurement department staff qualifications aid in the drafting of correct
specifications, ensuring that the organization receives higher-quality products. , Gillingham and
Lysons (2003).

2.4 Chapter Summary

Procurement practices are strategic functions that work to improve the organization’s
profitability, pinpoint better suppliers and save on raw material costs. Implementation of lean
procurement among small and medium sized enterprises also improves organizational
performance. Establishing the relationship between organizational performance and
procurement best practice can be measured through customer satisfaction, efficiency and
effectiveness, quality, profitability and market share. Customer demands in the supply chain are
increasingly becoming more complicated. Procurement must be proactive to adapt to these
changes and seize future opportunities before the competition a lean purchasing process must
be developed to stay ahead of the competition.

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.0 Introduction
This research adopts a survey design to collect descriptive data from a sample selected from the larger
population. This study is facilitated by the use of primary data from both structured and unstructured
questionnaires. Secondary data is collected from annual reports and journals. Data was collected,
interviews performed and presentations done.

3.1 Research Design

This study relied on descriptive research. A descriptive study is one that attempts to collect data
from a population in order to determine the respondents' current status in relation to the
variables, according to Mugenda and Mugenda (2003). A design study is the result of a series of
decisions made by a researcher about how the research was conducted. The effects of
procurement practices on organizational performance are examined in this study.

3.2 Research Population

This is the exact population for which data is required, in this case employees from the East
African Portland Cement Company Limited's Supply Chain Department; Procurement section,
Operations Planning and Logistics, Stores, Weighbridge, and Finance Department; Corporate
Performance (regulates purchases against budget) and Payables section (pays suppliers).

Table 3. 1Research Population

Category TARGET Population Percentage

Procurement officers 15 13
Operations Planning and 13 12
Logistics
Stores 59 53
Weighbridge 11 10
Corporate performance 3 3
Payables section 10 9
TOTAL 111 100
Source: Author (2022)

3.2.1 Sample Size

The study population was involve 86 respondents where 28 are Supply Chain Department and
58 are Finance Department.

The study was involve a total of 86 respondents from workers as illustrated in the following
table. This sample size was gotten by the use of the Sloven’s formula.

N = N ÷ 1+(Ne)2

Where n is the sample size

N is the sample population e 2 is the level of significance (0.052 )2

Therefore, n =111/ 1 +203(0.052

N= 86 employees

3.2 Sampling Design and Procedure

The sample will be chosen using a stratified random sampling technique. This is a calculated
estimate. This is a probability-based sampling technique in which the entire population is
divided into subsections, and the final topics are uniformly selected from unlike sections in an
unsystematic manner. According to Kothari (2004), samples of about 10% can provide useful
reliability. The sample size was more than 50% of the total population, which was more than
enough for the study. This method has a high level of statistical accuracy, which saves time and
money. Regardless of the differences in population size between divisions, this technique uses
the same sampling proportion for each division.

Table 3. 2 Sampling Design

Category Research Sample size Percentage

Population
Procurement officers 15 8 53
Operations Planning and Logistics 13 7 54
Stores 59 30 51
Weighbridge 11 6 55
Corporate performance 3 30 67
Payables section 10 5 50
TOTAL 111 86 330
Source: Author (2022)

3.3 Data Collection Procedures

Data will be gathered from both primary and secondary sources. Background information,
supplier selection procedures, buyer-supplier relationships, organizational capacity, and finally
ethical practices will be collected using an unstructured questionnaire with closed and open
ended questions. The questionnaire will be divided into five sections: background information,
supplier selection procedures, buyer-supplier relationships, organizational capacity, and ethical
practices. Structured and unstructured questions both save time and make analysis easier.
Questionnaires are effective, inexpensive, and simple to use. Secondary data was gathered
from annual reports and company publications.

3.4 Validity and Reliability

When a test evaluates what it was designed to evaluate, it is considered valid, according to
Kothari (2004). Validation studies will be carried out on the primary data collected. Experts
from various fields of study will be consulted. This will make it easier to make the necessary
changes and revisions, thereby increasing legitimacy. The term "reliability" refers to the
consistency of the outcomes. If the same result is obtained repeatedly, a test is considered
reliable (Cooper and Schindler, 2003).

3.5 Data Analysis and Presentation

Marshall and Ross explain that data analysis entails data regulation, organization, and
clarification (1999). The goal of this study is to determine the degree to which independent
variables influence the dependent variable. For easier presentation and analysis, the collected
data will be summarized and organized into tables, graphs, and pie charts.

3.6 Limitation of the study

The research limits itself to information provided by the staff in the procurement and finance
departments. This information will be used as the accurate information reflecting what exactly
happened when undertaking the project. Confidentiality regarding data to be collected was also
another hindrance in conducting the research. The researcher did as much as he could to
encourage the members of staff to disclose the information.
REFERENCE
Aceh, kue tradisional khas. (2019). No TitleΕΛΕΝΗ. Αγαη, 8(5), 55.
INFLUENCE OF PROCUREMENT PRACTICES ON
ORGANIZATIONAL PERFORMANCE IN KENYAN PUBLIC
SECTOR. A CASE OF MINISTRY OF EDUCATION King’oo , D.
M., & Muli, S. (n.d.).
Triyanto, J., Janjua, P. Z., Samad, G., Khan, N., Ishaq, M., Rumiati, A.
T., Permatasari, E. O., Bakkelund, J., Karlsen, R., Bjørke, Ø.,
Suryakumar, S., Karunakaran, K. P., Bernard, A., Chandrasekhar,
U., Raghavender, N., Sharma, D., Çelik, A., Yaman, H., Turan, S.,
… Tohirin, M. (2017). Effects of Procurement Practices on
Organizational Performance Within the Public Sector: a Case of East
African Portland Cement Company Limited. Jurnal Sains Dan Seni
ITS, 6(1), 51–66.

(INFLUENCE OF PROCUREMENT PRACTICES ON

ORGANIZATIONAL PERFORMANCE IN KENYAN PUBLIC SECTOR.
A CASE OF MINISTRY OF EDUCATION King’oo , D. M., & Muli, S.,
n.d.)
Aceh, kue tradisional khas. (2019). No TitleΕΛΕΝΗ. Αγαη, 8(5), 55.
INFLUENCE OF PROCUREMENT PRACTICES ON
ORGANIZATIONAL PERFORMANCE IN KENYAN PUBLIC
SECTOR. A CASE OF MINISTRY OF EDUCATION King’oo , D.
M., & Muli, S. (n.d.).
Triyanto, J., Janjua, P. Z., Samad, G., Khan, N., Ishaq, M., Rumiati, A.
T., Permatasari, E. O., Bakkelund, J., Karlsen, R., Bjørke, Ø.,
Suryakumar, S., Karunakaran, K. P., Bernard, A., Chandrasekhar,
U., Raghavender, N., Sharma, D., Çelik, A., Yaman, H., Turan, S.,
… Tohirin, M. (2017). Effects of Procurement Practices on
Organizational Performance Within the Public Sector: a Case of East
African Portland Cement Company Limited. Jurnal Sains Dan Seni
ITS, 6(1), 51–66.