Effect of Supplier Evaluation On Procurement Performance of Public Organizations in Diredawa

COLLEGE OF FINANCE, MANAGEMENT & DEVELOPMENT
DEPARTMENT OF PUBLIC PROCUREMENT AND ASSET MANAGEMENT
EFFECT OF SUPPLIER EVALUATION ON PROCUREMENT PERFORMANCE OF

PUBLIC ORGANIZATIONS IN DIREDAWA
BY:
KEMAL ALIYI
A Thesis Submitted to, the Ethiopian Civil Service University College of Finance, Manage-
ment and Development, Department of Public Procurement and Asset Management, in Partial
Fulfillment of the Award of a Master of Art Degree in Procurement and Asset Management
JUNE 2022
ADDIS ABABA, ETHIOPIA
1
COLLEGE OF FINANCE, MANAGEMENT & DEVELOPMENT
DEPARTMENT OF PUBLIC PROCUREMENT AND ASSET MANAGEMENT
EFFECT OF SUPPLIER EVALUATION ON PROCUREMENT PERFORMANCE OFPUB-

LIC ORGANIZATIONS IN DIREDAWA
By:
Kemal aliyi (ID No ECSU2101324)
Advisor:
Tihitina Ayalew (PhD)
A Thesis Submitted to the Ethiopian Civil Service University College of Finance Manage-
ment and Development, Department of Public Procurement and Asset Management, in Partial
Fulfillment of the Award of a Master of Arts Degree in Procurement and Asset Management
June 2022
Addis Ababa, Ethiopia
2
DECLARATION
First, I declare that this thesis is my original work and that all sources of materials used in
this thesis have been, properly acknowledged. The thesis has, been submitted to the college
of finance management and development in partial fulfillment of the requirements for the de-
gree of masters of art at the Ethiopia Civil Service University. I critically declare that, this
thesis was not, submitted to any other institution anywhere for the award of any academic de -
gree, diploma or certificate.
Name .......................................................
Signature---------------------------------------
Date of Submission: ---------------------------
Place: Ethiopia Civil Service University
i
DECLARATION CERTIFICATION
I certify that the thesis entitled “effect of supplier evaluation on procurement performance of
public organizations in Dire Dawa‟ by Kemal Aliyi is submitted with my approval as univer -
sity.
Name of Advisor: Tihitina Ayalew (PhD)
Signature ------------
June 2, 2022
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APPROVAL
This is to, certify that the thesis was prepared by Kemal Aliyi ‘Effect of supplier evaluation
on procurement performance of public organizations in Dire Dawa, which is submitted to
college of finance management and development in partial fulfillment, of the requirements
for the Degree of Master in procurement and asset management, complies with the regula-
tions of the University and meets the accepted standards with respect to originality and qual-
ity.
APPROVED BY BOARD OF EXAMINERS
__________________________ ______________ _________
Chair Person Signature Date
_____________________________ ______________ _________
Internal Examiner Signature Date
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Department Head Signature Date
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ACKNOWLEDGEMENT
First, I give tank full to Almighty Allah for providing me this opportunity to proceed success-
fully. This thesis appears in its current form due to the assistance and guidance of several
people. I would like to offer my sincere thanks to all of them.
Secondly, thanks to Ethiopian Civil Service University for funding my thesis because, this re-
search work was impossible without the funding organization.
Next, I would like to express my sincere gratitude to my advisor Dr. Tihitina Ayalew (Ph) for
her professional contributions and advice, guidance and constructive comments. I would also
thank the Dire Dawa public organization staff who participated in completed the question-
naires and the whole management for overall positive feed backs and comments.
In different way, I would extend my special thanks to my beloved wife Hamdiya Ali and to
all my families for understanding, supporting and continuous encouragement throughout my
years of study and through the process of researching and writing this thesis
Thank you!
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Table of Contents

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vi

LIST OF TABLES
Tables Page
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List of figures
Figure Page
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ACRONYMS
ANOVA Analysis of Variance
ASS after Sales Services
CIPS Chartered Institute of Purchasing and Supply
FDRE Federal Democratic Republic of Ethiopia
FPPPAA Federal Public Procurement and Property Administration Agency
ICT Information and Communication Technology
IT Information Technology
PPDA Public Procurement and Disposal Act
PPPDS Public Procurement and Property Disposal Service
SCI Supply Chain Integration
SPSS Statistical Package for Social Science
SPSS Statistical Packages for Social Science
VIF Variance Inflation Factor
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ABSTRACT
Public procurement plays a leading role in the attainment of political, economic and social
goals of a country through provision of goods, works and services. However, material quality
defects, compromised order cycle time, lead time and poor contract management among oth-
ers, are rampant. Selection and maintaining competent suppliers are very essential in pro-
curement. The objective of this study was to investigate the effect of supplier evaluation on
procurement performance of public organizations in Dire Dawa. To, achieve its objective,
the current study adopted a descriptive explanatory research design using quantitative ap-
proach and a two-stage sampling method was used. Simple random method was used to se-
lect 30 organizations from a total of 52 public organizations found in Dire Dawa city admin-
istration and purposive method was used to select 120 respondents from 30 organizations. A
closed-ended questionnaire was used to collect primary data, to achieve the four specific ob-
jectives on procurement performance of public organizations in Dire Dawa. The data was
analyzed using descriptive and inferential statistics of Statistical Package for Social Sciences
(SPSS version 21). The findings were presented in frequencies; percentages, mean and stan-
dard deviation were thematically presented in tables and figures. The study it was concluded
that, supplier financial stability, after sales services, technical capacity and supplier organi-
zational culture influence on procurement performance of the public organization in Dire
Dawa with a large extent and it has positive and significant effect on procurement perfor-
mance. The organization should take into consideration what evaluation criteria is related to
improve procurement performance and capitalize on them like supplier financial capacity,
after sales service, technical capacity, and organizational culture. to enjoy an organization
benefit related with acquisition of higher quality supplies with lower cost, Reduced risk of
supplier failure, and achieving customer satisfaction.
Key Words: after sales service, financial stability, technical capacity and organizational cul-
ture
CHAPTER ONE
This chapter presents the background of the study, the statement of the problem, the objec-
tives of the study, the hypothesis of the study, research questions, the significance of the
study, the scope of the study, and the organization of the study.
1.1 Background of the study
The concept of supplier evaluation is gaining traction among practitioners and even aca-
demics. The performance of the suppliers substantially affects the effectiveness and effi-
ciency of the buying firm. In Nigeria, Akenroye et al (2012) identified supplier evaluation as
a critical supply chain activity.
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A well-managed and structured approach to supplier evaluation ensures that the suppliers
have the necessary skills and knowledge to do the job. Organizations are under constant pres-
sure to find ways to reduce material and production costs by engaging in a strategic supplier
selection and evaluation process Weber, (2008). Supplier evaluation is one of the fundamen-
tal strategies for improving any organization's output quality. Supplier evaluation is the quan-
titative and qualitative assessment of suppliers to ensure the availability of a portfolio of best-
in-class suppliers Kamotho, (2014). Specifically, appropriate supplier selection is one of the
fundamental strategies for improving any organization's output quality, which has a direct im-
pact on the company's competitiveness and reputation Adamyan, (2002). Buyers should care-
fully select and evaluate their suppliers to maintain effective and reliable supply sources
Humphreys, (2003).
In ideal situations, supplier evaluation is expects to, positively influence procurement perfor-
mance. However, studies reveal mixed findings, with some indicating a significant positive
relationship while others indicate an insignificant one. One of the ways through which orga-
nizations strive to reduce supplier-related inefficiencies is through the evaluation of suppliers
Ouko, S. &Juma.D (2020).
xii
According to Nadir (2012), public procurement performance is influenced by unclear specifi-
cations, converging evaluation criteria for a few suppliers, discrimination, delivery time,
price of supplier goods and services, quality of supplies, and the tendering process is not ef-
fective. Favoritism is common in public tenders and forms part of the reasons why tenders
fail to win public tenders, Wondosen (2016).
The purpose of this research was to evaluate the effect of supplier evaluation on procurement
performance of public organization in Dire Dawa. The researcher was examining issues re-
lated with supplier financial Stability, technical capacity, After Sale Services and supplier or-
ganizational culture as well as their impact on public organization's procurement perfor-
mance.
1.2. Statement of the Problem
Public sectors face numerous challenges in the procurement process, which results in nonat-
tainment of value for money. More than 70% of the government budget is spent. In the pro-
curement process; however, more than half of this budget is lost due to improper procurement
process, absence of appropriate procurement plan, failure to use appropriate standard docu-
ments, and the incompetence in the execution of procurement process, Edward bairo (2020).
In Ethiopia, more project works are being affects due to the lack of effective procurement
process, which is the main cause of insufficient service delivery in all public sectors Anteneh,
(2015). In modern business, choosing a suitable supplier is a crucial business process in many
companies. A good supplier usually denotes lower risks and a higher profit. However, there
are always various kinds of challenges when a company selects a supplier. Financial status is
one of the most considerable issues for supplier selection. Many companies prefer to pick big
players due to sufficient funds they have.
An effective supplier assessment is necessary and crucial for the success of public organiza-
tions in today's competitive environment. Choosing the right suppliers in public organizations
is a difficult task because the wrong supplier results in delivery delays, unsatisfactory output,
and poor value for money. Many institutions highly evaluate suppliers in terms of their past
performance before they are prequalified. Pikousová and Pra (2013) Measuring supplier per-
formance is essential for ensuring a smooth supply chain. The goal is to; specifically improve
the performance of key suppliers. Understanding supplier performance was aid in risk reduc-
tion while also improving collaboration.
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Because of the growing importance and reliance on suppliers in the company's supply chain,
objective evaluation of supplier performance is required. Many suppliers are unable to meet
today's material and service requirements. Buyers must also determine whether a supplier is
well prepared to meet the company's long-term requirements and needs. It is also necessary to
determine whether a supplier can guarantee long-term supply continuity.
Many studies have been conducted on supplier evaluation, but the studies reviewed did not
look at supplier evaluation with respect to the financial stability, technical capacity, After
Sale Services, and supplier organizational culture, that may affect the procurement perfor-
mance of the public organization in Dire Dawa. The purpose of this study is to find out
whether this has an influence on the procurement performance of the public organization in
Dire Dawa.
For instance, Mohammed Ali (2017) studied the Effect of Supplier Evaluation on Procure-
ment Performance: The Case of Public Procurement and Property Disposal Service of FDRE,
and found that supplier quality commitment, financial ability, and supplier competency have
a significant impact on procurement performance.
A similar study by Justus KiprotichMutai and Barrack Okello (2016), Effects of Supplier
Evaluation on the Procurement Performance of Public Universities in Kenya, identified that
the findings of the study revealed that suppliers’ quality commitment, suppliers’ financial ca-
pacity, and suppliers’ competence have a significant effect on the performance of the pro-
curement function of public university campuses in Kericho County.
Eyoel Edossa (2019) investigates factors influencing public procurement performance in the
case of Dire Dawa. Public Procurement and Property Disposal Services, and finds that pro-
curement planning, competence of staff, procurement procedure, and information communi-
cation technology positively affect procurement performance to a significant extent.
The majority of supplier evaluations consist of only three factors: price, quality, and delivery
Hirakubo&Kublin (1998), Howard (1998), Degraeve and Roodhooft (1999) argued that sup-
plier selection and evaluation are most, often based on price, which in turn results in addi-
tional costs to the buyer because of unreliable delivery, limited quantities, inferior quality,
and inadequate communication.
Delayed deliveries, poor quality products or services, and order non-completion are all com-
mon problems for public institutions in Dire Dawa. The government anticipates high procure-
ment performance, efficiency, and cost savings in supply and service, as well as the delivery
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of high-quality products. Supplier evaluation is one method, and it is critical for public bodies
to conduct rigorous supplier evaluation and award contracts to the right suppliers.
However, no research has been, conducted to assess the impact of supplier evaluation in
terms of supplier financial stability, supplier technical capacity, supplier after-sale services,
and supplier organizational culture on the procurement performance of public organizations
in Dire Dawa. As a result, the purpose of this study was to fill this research gap by attempting
to evaluate the impact of supplier evaluation on the procurement performance of public orga-
nizations in Dire Dawa.
1.3. Research Questions
Based on the identified research problems the following research questions have been, devel-
oped and the study was focus on answering these questions.
1. To what extent does a supplier's financial stability affect the procurement performance of
public organizations in Dire Dawa?
2. To what extent do suppliers' after-sale services affect the procurement performance of pub-
lic organizations in Dire Dawa?
3. To what extent does a supplier's technical capacity affect the procurement performance of
public organizations in Dire Dawa?
4. To what extent does a supplier's organizational culture affect the procurement performance
of public organizations in Dire Dawa?
1.4. Objectives of the study
1.4.1. General objective
The general objective of the study was to determine the effect of supplier evaluation on pro-
curement performance of public organization in Dire Dawa.
1.4.2. Specific Objectives of the Study
The specific objectives of the study were, mentioned as follows:
1. To investigate the impact of supplier financial stability has on the procurement perfor-
mance of public organizations in Dire Dawa.
2. To assess the effect suppliers' after-sale services has on the procurement performance of
public organizations in Dire Dawa.
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3. To evaluate the effect of suppliers' technical capacity has on the procurement performance
of public organizations in Dire Dawa.
4. To assess the effect of supplier organizational culture has on the procurement performance
of public organizations in Dire Dawa.
1.5 Research Hypotheses
H1:0- financial stability of a supplier has no effect on procurement performances of public

organization in Dire Dawa.
H1:1- financial stability of a supplier has effect on procurement performance of public orga-
nization in Dire Dawa.
H2:0- supplier after sales services has no effect on procurement performance of public orga-
H2:1- supplier after sales services has effect on procurement performance of public organi-
zation in Dire Dawa.
H3:0-supplier technical capacity has no effect on procurement performance of public organi-

H3:1-supplier technical capacity has effect on procurement performance of public organiza-

tion in Dire Dawa.
H4:0-supplier organizational culture has no effect on procurement performance of public or-

ganization in Dire Dawa.
H4:1-supplier organizational culture has effect on procurement performance of public organi-

1.6. Justification and Significance of the Study
The findings of this research may help PPPDS in order to, identify that the effect of supplier
evaluation criteria on procurement performance and to fix the problem with remedial action.
It is also, expected that from the findings of this study, PPPDS may put in place appropriate
measures to improve procurement performance levels. Similarly, it provides the researcher
an opportunity to compare the academic theory with the actual procurement practice at the
ground and gain deep knowledge in the concepts of public procurement performance.
This study may serve as a reference for other researchers who are interested in conducting
studies on related issue. In addition, the study could be of importance to procurement Profes-
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sionals in various public sectors since it would add a body of knowledge to effect of supplier
evaluation criteria on procurement performance. The issues, which had been, addressed in
this research, may expect to improve the supplier evaluation criteria made by public organiza-
tion in selection of the right supplier, as part of their strategic plan for the achievement of best
value for public money. The decisions given based on the research may also be important to
improve overall public procurement performance.
The findings were, shed light on how supplier evaluation affects the procurement perfor-
mance of public organizations in Dire Dawa. Other public entities and government units was
benefit from the findings as well.
1.7. The scope the study
The scope of the study is delaminated to the procurement activities of Public Procurement
performances in Diredawa city adminstration specifically on the effect of supplier evaluation
criteria on procurement performance such as supplier financial stability, after sales services,
technical capacity and supplier organizational culture. The subject of the study is only the
Public Procurement performances in Dire Dawa city adminstration. The study was not cov-
ered the private procurement activities.The study also measured the performance of procure-
ment activities of Public Procurement performances in Diredawa city adminstration in terms
of the acquisition of higher quality supplies with lower cost, Reduced risk of supplier failure
and achieving customer satisfaction.
The scope of the study was the effect of supplier evaluation on the procurement performance
of public organizations in Dire Dawa. The study was focus on two variables, which are sup-
pliers' evaluation dimensions as an independent variable and the procurement performance of
public organizations in Dire Dawa dependent variable. Based on these variables, the study
was analyzing the supplier evaluation dimensions (financial stability, after-sales services,
technical capacity, and organizational culture) on the procurement performance of public or-
ganizations and also the relationship between supplier evaluation and procurement perfor-
mance of public organizations in Dire Dawa.
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1.8. Limitations of the Study
The study used questionnaires as the only instrument for collecting data. The researcher did
not have much control on the respondents concerning the information they filled in the ques-
tionnaires. The respondents were not willing to give full information in fear that it could leak
to their competitors.
Some respondents were not punctual in returning the questionnaires. The researcher has man-
aged all these limitations by explaining the goal and the expected outcome of the survey to
the respondents.
1.9. Description of the Study Area

Dire Dawa city is located in the eastern part of Ethiopia between 9027’N and 9049’N latitude
and 41038`Eand 42019`E longitude, and in the eastern marginal catchment of Awash basin.
East Hararge Administrative zone of Oromia Regional State borders it in the south and south-
east and Shinele zone of Somalia Regional State in the north, east and west. Dire Dawa city is
accessible by air, railway and road, and is about 515kms road distance to the east of Addis
Ababa and 311kms to the west of Djibouti port.
The urban population was 233,224 men population comprises the majority (50. 2 %.). While,
female constitute (49.8%) Dire Dawa city has nine urban kebeles. Dire Dawa is characterized
by an arid and semi-arid climate with low and erratic rainfall and a mean annual temperature
which lies between 17 0C and 27 0C. The Administration enjoys a bi-modal type of rainfall
with April as a peak for the small rains and July for the big rains. Small rains in spring, big
rains characterize the rainfall pattern in summer. The mean annual rainfall varies from 410
millimeters to 800 millimeters and above. The average duration of the dry season is 6 to 7
months. However, recently, rainfall pattern has become much more unpredictable with re-
ceiving extremely minimum and maximum rainfall per year.
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Legend Zones
Town Regions zones Ethio zones Study area
Figure 3.1 Location map of Dire Dawa
Source Eleni (2000)
2. Operational Definitions of key terms
Supplier evaluation: is the assessment process applied to, existing and new suppliers in order
to measure and monitor their performance in order to reduce costs, mitigate risk and drive
continuous improvement Gordon, and (2008)
Public procurement is the process of the acquisition, usually by means of contractual arrange-
ments after the public competition, of goods, services, works and other supplies by the public
entity.
Public procurement performance is measured whether it assures value for money due to
proper process and procedure or increased customer satisfaction. It entails high returns on in-
vestment (ROI), reduced transactional costs, faster delivery of services and supplies, delivery
of high-quality purchases, and streamlined supply chains Odhiambo&Kamau, and (2003).
19
Supplier financial stability: is the ability of an entity to continue to achieve its operating ob-
jectives and fulfil its mission over the long term. It evaluates the risk that, over the life of a
proposed contract, conducting financial viability assessments imposes a cost on tenderers and
the entity, assessments should be commensurate with the scale, scope and relative risk of the
proposed project AGDF, (2014).
Supplier technical capacity, Itis the maximum amount that suppliers can contain Wangwe,
(2010). Also on the other hand, it reflects how robust and agile your supply chain is to disrup-
tions. At any given time, the measure of what your maximum supply chain capacity is will be
a fixed figure, which could be expressed as a percentage of total capacity Patrick, (2013).
Performance: it is the analysis a company’s performance against its objectives and goals. The
analysis focuses on three main outcomes, first, shareholder value performance; second, finan-
cial performance; and third, market performance. Richard et al., (2009).
2.1. Organizations of the study
This study contains five different chapters. The first chapter deals with, background of the
study, statement of the problem, Research questions, hypothesis objectives, significance,
scope and limitation of the study, operational definition and organizations of the study are in-
cluded in chapter one.
The second chapter deals with literature review in order to make possible readers general un -
derstand of the effect of supplier evaluation on procurement performances of public organiza-
tion. The third chapter focused on research methodology with its relevant and rational instru-
ments and methods used to collect data. The fourth chapter contains about data presentation,
analysis and interpretation. The last chapter which was chapter five contained the study find-
ings, conclusion and recommendation part of the research in relation to effect of supplier
evaluation procurement performances of public organization in Dire Dawa.
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CHAPTER TWO: REVIEW OF THE RELATED LITERATURE
This chapter comprised a definition of key terms, a theoretical review, an empirical review, a
research framework, summary of literature review and research gap
2.1. The Concept and Nature of Public Procurement
Ethiopia's Public Procurement Proclamation (No. 649/2009) defines procurement as "obtain-

ing goods, works, consultancy, or other services by purchasing, hiring, or obtaining by any
other contractual means". The overall task of procurement is to obtain goods and services of
the right quality, quantity, from the right sources, at the right time, place, and price.
Dobler and Burt (1998) define procurement as "the acquisition of goods, services, and works
from third parties by a contracting authority, whether under formal contract or otherwise".
Getnet A. and Tilahun A. (2014) Procurement consists of the whole process of acquiring
goods and services. It also includes risk assessment, identification and evaluation of alterna-
tive solutions, contract award and management, receiving the procured property or obtaining
the services, and settling of payments.
According to the Ethiopian Federal Public Procurement Manual (2011), public procurement
is the process by which a public entity acquires goods, services, and supplies. It is desirable
that the goods or services are appropriate and that they are procured at the best possible cost
Mangan, Lawani, and Butcher, (2008).
Michael and JuanitaTony: Public procurement are the acquisition of works, goods, and ser-
vices by public entities. According to Tony (2011), public procurement ranges from the pur-
chase of routine supplies or services to formal tendering and contracting for large infrastruc-
ture projects. It includes starting from very small items (for example, stationary, punchers, of-
fice furniture, detergent, toner and others).
2.2. Principles of Public Procurement
According to the Ethiopian public procurement manual (2011), there are a number of princi-
ples of public procurement that can be identified that are shared by most public procurement.
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2.2.1. Value for money
The right price, quality, time, place, and quantity. Moreover, the lowest initial price may not
equate to the lowest cost over the operating life of the item procured. However, the basic
point is the same: the ultimate purpose of sound procurement is to obtain maximum value for
money.
2.2.2 Cost-effectiveness
Economy: Procurement is a broad concept that goes beyond purchasing activity, whose pur-
pose is to give the public body the best value for money. Value implies plea and swiftness
that meet the public body's needs as planned, producing positive results immediately. In addi-
tion, efficiency implies practicality, especially in terms of compatibility with the administra-
tive resources and organizational capabilities of the purchasing entity and its procurement
personnel with the planned/envisaged type and volume of procurement.
2.2.3. Effectiveness
Effectiveness means the extent to which the entity is able to procure goods, services, and in-
formation of quality in a timely and most economical manner.
2.2.4. Non-discrimination (fairness)
Good procurement is non-discriminatory, impartial, consistent, and therefore reliable. It of-

fers an equal opportunity for all interested contractors, suppliers, and consultants by provid-
ing a level playing field on which to compete and, thereby, directly expands the public body’s
options and opportunities for getting value for money.
2.2.5. Transparency:
Good procurement establishes and then maintains rules and procedures that are accessible,
predictable, and unambiguous. It should be fair and seen to be fair. Accountability and Ethi-
cal Standards:
Good procurement holds its practitioners and other officers responsible for enforcing and
obeying the rules. It also makes them subject to challenge and sanction, if appropriate, for ne-
glecting or bending those rules. Accountability is a key inducement to individual and institu-
tional probity, a key deterrent to collusion and corruption, and a key prerequisite for procure-
ment credibility. All procurement officers and other staff should adhere to the professional
ethical code.
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2.3. The Importance of Procurement Performance
Performance provides the basis for an organization to assess how well it is progressing to-
wards its predetermined objectives. According to Van Weele (2005), procurement perfor-
mance starts with purchasing efficiency and effectiveness in the procurement function. For
any organization to change its focus and become more competitive, performance is a key
driver to improving the quality of services.
A number of factors including financial performance, customer service, social responsibility,

and employee stewardship can evaluate a company’s procurement performance. There must
be close cooperation with the relevant players in the supply chain for performance to be real -
ized, according to Richard (2009).
Procurement performance is the quality and quantity of goods and services provided by pub-
lic sector procurement officers. It involves high returns on investment, reduced transactional
costs, faster delivery of services and supplies, and streamlined supply chains Odhiambo&Ka-
mau, (2003).
MwangiTelewaNgotho (2014), Public procurement takes time through the aspects of adver-
tisement and receipt of tenders, evaluation and evaluation of these tenders and the capacity of
the firms. The longer the process is in the undertaking of the procurement process, the longer
it takes the procuring entity to undertake its functions.
2.4. Supplier Evaluation
According to Hald and Ellegaard (2011), supplier evaluations were defined, as "the process
of quantifying the efficiency and effectiveness of supplier action". This means that the buying
institution conducts the evaluation to stimulate the behavior of the supplier. The goal of every
enterprise is to utilize limited resources in the most efficient manner to realize its objectives
with minimal costs. According to Gordon (2008), supplier evaluation refers to the practice of
approving and evaluating potential suppliers.
Supplier evaluation is a continuous process for purchasing departments and is a pre-qualifica-

tion step in the process of purchasing, Monczka, Trent, &Handfield (2008). Kavale&
Mwikali (2012), many organizations feel that supplier evaluation does not have much influ-
ence on the buying decision.
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2.5 Evaluation Criteria for Suppliers
The majority of supplier evaluations consist of only three factors: price, quality, and delivery
Hirakubo&Kublin (1998), Howard (1998). Degraeve and Roodhooft argued that supplier se-
lection and evaluation are most often based on price. According to Jayaraman, Srivastava and
Benton (1999), the selection of a new supplier may result in additional fixed costs. According
to a study on the evaluation processes of suppliers Simpson, Siguaw& White (2002), only a
limited number of buyers have a formal supplier evaluation process in place.
Suppliers are considered the best tangible assets of any organization that has varied strengths
and weaknesses that require careful assessment before an order is placed de Boer, (2001).
With the ability to analyze both the quantitative and qualitative criteria, the organization is
able to arrive at a robust decision. Supplier evaluation is often complicated by the fact that
multiple criteria, such as price, quality, flexibility, delivery, and service, must be considered
in the decision-making process Hirakubo and Kublin, (1998).
Supplier evaluation is a management activity whose primary aim is to acquire information to

analyze and manage supplier relationships and supply situations Li et al., (2006). The impor-
tance of supplier evaluation is evident from its impact on firm performance and, more specifi-
cally, on final product attributes such as cost, design, manufacturability, quality, and so forth
Sarkis&Talluri, (2002). For supplier evaluation to be objective and transparent, it needs to be
conducted using set criteria to ensure standardization in the evaluation. The development of
appropriate criteria that capture the interests of the buyer is one of the indicators of procure-
ment performance Nair, Jayaram& Das, (2015). Relatively recent developments in supplier
selection advocate the use of multiple criteria models in supplier evaluation Murigi, (2014).
Some of the supplier evaluation criteria include financial ability, quality, production facilities,
environmental issues, the supplier's organizational culture, cost factors, production capacity,
and employee capabilities, among others Lysons& Farrington, (2006).
2.5.1. Financial stability
The supplier's financial condition needs to be evaluated at the earliest stages of supplier ap-
praisal. Chartered Institute of Purchasing and Supplies: Financial status and stability are
measured by factors such as profitability, cash flow management, assets owned, debts owed,
among other factors. Some purchasers view the processes as a pre-screening exercise that a
supplier must pass before a detailed evaluation process can begin.
24
The selection of a supplier with poor financial conditions presents a number of dangers to the
purchaser. Lastly, financial weakness seems to be an indication of underlying problems
Handfield et al., (2008).
A buyer may need to insist on quality but the supplier is forced to cut costs; a buyer may
have a claim against the supplier but lack the working capital to meet it; and a buyer may
want to insist on quick delivery but the supplier cannot pay overtime Lysons, (2008).
2.5.2. After-sales services
After-sales services include every step undertaken for the welfare of the customers after the
sale. After sales services also include carrying out several activities to determine if the cus-
tomer is happy with the sale or not. Murali, Pugazhendhi, and Muraliddharan, (2015): Cus-
tomer satisfaction is the most important milestone for any growing business. After-sales ser-
vices (ASS) are mostly used to describe services that are delivered after the delivery of a cer-
tain commodity. This term is referred to two broad types of activities in retail literature
Mouly Potluri and Hawariat, (2010). For companies that produce tangible products, ASS is
considered as a service delivered to the customers via their distribution chain Gaiardelli et al.
(2007).
2.5.3 Suppliers' technical capability
Technical capacity refers to particular technical capabilities such as knowledge and skills
(techniques) required for an individual or organization to elaborate on their tasks. It also
refers to the tacit knowledge (knowledge and expertise that is difficult to explicitly express in
words) accumulated within the organization. There are elements that are shared across nu-
merous sectors and fields, like basic scientific knowledge, as well as elements that constitute
various types of knowledge and skills (techniques) over a limited range. Regarding technical
capacity, it is relatively easy to measure the extent to which the partner is furnished with
knowledge and skills (techniques), and these can be improved over a relatively short time
through training and the like.
Momanyi Albert Nyachieo (2001). Technical capability evaluation has a positive and signifi-
cant influence on the supplier performance of public entities in Kisii County. An increase in
the company's evaluation of its suppliers, such as labor force capacity, technical knowledge
of operation and staff level of expertise, leads to a significant improvement in the perfor-
mance of public entities.
25
2.5.4 Organizational Culture of the Supplier
Organizational culture is a foundation for management and operations practices. Zhao

Schilke and Cook (2014) expect SCI, as an important aspect of a firm's operational practice,
was significantly influenced by organizational culture. The SCI literature suggests SCI re-
quires both the capability and the willingness to integrate Fawcett et al., (2007); Koufteros et
al, (2005); Zhao et al. (2011). Thus, organizational culture serves as a foundation for manage-
ment and operations practices Braunscheidel et al., (2010). With a sample of 102, inter firm
relations, Beugelsdijk et al. (2006) find that an organizational culture that emphasizes an ori-
entation toward innovation, stability, and a long-term perspective is positively related to rela-
tionship skills.
Hierarchical culture emphasizes control and top-down decision-making, which can reduce the
extent of SCI. Development culture, emphasizes future developments and encourages firms
to integrate internal functions with external customers and suppliers. Rational culture legit-
imizes the use of incentives to motivate employees toward II and external integration Braun-
scheidel et al., (2010), Ellinger, (2000). CIPS: We expect that the four cultural dimensions
each influence the three SCI dimensions in different ways. The organizational culture concept
became important because of what it drew attention to and what it enabled.
It placed emphasis on the hidden creative potential of human beings to transform organiza-
tions. The downside to this was that it became associated with faddish "quick-fixes," which
were the antithesis of what culture was supposed to represent.
2.6 The Concept of Organizational Performance
Performance refers to the degree of achievement of the mission at work place that builds up
an employee job Cascio, (2006). Different researchers have different thoughts about perfor-
mance. Mostly researchers used the term performance to express the range of measurements
of transactional efficiency and input & output efficiency Nowadays organizations are more
focusing on the management of non-financial or intangible assets like customer’s link, ser-
vices, quality and performance, not on the assets, which are financial in nature (Kaplan and
Norton, 2001). Therefore, there is a need for proper performance measurement system to
measure and evaluate the performance of employee either financial or non-financial. There-
fore, there is a need for proper performance measurement system to measure and evaluate the
performance of employee either financial or non-financial.
26
Chenhall (2005) said that the SPMS provide a way to translate and measure the both finan-
cial and non-financial performance. He also suggests that it is the incorporative nature of this
measurement technique; provide the potential to increase the strategic competitiveness of the
organization. Researchers among themselves have different opinions of performance. The
central issue concerns with the appropriateness of various approaches to the concept utiliza-
tion and measurement of organizational performance Venkatraman & Ramanuiam, (1986).
According to Daft (2000), organizational performance is the organizations' ability to attain

its goals by using resources in an efficient and effective manner. Quite similar to Daft (2000),
Richardo (2001) defined organizational performance as the ability of the organization to
achieve its goals and objectives. Hefferman and Flood (2000) stated that Organizational per-
formance has suffered from not only a definition problem, but also from a conceptual prob-
lem.
They stated that as a concept in modern management, organizational performance suffered

from problems of conceptual clarity in a number of areas. The first was the area of definition
while the second was that of measurement. The term performance was sometimes confused
with productivity. According to Ricardo (2001), there was a difference between performance
and productivity. Productivity was a ratio depicting the volume of work completed in a given
amount of time. Performance was a broader indicator that could include productivity as well
as quality, consistency and other factors. In result-oriented evaluation, productivity measures
typically considered.
Performance is a widely used concept in many areas. Mostly, it is a measurement of how well
a mechanism or process achieves its purpose. Moullin (2003) defines an organizations perfor-
mance as how well the organization is managed and the value the organization delivers for
customers and other stakeholders. It is also the measurement of the effectiveness and effi-
ciency of both the organization and the workers (Neely et al.,) where effectiveness refers to
the extent to which stakeholder requirements are met, while efficiency is a measure of how
economically the organizations resources are utilized when providing a given level of stake-
holder and customer satisfaction. Hence, performance can be defined as the use of resources
both efficiently and effectively in the achievement of its expected objectives.
Performance is equally defined as the achievement of financial and non-financial goals that
enables an organization to remain viable and sustainable in both the short term and in the end
Denison, (2008).
27
2.7. Empirical Review
Ouko, S., & Juma, D., (2020) surveyed effect of supplier evaluation on performance of the
procurement function of private health institutions in kisumu county, kenya, cross sectional
survey were data was collected through structured questionnaire from 75 procurement staff of
the 25 private health institutions in Kisumu Countyand applying regression analysisthe rela-
tionship was experimentally tested. The findings from the study revealed that, supplier qual-
ity commitment is a mandatory requirement for boosting the procurement function; two, sup-
plier financial stability boost procurement performance function by minimizing costs associ-
ated with re-advertisements of tenders due to prequalified supplier’s financial inability; and
three, supplier competence is a significant determinant of procurement performance, since
overall supplier capability in terms of product/service quality responsiveness guarantees cus-
tomer satisfaction.
The study recommended that the procurement office should consider supplier’s quality com-
mitment to ensure that procured goods/services meet customer needs and standards, two, the
procurement office should evaluate suppliers’ financial stability in determining suppliers’ fi-
nancial capability of supplying procured goods/services; and three, to boost the procurement
performance function, procurement officers should carefully assess supplier’s competence in
supplying quality goods/services before being awarded bids.
Lynda Ama Amonoo Ba. (Hons), (2014) conducted an structured survey on 60 randomly
sampled procurement staff from Greater Accra and Tema Regions of Ghanaon an evaluation
of the importance that institutions attach to supplier selection criteria in public procurement
practices in ghana. Using descriptive statistics and scale ranking. The findings revealed that
many public institutions rate delivery (4.48), quality (4.48) price (4.27), and warranties
claims (4.09) criteria high and important for supplier selection and evaluation relative to the
other sustainable criteria for example reusable and recyclable materials which were rated 1.94
and 1.85 respectively. This study recommended study offers recommendations to public
procuring entities and the PPA to review procurement practices to include modern business
criteria of environmental and sustainability concerns.
Venn Bisieri Manyega, (2015), conducted a study to evaluate the effects of supplier selection
on procurement performance of public institutions a case study of kisii county, kenya. This
study was a descriptive-survey and it utilized a questionnaire for collecting data from 90 tar-
28
get population to select a sample size of 27 respondents. Multiple regression analysis and
Content analysis method was used for data analysis.
The results showed that procurement performance includes monitoring results, comparing to
benchmarks and best practices, evaluating the efficacy and efficiency of the process, control-
ling for variances, and making adjustments to the process as necessary. The researchers
stressed that The management on public institutions should therefore adopt tendering and pre-
qualification supplier selection methods thus ensuring effective procurement performance.
Anguandia John (2018) carried out a study on the supplier evaluation and organizational per-
formance a case study of arua district local government. A random sampling method was
used to select 45 respondents out of the target population of employees ofarua district local
government. The researcher concludes that supplier quality commitment has significant effect
on organization performance of arua district local governmentSuppliers' level of quality com-
mitment directly determines the level of quality in products and services obtained through
procurement activities; product quality is just an aspect of organization performance. In over-
all, achievement of product quality affects organization performance though the effect is not
significant.
Munyaneza Robert and Dr. Patrick Mulyungi (2018) carried out descriptive research design
to investigate the relationship between supplier appraisal and procurement performance in
Government Ministries in Rwanda; A Case Study of Mininfra. The study 45 sample respon-
dents out of 102 target respondents mininfra. The findings showed that financial sustainabil-
ity content is the most significant in explaining procurement performance in government min-
istries with a significance of 0.00, which is less that a p-value of 0.05 and contribute 85.3% to
the procurement performance. He recommended that mininfra should therefore invest on
modern appraisal criteria that have been proven to have greater procurement performance.
Study of supplier selection and assessment criteria by Weber, Current, and Benton (1991) il-
lustrated that soft, non-quantifiable selection criteria have a greater impact on performance
than hard, more quantifiable criteria such as supplier capability. A survey on public procure-
ment in Kenya by the OECD (2007) found that overall; the performance of public procure-
ment was 66% when using the BLI sub indicators. State corporations are organizations in
which the government owns more than half of the share capital, making it the sole share-
holder. In his study, Schiele (2007) established that extensive supplier audits significantly in-
fluence affirms' performance level. According to the Report of the Presidential Taskforce on
29
Parastatal Reforms (2013), a "state corporation" shall be an entity howsoever incorporated
that is solely or majority owned by the government or its agents for commercial purposes.
The PPDA of 2005 stipulates the guidelines to be followed by public institutions in the pro -
curement process. Aseka (2010) did a study on supplier selection criteria and the performance
of manufacturing firms listed on the Nairobi Stock Exchange. Masiko (2013) found that
strategic procurement practices contributed to increased performance in procurement in com-
mercial banks. There exist glaring disparities in the overall execution of the procurement
process between private sector and public sector institutions Johnson, Leenders, & Flynn,
(2011). In their study, Mwikali and Kavale (2012), seeking to identify the factors affecting
supplier selection, illustrated that cost, technical capability, quality assessment, organiza-
tional profile, service levels, supplier profile, and risk factors are the major factors affecting
selection of suppliers.
A study by Kamenya (2014) on the relationship between supplier evaluation and performance
in large food and beverage manufacturing firms in Nairobi revealed that there is a positive re-
lationship between performance and supplier evaluation criteria. The authors observe that the
use of IT in relaying information ensures that all suppliers get access, and this reduces infor-
mation asymmetry. While the PPDA of 2005 has been in effect since 2007, Kenya's public
institutions have been riddled with corruption. According to Barsemoi, Mwangagi and
Asienyo (2014), some of the factors that contribute towards procurement performance in
Kenya's private sector include staff competence, organizational structures that allow for open
decision making, quality management systems, and the use of information technology, not
only to ensure dissemination of information but also the accuracy of information reaching all
stakeholders.
The use of IT in the private sector is one of the factors that have led to transparency in private
sector procurement. Barsemoi, Mwangagi and Asienyo (2014) point out that the use of the in-
ternet and IT infrastructure has had a revolutionary effect on the execution of the procure -
ment function.
NasraNzau and Njeru (2014) did a study on the factors affecting procurement performance in
public universities in Kenya's capital, Nairobi. They found that flexibility ensured procure-
ment performance largely. Other factors such as cost, time, and quality also played a great
role in ensuring procurement performance.
30
Nigerian authors Nzau and Njeru (2014) recommend that management at public universities
enhance training and professional support to enhance procurement performance. They report
that 79% of respondents were of the opinion that procurement staff lacked adequate skills in
supply chain management. This creates suspicion as to the objectivity with which they can
undertake supplier selection and evaluation.
A study by Keneth Bahati, (2013) used case study design design through interviews and
questionnaire instruments on 80 procurement officers selected through Purposive sampling
method used to select 41 respondents to o examine the impacts of organizational cultural
change and its impacts on performance in public institution: the case of tanzania public ser-
vices college. The findings revealed that organization cultural change impacted positively on
organizational performance as long as TPSC invest in Technology and Human resource de-
velopment in the acquired organization to turn around and produce the much desirable conse-
quences.The study recommended TPSC needs to focus on Customers and customer satisfac-
tion as the two elements are important in sustaining the progress that TPSC has registered.
Unsatisfied customer will always find new suppliers for meeting their expectations and thus
increase competition in the market in favor of its competitors. To provide effective customers
service TPSC need to ensure there is greater consistency in terms of staff attitudes, motiva-
tion and competence through both recruitment and training programs.
Elizabeth Wangu Wachiuri (2018) using census method of collecting primary data from 187
state corporation in Kenya to establish the influence Of Supplier Evaluation Criteria On The
Performance Of State Corporations In Kenya.
The study findings indicated that supplier quality commitment, supplier competence, supplier
financial viability and supplier capacity have a positive and significant association with per-
formance of state corporations.the researcher recommended that the need for suppliers to im-
prove on the quality of their services; develop competent technical abilities so as to provide
high quality products or services; formulate an effective financial plan, which will ensure that
their financial viability is sustainable; and enhance their capacity so as to meet the expecta-
tions of their customers.
Simpson, Siguaw& White (2002) only a small percentage of buyers have a formal supplier
evaluation process in place. Supplier selection has an impact on profitability, and businesses
should consider it when awarding contracts.
31
According to Jayaraman, Srivastava, and Benton (1999), the selection of a new supplier may
result in additional fixed costs because a company may need to invest in new machinery, staff
training, or the implementation of new technologies
2.8. Conceptual Framework
A conceptual framework assists in simplifying the proposed relationships between the depen-
dent variable and the independent variables in a study and allows the same to be depicted dia -
grammatically. The conceptual framework explains the relationship between independent and
dependent variables in the study. In this study, Procurement performance is the dependent
variable since its success depends on individual outcomes of supplier evaluation, which is the
independent variables: Technical capacity, financial stability of a supplier, after sales services
and supplier organizational culture. The success of supplier evaluation effects on procure-
ment performance i.e. higher quality supplies with lower cost, reduced risk of Supplier failure
and customer satisfaction as shown in Figure.2.8
independent dependent
variable variable
financial
stability
after sales
service
procurement
performance
technical
capacity
organizational
culture
Figure 2.8 conceptual frameworks
Source own survey (2022)
2.9. Research Gaps
Having reviewed the literature and the empirical studies that focus on supplier evaluation it
has been very clear that the influence of supplier evaluation on procurement performance of
32
public organization in a city level in Ethiopia was not well developed. The lack of empirical
work on Supplier evaluation thus presents a distinct knowledge gap. It means that we cannot
clearly understand how Supplier evaluation can be either achieved or, indeed, lost in practice.
What is proposed in theory may not apply in practice Benjamin et al., (2015).
2.10 Summary of Literature Review
The literature illustrated that a comprehensive framework on the influence of supplier evalua-
tion on state corporation performance. Through the literature review the researcher has estab-
lished that there is research that have been done on supplier evaluation and this has been of
great importance as it has assisted the researcher get secondary data on the research. A con-
ceptual framework has been proposed to conceptualize or represents the relationships be-
tween variables in the study and shows the relationship diagrammatically. Some of the vari-
ables used are deemed to the best for the study is supplier financial stability supplier after
sales service, supplier technical capacity and supplier competence. In each variable, the study
has also outlined the best sub variables also deemed best for this particular study.
33
CHAPTER THREE: METHODOLOGY OF THE STUDY
This chapter describes the methodological aspects used in this study. It includes the re-
search design, area of the study, target population, sampling frame, sampling techniques
used, sample size, data collection instrument, data analysis, and handling of validity and
reliability issues.
3.1 Research Approach
There are two basic approaches to research, quantitative approach and the qualitative ap-
proach Kothari, (2004). The quantitative approach involves the generation of data in quanti-
tative form, which can be subjected to rigorous quantitative analysis in a formal and rigid
fashion. Qualitative approach to research is concerned with subjective assessment of atti-
tudes, opinions and behavior Kothari, (2004). The study would have been used and collected
quantitative data to evaluate the effect of supplier evaluation on procurement performance
public organization in Dire Dawa. The quantitative data would have been a self-developed
closed ended questionnaire contained items of 5-point Likert type (1- strongly disagree 5-
strongly agree).
3.2. Research Design
The research design entails the methods and procedures adopted in a scientific research
study. In other words, a research study is like a road map to reach the destination Creswell &
Creswell, (2017). This study adopts a descriptive research design. In alignment with quantita-
tive design, a survey method was used in this study involving respondents from Dire Dawa
public organization. The survey method was conducted by giving all respondents a set of
questionnaires designed to answer the research questions. The choice of this method is
twofold: first, it was an appropriate method for getting quantitative information that can be
analyzed through statistical analysis, and secondly, a survey is an appropriate method for val-
idating the causal effect relationship Ramli et al., (2009).
34
3.3 Target population
The study targeted Expert, senior expert, and head of department unit staff from 52 Dire
Dawa public organization who are directly related with procurement and purchasing related
activities. It was expected that employees working in finance and procurement department
where the ideal respondents in order obtain the relevant insights that could help to answer the
study questions. According to human resource, data of the city the following was the number
of employees in the 30 Dire Dawa public organizations.
Table 3.1Sample Size of the Study
Category Study Population Sample Size Sample
head of department unit 6 100% 6

Senior expert 96 100% 96
Expert 18 100 18
Total Population 120 100% 120
Source: Dire Dawa city administration public service and human resource development of-
fice (2022)
Sekaran (2005) observes that a research population is generally a large collection of common
data from which samples are taken for analysis. It is for the benefit of the population that re-
searches are done. However, due to the large sizes of populations, researchers often cannot
test every individual in the population because it is too expensive and time-consuming. This
study used 120 respondents in order to answer the study objectives efficiently and effectively.
By targeting the Expert, senior expert, and head of department unit staff all from finance and
procurement or dealing with financial aspects of the government, the study ensured that
knowledgeable respondents were involved in the data collection, to ensure that the study re-
sults are generalizable.
35
3.4 Sample Frame
A sample is the segment of the population that is selected for investigation. It is also a sub-
group of the elements of the population selected for participation in the study Bryman,
(2012). This study uses the Krejcie and Morgan (1970) table of determining sample size from
the population as shown in table 1. It is observed that a sample frame is a listing of all ele-
ments in the population from which the sample is drawn. The purpose of sampling frames,
which is to provide a means for choosing the particular members of the target population that
are to be interviewed in the survey Bennett, (1993).
In this study, the sampling unit is the 30 public organization composed of the Expert, senior
expert, and head of department unit staff. This study used simple random sampling method to
select the public organization out the total public organization in the city of Dire Dawa and
purposive sampling technique to select the respondents from the selected public organiza-
tions. Purposive sampling technique is, where all possible respondents are listed, no duplica-
tion of names contact of respondents provided, accurate to date and for the intended research.
The selection criterion was based on the number of procurement practitioners and purchasing
staff. All the employees of the 30 public organizations were included in the study, giving 120
respondents.
According to Cochran (1977) a sampling frame is a complete list of all the members of the
population that we wish to study to randomly select an appropriate number as representatives
of the population whom you can invite to take part in the research. Failure to use a sampling
frame restricts to less satisfactory forms of samples, which cannot be randomly selected be-
cause not all individuals within that population will have the same probability of being se -
lected for the sample.
3.4.1 Sample size and sampling techniques
The purpose of sampling is to draw conclusion from a sample based on selected features and
attributes that represents the whole population. The sampling strategy used in this study is
probability and purposive sampling strategy, which ensured that the key respondents partici-
pated in the study. In this study, a purposive sampling technique was adopted where all the
120 staff in 30 public organization including Expert, senior expert, and head of department
unit staff, who were directly involved in either finance or procurement were issued with a
self-administered questionnaire. For the purpose of this study, all the respondents had suffi-
36
cient knowledge on how supplier evaluation criteria could influence the organizational per-
formance.
3.4.2 Simple Random Sampling
This technique assures that each element in the population possess an equal chance to appear
in the sample size. Simple random sampling allows the study to select the sample size with-
out any bias. The sample was representative of the whole population. The choice of this tech-
nique is based on the assumption that each target population possesses the same/similar char-
acteristics Kothari, (2012).
The sample size determination that the researcher was used is the sample size determined us-
ing Fisher’s exact test Fishers et al, (1998) formula for 95% confidence interval shown be-
low;
2 2
z pq z pq
n=
d
2 ………………………………….... Equation 1n= d
2
Where; n = sample size for infinite population Z = 1.96 (Confidence level at 95%)
p = estimated proportion with desired characteristics estimated at 95% (0.95) q = 1-p, d =

precision of the estimate at 5% (0.05)
2
1.96 o .95 × 0.05
n=
0.05
2 = 73
2
1.96 o .95 × 0.05
n= 2
0.05
The adjusted sample size for the finite population
n
n 1=
1+
( n−1 ) ……………………………………Equation 2
N
Where; n 1 = adjusted sample size, N = target population size
73 73
n 1= n=
1+
(73−1 ) = 30
1+
( 73−1 )
52 52
37
3.5. Sources of Data
There are two types of data, namely primary and secondary data. Researcher might use ei-
ther both or one of the types of data depends on the research type and data collect by re-
searcher Saunders et.al, (2007). For this research, the researcher was used both primary
and secondary data.
3.5.1 Primary data sources
For this research purpose primary data was collected through standardize questionnaire.
A researcher originates primary data for the specific purpose of addressing the problem at
hand Malhotra and Birks, (2006).
3.5.2 Secondary data sources
For secondary data previous studies, books, journals, manuals and reports related to sup-
plier evaluation and procurement performance was used. Those data were served as a ref-
erence and guide.
3.6 Methods of Data collection
As mentioned previously data was collected from primary and secondary sources. The
primary data was collected by using closed ended questionnaires by distributing randomly
selected public organization procurement staffs of Dire Dawa public organizations those
who have direct relation with supplier evaluation and procurement activities. The re-
searcher was used secondary sources as a reference and guide include previous studies,
books, journals, manuals and reports.
3.6.1. Structured Questionnaire
A questionnaire is simply a tool for collecting and recording information about a particular is-
sue of interest Adams et al., (2007). Therefore, the study questionnaires mainly had a list of
questions, clear instructions, and space for answers or administrative details. They all pre-
pared questionnaires that were related to the objectives of the research, and they clarified the
findings of the study.
3.7. Data analysis
The data was collect using a questionnaire. The researcher developed, and prepares the data
collection instrument for different targeted respondents. The questionnaires, was adminis-
tered to the respondents in order to collect the primary data through questionnaires.
38
3.7.1. Descriptive analysis
Descriptive analysis refers to an analysis that summarizes data in a table, graphic, or numeri -
cal form Anderson et al., (2016). The descriptive statistics explain the characteristics of the
sample, such as mean, standard deviation, range, frequency, percentage, and so on. In this
study, the researcher used descriptive statistics to explain the demographics of the respon-
dents, including the age of the respondents, gender of the respondents, education level, work
experience of the respondents, positions, etc. The descriptive statistics as preliminary data
analysis was also is used for the main variables used before running the regression model.
3.7.2. Inferential analysis
Inferential statistics are statistics that involve advanced multivariate and statistical analysis in
the study. For this study, the inferential analyses to be used include factor analysis and re-
gression analysis.
3.7.3. Regression Analysis
Multiple linear regression analysis was used to determine the relationship between supplier
evaluation and procurement performance. The presence of normal distribution among vari-
ables is required for multiple leaner regressions Anderson et al., (2016). The overall esti-
mated regression models concerning specific objectives were as follows
Y = β 0 + β 1 X 1 +β 2 X 2 +β 3 X 3 +β 4 X 4 +ε
…………………………equation (1)
''Y'' represents procurement performance of public organization in Dire Dawa.
The coefficient for Xi is 0 = constant I (I = 1, 2, 3, 4).
X1
= supplier's financial stability
X2
= After-Sale Services of Suppliers
X3
=suppliers' technical capacity
X4
=suppliers, organizations, culture
ε = error term
39
4. Reliability and validity of data
4.1. Reliability of Data collection instruments
The questionnaire was self-administered and is the only source of primary information for the
study. The respondents were providing an essential contribution to the study.
Reliability refers to a measurement that supplies consistent results with equal values Blum-
berg et al., (2005). It measures consistency, precision, repeatability, and trustworthiness of re-
search Chakrabartty, (2013). It indicates the extent to which it is without bias (error free), and
hence assures consistent measurement across time and across the various items in the instru-
ments (the observed scores).
In quantitative research, reliability refers to the consistency, stability, and repeatability of re-
sults. That is, the result of a researcher is considered reliable if consistent results have been
obtained in identical situations but different circumstances. However, in qualitative research,
it is referred to as when a researcher’s approach is consistent across different researchers and
different projects Twycross& Shields, (2004).
In addition to ensuring the validity of the study, the researcher was receiving comments from
the advisor and other expertise on the questionnaire and the overall research methodology.
Furthermore, a pilot taste was made before distributing the whole questionnaire to the com-
pletely respondent population. Small amounts of the questionnaire were distributed for the
public organization in Dire Dawa.
The major objective of the pilot taste was to get feedback on the questionnaire's ways of
preparation, wording, coherence, and any other valuable comments, and to incorporate any
important comments into the final questionnaire. Reliability refers to the extent to which your
data collection techniques or analysis procedures was yield consistent findings Saunders et
al., (2007). Dunn (2001) also defines reliability as a measure's stability or consistency across
time. The data reliability test is measured by using Cronbach's alpha. Cronbach's Alpha was
also be calculated as part of the reliability test to assess how valid the results was and should
produce similar generalized results if the sample size were increase Field, (2006).
The alpha value ranges from a maximum of 1.0 for a perfect score to a minimum of zero. A
good measure of the alpha should be 0.70 or higher Neuman, (2007). According to Wasiam
and Barry (2010), scales exhibiting a coefficient alpha between 0.80 and 0.96 are considered
to have very good reliability, those between 0.70 and 0.80 are considered to have good relia-
40
bility, and an alpha value between 0.60 and 0.70 indicates fair reliability. When the coeffi-
cient alpha is below 0.60, the scale has poor reliability.
Table 3.2 Cronbach’s alpha
S. No Variables Cronbach’s Alpha value Number of items
1 Procurement performance 0.850 3
2 Financial stability 0.807 6
3 After sales service 0.898 5
4 Technical capacity 0869 5
5 Organizational culture 0.777 6
Source: Author (2022)
4.2 Validity of Data Collection Instrument
The extent to which an instrument measures what it claims to measure is frequently defined
as validity Blumberg et al., (2005). of a research instrument assesses the extent to which the
instrument measures what it is designed to measure Robson, (2011). The results are truthful
to the degree. Therefore, it requires a research instrument (questionnaire) to, correctly mea-
sure the concepts under the study Pallant (2011). It encompasses the entire experimental con-
cept and establishes whether the results obtained meet all of the requirements of the scientific
research method.
The extent to which the requirements of scientific research methods were followed during the
process of generating research findings is referred to as research validity. It is a compulsory
requirement for all types of studies Oliver, (2010). In quantitative research, validity is the ex-
tent to which any measuring instrument measures what it is intended to measure Thatcher,
(2010). Nevertheless, in qualitative research, it is when a researcher uses certain procedures
to check for the accuracy of the research findings Creswell, (2014). It is not a property of the
instrument, but of the instrument’s scores and their interpretations.
It is best, viewed as a hypothesis for which evidence is, collected in support of proposed in-
ferences Messick, (1989). Lee J. Cronbach and Paul E. Meehl first introduced the issue of va-
lidity in quantitative research in the mid-20th century in relation to the establishment of the
criteria for assessing psychological tests Cronbach &Meehl, (1955).
41
In research, validity has two essential parts: a) internal (credibility), and b) external (transfer -
ability). Internal validity indicates whether the results of the study are legitimate because of
the way the groups were selected, data were recorded or analyses were performed. It refers to
whether a study can be replicated Wasis, (2007). To assure it, the researcher can describe ap-
propriate strategies, such as triangulation, prolonged contact, member checks, saturation, re-
flexivity, and peer review. External validity shows whether the results given by the study are
transferable to other groups of interest Last, (2001).
A researcher can increase external validity by: i) achieving representation of the population
through strategies such as random selection, ii) using heterogeneous groups, iii) using non-re-
active measures, and iv) using precise descriptions to allow for study replication or replicate
study across different populations, settings, etc. It is alarming whether a researcher measures
the right concept or not Shekharan&Bougie, (2010). Validity requires that an instrument be
reliable, but an instrument can be reliable without being valid Kimberlin&Winterstein,
(2008).
Statistical validity is also used to measure the validity of the research using correct statistical
procedures and instruments Neuman, (2007). To ensure the statistical validity of the study,
the researcher was collected quantitative data using a survey question and analyze the data
using the correct statistical instruments like descriptive statistics, inferential statistics, correla-
tion analysis, and regression analysis in order to see the relationship between the variables
and arrive at a concrete conclusion. The researcher also test validity using the KM bartleys
test all the matrics shows more than 7 km bartlet test
KMO and Bartlett's Test Financial After sales Technical Organiza- Procurement
stability services capacity tional cul- performances
ture
Kaiser-Meyer-Olkin Measure
of Sampling Adequacy. 0.819 0.817 0.798 0.697 0.709
Bartlett's Test of Sphericity
Approx. Chi-Square 302.397 500.343 324.505 243.097 163.123
Df
15 10 10 15 3
Sig.
0.00 0.00 0.00 0;00 0.00
42
5. Ethical considerations
In the course of this study, all requirements of the selected organization and the research pro-
cedures of the Civil Serves University were properly adhered. All participants were informed
about the purpose of the research and their consent was secured before the beginning of the
data gathering process. The researcher was assured the respondents that their identities and
those of their organizations were protected
CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND INTERPRETATION
The main objective of this study was to examine Effects of supplier evaluation on procure-
ment performances of public organization in Dire Dawa. In this regard, this chapter presents
the results and findings of the study as collected from the sample population. The data was
gathered exclusively from questionnaire as the research instrument. The questionnaire was
designed in line with the objectives of the study. To enhance quality of data obtained, Likert
type questions were included whereby respondents indicated the level of agreement to which
the variables were practiced in a five-point Likert scale. Coded responses were entered into
Statistical Package for the Social Sciences (SPSS) version 21, for data analysis. The data has
been presented by tabulation, and some figures. The chapter covers respondents‟ general in-
formation based on demographic information and findings based on how the research ques-
tions/objectives affect procurement performance in Public Procurement and Property Dis-
posal Services of Dire Dawa public organizations and the results are presented and inter-
preted.
4. Demographic characteristics of the respondents and response rate
In this section, the researcher analyzed and discussed demographic information of the respon-
dents, which are relevant to the study was, summarized on the tables here below and the fre-
quencies and percentages are calculated and described.
4.1 Demographic characteristics of the respondents
4.1.1Gender profile of the respondents
Gender is an important demographic variable in this study because it enables the researcher
to, find out whether the perception of respondents towards supplier evaluation and selection
is, influenced by their gender. The researcher analyzed the gender of respondents and the
43
feedback was, documented as shown in the table and figures below; Table 4.1 Gender of the
male
Gender of the respondentsmale
43%
female
57%
respondents

Figure 4.1 Gender of the respondents
4.1.2 Educational Level of the Respondents
The education levels of the respondents were, summarized in the table 4.1.2 here below.
Table 4.2Educational Level of the Respondents
Education level Frequency Percent Percent Cumulative Percent
Diploma 8 2.5 2.5 2.5
Degree 107 85.0 85.0 87.5
Master’s Degree & above 5 12.5 12.5 100.0
Total 120 100.0 100.0
Table 4.3 relevant work experience of Respondents
44
Valid Per- Cumulative
experiences Frequency Percent
cent Percent
<2 20 16.7 16.7 16.7
2-5 10 8.3 8.3 25.0
6-10 years 60 50.0 50.0 75.0
>10 years 30 25.0 25.0 100.0
Total 120 100.0
As it is shown in table 4.3 above from the total valid respondents, 16.7% (20 respondents) of
them have two and below two years of experience, 8.3% (10 respondents) of the respondents
have two to five years’ work experience, (50.0%) 60 respondents have six to ten years work
experience and the rest 30 of them which are 25.0% of them have above 10 years' work expe-
rience.
In general, it can be seen that the majority of the respondents has spent more than 6 to ten
years working in the procurement and purchasing related department and from this figure we
understand that the information obtained from them is reliable or dependable since they have
good knowledge and experience about the concept of procurement performance.
4.1.3 Position of the Respondents
The fig 4.4below depicts the distribution and frequency of respondents according to their po-
sition in the organization.
45
posiosition of the Respondents
Series1
senior expert, 96
Expert, 18 head of department

unit, 6
Fig 4.4 Position of the Respondents
As it is shown in table 4.4above, from the total valid respondents, 15.0% (18 respondents) of
them were experts, 80.0% (96 respondents) of them were senior expert, 5.0% (6 respondents)
of them were head of department and the majority of the respondents 48% were senior ex-
perts. This implies that the majority were able with adequate designation authority. Thus, it is
clear that the experienced and educated respondents could understand the problems in pro-
curement related activities and give sufficient and correct information that could contribute
through the validity of this study.
4.2. Response Rate
The total questionnaire distribute were 120 for procurement and purchasing staffs, selected
from 30 public organizations which are located only in Dire Dawa and of which all 120
(100%) were returned from the respondents.
4.3 Survey Results
The following descriptive statistical analysis shows the conceptual framework adopted for
this study. Particularly, the analysis demonstrates the research questions, which are related
with supplier evaluation are, supplier’s financial stability, suppliers after sales services, sup-
plier’s technical capacity and supplier organizational culture. To study the effect of supplier
46
evaluation on procurement performance, the respondents were requested to indicate the ex-
tent to which application of the supplier evaluation criteria has influence on Procurement Per-
formance in their organization. To make discussions the study used mean, frequency and per-
centile. The selected Dire Dawa public organization respondents were asked to indicate the
extent to which the effect of supplier evaluation on procurement performance in their organi-
zation in five scales Likert (strongly disagree= 1, disagree = 2, neutral= 3, agree= 4 and
strongly agree = 5).
4.3.1 Effect of Supplier financial stability on procurement performance
The researcher sought to know the effect of supplier financial stability on procurement per-
formance and this was consistent with research objective one. The finding was illustrated on
table 4.5 below.
47
Table 4.5 Response summary on financial stability
N Questions Scale Fre- Per- Cumulative Me

o. quenc cent percent an
y
1 Annual turnover of a supplier influence on Strongly 10 8.3 8.3 3.3
procurement performance disagree 083
Disagree 23 19.2 27.5
Neutral 35 29.2 56.7
Agree 24 20 76.7
Strongly 28 23.3 100
agree
2 Profitability level of a supplier effect on pro- Strongly 4 3.3 3.3 2.9
curement performance disagree 4
Disagree 28 23.3 26.7
Neutral 65 54.2 80.8
Agree 17 14.2 95
Strongly 6 5 100
agree
3 Availability of supplier credit facility effect Strongly 2 1.7 1.7 3.3
on procurement performance disagree 75
Disagree 29 24.2 25.8
Neutral 23 19.2 45
Agree 54 45 90
4 Poor cash flow management of supplier ef- Strongly 3 2.5 2.5 3.4
fect on procurement performance disagree 667
Disagree 8 6.7 9.2
Neutral 51 42.5 51.7
Agree 46 38.3 90
Strongly 12 10 100
agree
5 Not understanding of supplier total cost ef- Strongly 3 2.5 2.5 30.
Disagree 36 30 32.5
Neutral 45 37.5 70
Agree 29 24.2 94.2
Strongly 7 5.8 100
agree
6 Inadequate financial capacity of supplier ef- Strongly 1 0.8 0.8 3.4
Disagree 17 14.2 15
Neutral 40 33.3 48.3
Agree 52 43.3 91.7
Strongly 10 8.3 100
agree
48
These results are in line with research done by Mohammed Ali (2017) effects of supplier
evaluation on procurement performance the case of public procurement and property disposal
service, Mutai &Okello (2015) Suppliers‟ financial stability directly influences their ability
to supply what the organization needs. However, the effect would be significant for organiza-
tions that deal with physical products.
A study done by Oyando (2014) financial ability of the supplier affects county government
supplies to a greatest extent, is essential that procurement officers get to assess the financial
ability of the supplier firm any tender is awarded. Financial appraisal in the procurement
process is to analyze a supplier’s financial position and determine the level of risk that it
would present to the client having regard to the contract requirements and financial ability of
suppliers provides information that enables sound decisions to be made either when sourcing
suppliers or when evaluating tenders.
4.3.2 Effect of after sales services of a supplier’s and its effect on procurement performance
The researcher sought to know the effect of supplier after sales services on procurement per-
formance and this was consistent with research objective two. The finding was illustrated on
table 4.6 below.
Table 4.6 Response summary on after sales services
49
No Question Scale fre- Percent Cumula- Mean
quency tive per-
cent
After sale employees give prompt service strongly 20 16.7 16.7 2.7667
disagree
Disagree 18 15 31.7
 Neutral 64 53.3 85
1 Agree 6 5 90
strongly 12 10 100
agree
2 The service provider shows a sincere interest in strongly 4 3.3 3.3 3.025
solving customer problems disagree
Disagree 22 18.3 21.7
Neutral 69 57.5 79.2
Agree 17 14.2 93.3
strongly 8 6.7 100
agree
3 The customer service branches of the company strongly 9 7.5 7.5 2.6917
should be located in convenient places disagree
Disagree 39 32.5 40
Neutral 57 47.5 87.5
Agree 10 8.3 95.8
The service provider needs to have up-to-date after strongly 3 2.5 2.5 2.8583
sale equipment disagree
4 Disagree 50 41.7 44.2
Neutral 34 28.3 72.5
Agree 27 22.5 95
strongly 6 5 1000
agree
The company customer call service personnel strongly 15 12.5 12.5 2.425
should be willing and responsive to help customers disagree
5 Disagree 44 36.7 49.2
Neutral 57 47.5 96.7
Agree 3 2.5 99.2
strongly 1 0.8 100
agree
The study sought to evaluate after sales services of a supplier’s and its effect on procurement
performance of public organization in Dire Dawa. As it summarized in the above table, a 21.7
% of respondents with a mean value of the responses of 2.8667responds of an agreement and
strong agreement with the evaluation based on after sale employees that give prompt service
influence on procurement performance.
Accordingly,43.3% of the respondents say that, the service provider that shows a sincere in-
terest in solving customer problems had an influence on procurement performance of their or-
ganizations and which had a mean value of 3.1583 were reported in the above analyses.
According to the response given by 50% of the respondents agreed and strongly agreed on
evaluation based on after sales service that says the customer service branches of the com-
pany should be located in convenient places had a mean value of 3.1500. According to the
50
findings on the frequencies, 55% of the respondents reported agreement and strong agree-
ment on evaluation based on the service provider needs to have up-to-date after sale equip-
ment effect on procurement performance of the public organizations of Dire Dawa which,
had a mean value of 3.3833 of a total response was made.
A 49.1% of the respondents respond to the evaluation based on the effect of the company
customers call service personnel should be waling and responsive to help customers on pro-
curement performance showed a mean of 3.3250 that was agreed and strongly agreed influ-
ence to the procurement performance of the public organization.
The mean value 2 and less indicated low effect on procurement performance, mean value
greater than 2 and less than 3 indicate moderate effect, mean value greater than 3 indicate
high effect of supplier after sales services on procurement performance.
In general, from the analysis shown above, all the respondents on average had high effect re-
sponses on the question of the evaluation related with the effect of supplier after sales ser-
vices on procurement performance of public organization in Dire Dawa except the responses
made on that say after sale employees give prompt service.
supplier’s service provider shows a sincere interest in solving customer problems, customer
service branches of the company should be located in convenient places, the service provider
needs to have up-to-date after sale equipment and the company customer call service person-
nel should be waling and responsive to help customers were the major effects on procurement
performance of public organization in Dire Dawa.
51
4.3.3. Technical capacity of supplier and its effect on procurement performance
According to Wallace (2011), supplier technical capability assessment is a detailed study to

ensure that a supplier is soundly designed, appropriately engineered and follows accepted
standards. Those issues range from dealer to supplier, however, anyways, the emphasis is at
the inputs wished for the idea and the resulting outputs of goods & offerings. Appraisal deter-
mines whether the pre-requirements of success provider had been protected and properly se-
lections were made about area, plant capability, raw substances necessities and other such
factors as availability of required professional, technicians and workers.
The researcher sought to know the effect of supplier technical capacity on procurement per-
formance and this was consistent with research objective three. The findings were illustrated
on table 4.7 below.
Table 4.7 Response summary on technical capacity
N Question Scale frequency Percent Cumulative per- Mean

cent
o
Skilled labor force of supplier influence strongly disagree 0 19.2 19.2 3.35
on procurement performance
1 Disagree 23 46.7 65.8
Neutral 56 14.2 80
Agree 17 20 100
strongly agree 24 100 19.2
2 professional skills of supplier employees strongly disagree 0 0 0 3.0333
influence on procurement performance
disagree 46 38.3 38.3
neutral 44 36.7 75
Agree 10 8.3 83.3
strongly agree 20 16.7 100
3 Standardized service level of supplier in- strongly disagree 6 5 5 2.95
fluence on procurement performance
disagree 52 43.3 48.3
neutral 14 11.7 60
Agree 38 31.7 91.7
Total 120 100
4 operation and maintenance skills of sup- strongly disagree 39 32.5 32.5 2.1667
plier employees influence on procure-
ment performance
disagree 42 35 67.5
52
neutral 19 15.8 83.3
Agree 20 16.7 32.5
strongly agree 0 0
Supplier social networking influence on strongly disagree 13 10.8 10.8 2.8417

procurement performance
Disagree 35 29.2 40
Neutral 32 26.7 66.7
5 Agree 38 31.7 98.3
The study sought to evaluate technical capacity of supplier’s and its effect on procurement
performance of public organization in Dire Dawa. As it summarized in the above table,
34.2% of respondents agreed and strongly agreed on the evaluation based on skilled labor
force of supplier can influence procurement performance, with a mean value of the responses
of 3.3500.
Accordingly, 25% of the respondents say that, the employees should have professional skills
had an influence on procurement performance of their organizations and which had a mean
value of 3.0333 responses reported in the above analyses.
According to the response given by 40% of the respondents agreed on evaluation based on
Standardized service level have a mean value of 2.9500.
According to the findings on the frequencies, 16.7% of the respondent’s agreement on evalu-
ation based on the operation and maintenance skills of supplier employees influence on pro-
curement performance, which had a mean value of 2.1667 of total responses, made.
A 33.4% of the respondents respond to the evaluation based on the effect of Supplier needs to
develop social networking on procurement performance showed a mean of 2.8417 that was
agreed and strongly agreed influence to the procurement performance of the public organiza-
tion.
In general, the cumulative result of the entire question under the technical capacity effects,
from the analysis shown above, all the respondents on average had high effect responses on
the question of the evaluation related with the supplier’s technical capacity and its effect on
53
procurement performance of public organization in Dire Dawa influence on procurement per-
formance.
The employees should have professional skills, Standardized service level and employee’s
needs to have a necessary operation and maintenance skills were the major effects on pro -
These results are in line with research done by Julian nyaboke kiriama (2017) Suppliers‟
technical capacity directly influences their ability to supply what the organization needs
4.3.4 Supplier’s organizational cultures and its effect on procurement performance
The researcher sought to know the effect of supplier organizational culture on procurement
performance and this was consistent with research objective four. The findings were, illus-
trated on table 4.8 below.
Table 4.8 Response summary on organizational culture
54
N Question Scale fre- Percent Cumulative per- Mean
quency cent
o
The glue that holds the organization strongly dis- 0 19.2 19.2 3.1833
together must be loyalty and mutual agree
trust
Disagree 23 46.7 65.8
1 Neutral 56 14.2 80
Agree 17 20 100
strongly agree 24 100 19.2
Total 120 19.2
The organization defines success on strongly dis- 0 0 0 3.3
the basis of winning in the market- agree
place and outpacing the competition
disagree 46 38.3 38.3
2 neutral 44 36.7 75
agree 10 8.3 83.3
Total 120 100
The organization defines success on strongly dis- 6 5 5 3.3333
the basis of efficiency, dependable agree
delivery, smooth scheduling and
low-cost production
disagree 52 43.3 48.3
3 neutral 14 11.7 60
agree 38 31.7 91.7
The organization defines success on strongly dis- 39 32.5 32.5 3.2167
the basis of having the most unique agree
or newest products, it is product
leader and innovators
Disagree 42 35 67.5
4 Neutral 19 15.8 83.3
Agree 20 16.7 32.5
strongly agree 0 0
Total 120 100 1000
The management style in the orga- strongly dis- 13 10.8 10.8 3
nization is characterized by security agree
of employment, conformity, pre-
dictability, and stability in relation-
ships.
Disagree 35 29.2 40
Neutral 32 26.7 66.7
5 Agree 38 31.7 98.3
The glue that holds the organization strongly dis- 13 10.8 10.8 3.3083
together must be innovation and de- agree
velopment
Disagree 35 29.2 40
Neutral 32 26.7 66.7
6 Agree 38 31.7 98.3
total
55
The study sought to evaluate supplier’s organizational culture and its effect on procurement
performance of public organization in Dire Dawa. As it summarized in the above table, a
34.2% of respondents with a mean value of the responses of 3.1833 responds of an agreement
and strong agreement of the evaluation based on the glue that holds the organization together
must be loyalty and mutual trust influence on procurement performance.
Accordingly, 46.7% of the respondents say that, the organization defines success, on basis of
winning in the marketplace and outpacing the competition had an influence on procurement
performance of their organizations and which had a mean value of 3.3000 responses reported
in the above analyses.
According to the response given by 51.7% of the respondents agreed on evaluation based on
the organization defines success on the basis of efficiency, dependable delivery, smooth
scheduling and low-cost production have a mean value of 3.3333.
According to the findings on the frequencies, 45% of the respondent’s agreement on evalua-
tion based on the organization defines success basis of having the unique or newest products,
it is product leader and innovator, which had a mean value of 3.2167 of total responses,
made.
A 25.8% of the respondents respond to the evaluation based on the effect of the management
style in the organization is characterized by security of employment, conformity, predictabil-
ity, and stability in relationships. On procurement, performance showed a mean of 3.0000
that was agreed and strongly agreed influence to the procurement performance of the public
organization.
A 51.7% of the respondents respond to the evaluation based on the effect of the glue that
holds the organization together must be innovation and development on procurement perfor-
mance showed a mean of 3.3083 that was agreed and strongly agreed influence to the pro-
curement performance of the public organization.
In general, from the analysis shown above, all the respondents on average had high effect re-
sponses on the question of the evaluation related with the supplier’s organizational culture
and its effect on procurement performance of public organization in Dire Dawa.
56
The glue that holds the organization together must be loyalty, mutual trust, the organization
defines success on the basis of winning in the marketplace, and outpacing the competition,
the organization defines success on the basis of efficiency, dependable delivery, smooth
scheduling and low-cost production. The organization defines success on the basis of having
the unique or newest products, it is product leader, and innovator, the management style in
the organization is characterized by security of employment, conformity, predictability, and
stability in relationships. The glue that holds the organization together must be innovation
and developments were the major effects on procurement performance of public organization
in Dire Dawa.
These results are in line with research done by Mary G. Porter (2019) organizations with a
dual culture, such as adhocracy and clan; do significantly influence SCI and firm perfor-
mance.
4.4 Tests and Analysis to evaluate the effects of supplier evaluation on procurement perfor-
mance
In this study the researcher, used inferential analysis is concerned with the tests of signifi-
cance for normality in order to determine the validity of data. The data was sorted to group
questions according to applicable constructs under test. Finally, correlation and multiple re-
gression analysis were performed. Tests and analysis of the data are presented below:
4.4.1 Normality Test
The data would be distributed symmetrically around the center of all scores. As such, if we
drew a vertical line through the center of the distribution then it should look the same on both
sides. This is known as a normal distribution and is characterized by the bell-shaped curve.
This shape implies that the majority of scores lie around the center of the distribution so the
largest bars on the histogram are all around the central value Field, (2006).
In a normal distribution, the values of skewness are zero. If a distribution has values of skew
above or below 0 then this indicates a deviation from normal Field, (2009). As we have seen
from the below table, the skewness approaches or around to Zero and normal distribution fig-
ure 4.8also show the data is almost normal. All variables were found to be normal.
Table 4.9Tests of normality of Procurement
57
Statistics
PP FS AS TC OC
Skewness 0.13 -0.406 0.531 0.935 0.274
Std. Error of Skewness 0.221 0.221 0.221 0.221 0.221
Kurtosis -1.006 -0.723 0.045 -0.74 -0.714

Std. Error of Kurtosis 0.438 0.438 0.438 0.438 0.438
Skewed distributions are not symmetrical and instead the most frequent scores (the tall bars
on the graph) are clustered at one end of the scale. A skewed distribution can be either posi-
tively skewed (the frequent scores are clustered at the lower end and the tail points towards
the higher or more positive scores) or negatively skewed (the frequent scores are clustered at
the higher end of and the tail points towards the lower more negative scores) Field, (2005).
Figure 4.5Normal distribution of the data
58
4.4.2 Correlations Analysis
The correlation of the variable is measured by Pearson correlation coefficient. The result of
the Pearson correlation is presented on the following tables and interpreted, by the guideline
suggested by Field (2006); he mentioned that the correlation coefficient is shown the relation-
ship between the predictor and outcome variable. The relationship is measured in the range
of 0.1 to 0.29 is weak relationship, 0.30 to 0.49 is moderate, above 0.50 shows strong rela-
tionship; while the positive and negative sign is for the direction of their relationship Field,
(2006).
Table 4.9 Correlations table
Correlations
PP FS AS TC OC
PP Pearson Correlation 1 .797** .822** .714** .716**
Sig. (2-tailed) 0 0 0 0
N 120 120 120 120 120

** ** **
FS Pearson Correlation .797 1 .748 .520 .608**
Sig. (2-tailed) 0 0 0 0
N 120 120 120 120 120

** ** **
AS Pearson Correlation .822 .748 1 .783 .605**
Sig. (2-tailed) 0 0 0 0
N 120 120 120 120 120

TC Pearson Correlation .714** .520** .783** 1 .496**
Sig. (2-tailed) 0 0 0 0
N 120 120 120 120 120

** ** ** **
OC Pearson Correlation .716 .608 .605 .496 1
Sig. (2-tailed) 0 0 0 0
N 120 120 120 120 120
**. Correlation is significant at the 0.01 level (2-tailed).
Correlation coefficient was used to determine the strength of relationship between the depen-
dent (Procurement Performance) and independent variables (supplier’s financial stability,
supplier after sales services, suppliers' technical capacity and supplier organizational culture).
59
It is a parametric technique, which gives a measure of the strength of association between two
variables.
As it can be shown in the above correlation matrix, each variable is perfectly correlated with
itself. Procurement performance, is positively and significantly, related with supplier’s finan-
cial stability with a correlation coefficient of= 0.797, P<0.01.
There is a positive correlation and significantly relation between procurement performance

and supplier after sales services with a correlation figure of 0.822, P<0.01. The correlation
between procurement performance and supplier technical capacity is significantly related
with a correlation coefficient of =0.714, P<0.01, there is also a positive correlation and sig-
nificantly related between procurement performance and supplier organizational culture with
a correlation coefficient of =0.716, P<0.01. This shows that there was positive correlation or
strong relationship between procurement performance, supplier financial stability, suppliers
after sales services, supplier technical capacity and supplier organizational culture.
4.4.3 Multicollinearity Assumptions
Multicollinearity exists when there is a strong correlation between two or more predictors in a
regression model Saunders et.al, (2007). There should be no perfect linear relationship be-
tween two or more the predictors. So, the predictor variables should not correlation too highly
Ho, (2006). If there is perfect Collinearity between predictors, it becomes impossible to ob-
tain unique estimates of the regression coefficients because there are an infinite number of
combinations of coefficients that would work equally well. Perfect Collinearity is rare in real-
life data, but less than perfect Collinearity is virtually unavoidable Field, (2006). This re-
search data Multicollinearity assumption was checked by the Person Correlation Coefficient
and Collinearity Statistics.
60
A. Assumption Test using Pearson Correlation Coefficient
The first assumption is checking the value of Pearson correlation coefficient among predic-
tor’s variables. If Pearson correlation coefficient value among predictors areis below <0.9,
there is no substantial correlation between predictor variables so there is no multi-Collinearity
problem Field, (2006). As shown in table 4.8 above, all the Pearson correlation coefficient
values between predictors are below 0.90. Therefore, it has satisfied multi-Collinearity as-
sumption and do not have Collinearity problem so that it is able to obtain unique estimates of
the regression coefficient.
B. Assumption Test using Collinearity Statistics
The other way of checking the Multicollinearity assumption is that by looking SPSS analysis
output correlation table of Collinearity statistics value of Tolerance and Variance Inflation
Factor /VIF Field (2006). The Tolerance column value below 0.02 and VIF value above 10
pose a Multicollinearity problem. The analysis indicates that there is the minimum tolerance
value of 0.573, which is above 0.02, and the maximum VIF value is 4.489, which is below
10. Having this, the Tolerance and VIF value is shown in coefficient below table 4.4.3 and
the analysis indicate that there is no Multicollinearity problem.
Table 4.10 Collinearity statistics value
Coefficients
Model Collinearity Statistics
Tolerance VIF
1 Financial stability 0.389 2.572
After sales service 0.223 4.489
Technical capacity 0.374 2.676
Organizational culture 0.573 1.744
Dependent Variable: Procurement performance
Source: regression output (2022)
4.4.4 Auto-correlation Assumption /Durbin–Watson test/
It is the assumption of independent error tenable or reasonable test. Durbin-Watson used to

test for serial correlation between errors. The test statistic value can vary between zero and
four, with a value of two meaning the residuals are uncorrelated. A value greater than 2 indi -
cates a negative correlation between adjacent residuals, whereas a value below two indicates
61
a positive correlation Field, (2006). Similarly, Ott and Longnecker (2001) defines when there
is no serial correlation, the expected value of the Durbin–Watson test statistic d is approxi-
mately 2.0; positive serial correlation makes d < 2.0 and negative serial correlation makes d >
2.0. Although, values of d less than approximately 1.5 (or greater than approximately 2.5)
lead one to suspect positive (or negative) serial correlation.
If serial correlation is suspected, then the proposed multiple regression models are inappro-
priate and some alternative must be sought. Referring this and the model summary table
4.1.1, the Durbin-Watson value of this research is 2.055. Therefore, the auto-correlation as-
sumption has almost certainly met, since it falls between 1.5 and 2.5. Furthermore, the corre-
lation relation between the variables also is positive correlation since Durbin-Watson value
below 2.5 Ott and Longnecker, (2001).
4.4.5. Model summary
Model summary table describes the overall model whether the model is successful in predict -
ing dependent variables. It gives a value of R square, which measure of how much of the
variability in the outcome is accounted for the predictors. In addition, this summary table tells
us whether auto-correlation assumption is satisfied or not through Durbin Watson value
Field, (2006).
Table 4.11 Model Summary

Model Summary
Model R R Adjusted R Std. Error Change Statistics Durbin-

Square Square of the Esti- Watson
mate R Square F df1 df2 Sig. F
Change Change Change
1 .901 .811 .805 .46905 .811 123.641 4 115 .000 2.055
a. Predictors: (Constant), OC, TC, FS, AS
b. Dependent Variable: PP
In the above table 4.11, multiple correlation coefficient R of 0.901 indicates that the correla-
tion among the independent and dependent variables is a strong positive relationship; as a re-
sult, working on those selected factors have positive impact on procurement performance of
the organization. The four independent variables that were studied, explain only 81.1% of the
supplier evaluation that are influence procurement performance in Dire Dawa public organi-
62
zation as represented by the R2. This means that other supplier evaluation criteria not studied
in this research contribute 18.9% affecting procurement performance in Dire Dawa public or-
ganization. Therefore, further research should conduct to investigate the other effects of sup-
plier evaluation (18.9%) that influence the performance of procurement processes in Dire
Dawa public organization. The adjusted R Square in the table is 0.805 indicating that in case
where the study population could have been, changed the study results could have varied by
19.5% from the current results. Therefore, the study results are 80.5% valid as shown by the
adjusted R square value.
4.4.6. Analysis of variance/ANOVA/test
ANOVA test was conducted to; test the significance of the effect of supplier evaluation on
procurement performance. The results were as presented in table 4.11
Table 4.12 ANOVA results
ANOVA
Model Sum of Squares df Mean Square F Sig.
1 Regression 108.809 4 27.202 123.641 0

Residual 25.301 115 0.22
Total 134.11 119
a. Dependent Variable: PP
b. Predictors: (Constant), OC, TC, FS, AS
The ANOVA test result of procurement performance is indicated on above table 4.12, it is
noticed that F value 107.510 is significant at P<0.001 levels. Therefore, from the result, it is
be concluded that the collective effect of supplier’s financial stability, supplier after sales ser-
vices, technical capacity of a supplier and supplier organizational culture is statistically sig-
nificant.
4.4.7. Regression Analysis
Multiple regression analysis was conducted to establish the effect of supplier evaluation on
procurement performance of Dire Dawa public organization. The results were as presented in
table 4.12. Standardized regression coefficient (Beta) is the estimated coefficient indicating
the strength of relationship between an independent variable and dependent variable ex-
pressed on a standardized scale where higher absolute values indicate stronger relationships
(range is from -1 to 1) Wasiam and Barry, (2010).
63
Table 4.13 Regression Coefficients
Coefficients
Model Unstandardized Coefficients Standardized Coefficients T Sig.
B Std. Error Beta

1 (Constant) -1.45 0.227 -6.379 0
FS 0.55 0.099 0.36 5.543 0
AS 0.303 0.117 0.222 2.589 0.011
TC 0.283 0.082 0.23 3.472 0.001
OC 0.349 0.075 0.248 4.636 0
Dependent Variable: PP
Based on table 4.13, the regression coefficient result table, we can formulate the regression
equation (as per Model: PP=α+ β1FS+ β2AS + β3TC+ β4OC + ε) as,
PP=−1.4500+ 0.360 FS+ 0.222 AS+ 0.230TC +0.248 OC …………………Equation 5

PP=−1.4500+ 0.360 FS+ 0.222 AS+ 0.230TC +0.248 OC
From the Beta Coefficient table, the researcher highly concentrated on the values of the stan -
dardized Beta coefficient in order to figure out the relative importance of each independent
variable, in predicting the dependent variable and on the standardized Beta coefficient in or-
der to formulate the linear regression equation.
A Standardized Beta Coefficient
Standardized beta coefficients are sometimes called relative importance weights can be used
to compare scores like Z-scores since they all are measured in standard deviation, and are not
dependent on the unit of measurement of the variables Field, (2006). Relative importance
weights are the proportionate contribution from each predictor to R 2 correcting for the effects
of the inter-correlations among predictors Lorenzo-Seva et al., (2010). This method is recom-
mended when the researcher is examining the relative contribution each predictor variable to
the dependent variable Johnson, (2004). Based on the relation observed on table 4.13 we can
see that the contribution of financial stability, after sales service, technical capacity and sup-
plier organizational culture as 36.0%, 22.2%, 23.0% and 24.8% respectively for the variation
observed in the dependent variable (procurement performance).
The highest contributor for the variation in procurement performance according to the re-
sponses of employees is financial stability. The second important factor that contributed
64
more, to the procurement performance is organizational culture. From the questionnaire, sur-
vey made on employees of public organization in Dire Dawa, the least affecting/contributor
factor for the procurement performance of public organization in Dire Dawa from the given
factors was supplier after sales service. That means as supplier after sales service offered by
the company increase by one percent standard deviation, procurement performance increases
by 0.222 standard deviations Field, (2006). The same is true for the other factors.
Table 4.13 shows the Beta Coefficients that present the contributions or positive or negative
relationship of each variable to the model. The t and p values showed the influence of the in-
dependent variables on the dependent variable. At 5% level of significance and 95% level of
confidence, supplier financial stability had 5.543 level of significance; supplier after sales
services showed 2.589 level of significance, supplier technical capacity showed 3.472 level
of significance and supplier organizational culture showed 4.636level of significant. Hence,
the most significant factor is supplier technical capacity.
Beta coefficient of the regression result shows all predictors were positively related to, depen-
dent variables and significantly influence the procurement performance. The study conducted
a multiple regression analysis to determine the effect of supplier evaluation on procurement
performance of public organization in Dire Dawa. All factors notably supplier financial sta-
bility supplier after sales service, supplier technical capacity and supplier organizational cul-
ture had effect on procurement performance in public organization in Dire Dawa. The study
therefore concluded that through improvement in supplier financial stability supplier after
sales services, supplier technical capacity and supplier organizational culture this could as
well improve procurement performance. This further indicates that supplier financial stability
supplier after sales services; supplier technical capacity and supplier organizational culture
are critical factors to improved procurement performance of public organization in Dire
Dawa.
B. Unstandardized Beta Coefficient
Unstandardized beta coefficient sometimes called Beta weights and tells us about the rela-
tionships between the dependent variable and the independent variables. If the value is posi-
tive, the relationship between the predictor and the outcome is positive. Negative coefficient
represents a negative relationship Field, (2006). According to Pedhazur, (1997), a β weight
coefficient informs us, as to how much change in the criterion variable (i.e., procurement per-
formance in our case) we might expect with a one-unit change in the predictor variables, (i.e.,
65
supplier financial stability, supplier after sales service, technical capacity, and organizational
culture) holding all other predictor variables constant. That means from table 13, as supplier
financial stability increases by one-unit procurement performance increases by 55.0% if the
other factors kept constant Field, (2006).
4.5. Hypothesis testing of the study
H0:1- financial stability of a supplier has no effect on procurement performances of public

organization in Dire Dawa.
H1:1-financial stability of a supplier has effect on procurement performance of public organi-

The results of multiple regressions, as presented in table 4.11 above, revealed that supplier fi-
nancial stability has a positive and significant effect on procurement performances of public
organization in Dire Dawa, with a beta value (B =0.360), at 95% confidence level (p < 0.05).
This implies that, if financial stability of a supplier increases by 1 percent, procurement per-
formance of public organization in Dire Dawa increases by 36.0%. Therefore, the researcher
rejects the null hypothesis and it is accepted that, financial stability of a supplier has a posi -
tive and significant effect on procurement performance of public organization in Dire Dawa.
The study is in line with in connection to, the above result it is supported by any effort of a
buying firm working with its supplier(s) to, increase the performance and/or capabilities of
the supplier(s) and meet the buying firm's short and/or long-term supply needs as well as pro-
mote on-going improvements that are intended to benefit both buyer and supplier(s) Wagner
(2011), Ahmed, and Hendry (2012).
H0:2- supplier after sales services has no effect on procurement performance of public orga-
H1:2-supplier after sales services has effect on procurement performance of public organiza-
tion in Dire Dawa.
66
The results of table 4.13 showed that the standardized coefficient beta and p-value of after
sales services of a supplier has positive and significant effect with (beta = 0.222, P< 0.05).
Accordingly, this hypothesis is accepted. Thus, the researcher accepts the alternative hypoth-
esis and establish after sales services of a supplier has a positive and significant effect pro-
H0:3-supplier technical capacity has no effect on procurement performance of public organi-

H1:3-supplier technical capacity has effect on procurement performance of public organiza-

tion in Dire Dawa.
The result of table 4.13 showed that the standard coefficient of beta and p-value of supplier
technical capacity has positive and significant effect at (B = 0.230, p < 0.05).
This implies that, if supplier technical capacity increases by 1 percent, procurement perfor-
mance of public organization in Dire Dawa will increase by 23.0%. So that, researcher rejects
the null hypothesis and it is accepted that supplier technical capacity has effect on procure-
ment performance of public organization in Dire Dawa.
H0:4-supplier organizational culture has no effect on procurement performance of public or-

ganization in Dire Dawa.
H1:4-supplier organizational culture has effect on procurement performance of public orga-

Table 4.13 further shows that, supplier organizational culture has a positive and significant
effect procurement performance of public organization in Dire Dawa with a Beta value (B =
0.248), at 99% confidence level (p < 0.0). This implies that, if supplier organizational culture
increases by 1 percent, procurement performance of public organization in Dire Dawa will in-
crease by 24.8%.
Therefore, the researcher rejects the null hypothesis and supplier organizational culture has
positive effect on procurement performance of public organization in Dire Dawa.
67
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
This chapter presents a summary of the major findings, conclusions and recommendations
made to help and improve the performance of public procurement in Dire Dawa public orga-
nization based on the objectives of the study.
5.1 Summary of Major Findings
The research aims at evaluating the effect of supplier evaluation on procurement performance
with reference to Dire Dawa public organization. Accordingly, to meet this objective, the re-
searcher has developed a questionnaire from the relevant literature to collect and analyze the
opinions of the study sample. The following findings are obtained.
5.1.1 Suppliers’ financial stability
The first objective was to evaluate the effect of supplier financial stability on procurement
performance in Dire Dawa public organization. The result shows that all of the respondents
agreed with a large extent that supplier financial stability (Annual turnover of a supplier Prof-
itability level, credit facility, Poor cash flow management, supplier total cost and inadequate
financial capacity) highly influence on procurement performance of Dire Dawa Public Orga-
nization. Therefore, supplier financial stability directly determines the level of quality in
products and services obtained through procurement activities; product quality is just an as-
pect of procurement performance.
Regarding the relationship between supplier financial stability (independent variables) and
procurement performance (dependent variable) the correlation shows that they have a strong
and positive correlation with supplier financial stability at Pearson correlation (r) value of
0.797with significant value of P<0.01. The results are consistent with similar research find-
ings by other researchers Oyando (2014), Kitheka (2013) and Mutai & Okello (2015).
The statistical analysis shows that supplier financial stability significantly influences on pro-
curement performance at significant value of p<0.05 at Beta value 0.360. This implies that
when the organization does a unit of improvement on supplier financial stability, it was en-
able to improve the procurement performance by 36.0%.
The results are consistent with similar research findings by other researchers Oyando 2014
and Pamela (2013).
68
5.1.2 Supplier after sales services
The second objective was to examine the effect of supplier after sales services on procure-
ment performance of public organizations in Dire Dawa. The result shows that all of the re-
spondents indicated that strongly agreed supplier after sales services influence on procure-
ment performance of the public organization. It indicated that supplier after sales services (af-
ter sale employee give prompt services, sincere interest, location of customer service
branches, up-to-date after sales equipment and willingness responsive) directly influences
their ability to supply what the organization needs.
Regarding the relationship between supplier after sales services (independent variable) and
procurement performance (dependent variable) the correlation relation shows that they have a
strong and positive correlation with supplier after sales services at Pearson correlation (r)
value of 0.822 with significant value of P<0.01.
5.1.3 Supplier technical capacity
The third objective was to evaluate the effect of supplier technical capacity on procurement
performance of public organization in Dire Dawa. The results indicated that all of the respon-
dents agreed that technical capacity (skilled labor force of supplier, professional skills, stan-
dardized service level, problem solving skills, operation and maintenances skill and social
networking) with a large extent influence on procurement performance of the public organi-
zation in Dire Dawa. This indicated that supplier technical capacity determines the under-
standing and satisfaction of buyer’s needs that directly enhances meeting such needs. Both
the standard multiple regression and the Spearman correlation models were used to test sup-
plier technical capacity impact on procurement performance public organization in Dire
Dawa.
The statistical analysis shows that supplier technical capacity significantly influences on pro-
curement performance at significant value of p<0.05 at Beta value 0.230. This implies that
when the organization does a unit of improvement on supplier technical capacity, it was en-
able to improve the procurement performance by 23.0%.
The results are consistent with similar research findings by other researchers Harps, (2000)
that suppliers’ need competent technical ability to provide high quality product or service, en-
sure future improvements in performance and promote successful development efforts. How-
ever, based on Harps the technical capacity ought to be given very high emphasis, which was
not the case in the AGPO at the County Government of Nakuru. Talal (2014) sheds lighter
69
between youth and technical capacity by assess the systemic constraints to market access fo-
cusing on youth and the procurement process where he revealed that the technical capacity of
the youth was a significant challenge. This was attributed to the country’s training institu-
tions, which were not only inadequate but also lacked the essential facilities and technology
to prepare students for the challenging business market.
5.1.4. Supplier organizational culture
The fourth objective was to evaluate the effect of supplier organizational culture on procure-
ment performance of public organization in Dire Dawa. Both the standard multiple regression
and the Spearman correlation models were used to test an organization’s culture impact on
procurement performance public organization in Dire Dawa.
The results indicated that all of the respondents agreed and strongly agreed that organiza-
tional culture (The glue that holds the organization together must be loyalty and mutual trust.
The organization defines success based on winning in the marketplace and outpacing the
competition. The organization defines success based on efficiency, dependable delivery,
smooth scheduling and low-cost production. The organization defines success based on hav-
ing the unique or newest products it is product leader and innovator. The management style in
the organization is characterized by security of employment, conformity, predictability, and
stability in relationships. In addition, the glue that holds the organization together must be in -
novation and development) with a large extent influence on procurement performance of the
public organization in Dire Dawa.
The statistical analysis shows that supplier organizational culture significantly influences on
procurement performance at significant value of p<0.05 at Beta value 0.248. This implies that
when the organization does a unit of improvement on supplier organizational culture, it was
enable to improve the procurement performance by 24.8. The results are consistent with simi-
lar research findings by other researchers Mary G. Porter (2019)
Regarding the relationship between supplier organizational culture (independent variable)

and procurement performance (dependent variable) the correlation relation shows that they
have a strong and positive correlation with supplier organizational culture at Pearson Correla-
tion value of 0.716 with significant value of P<0.01.
The results are consistent with similar research findings by Kandula (2006) who states that,
the key to good performance is a strong culture. He further maintains that due to difference in
organizational culture, same strategies do not yield same results for two organizations in the
70
same industry and in the same location. A positive and strong culture can make an average
individual perform and achieve excellent results whereas a negative and weak culture may
demotivate an outstanding employee to underperform and end up with no achievement. Fur-
ther, Magee (2002) contends that without considering the impact of organizational culture,
organizational practices such as performance management could be counterproductive be-
cause the two are interdependent and change in one will affect the other.
Finally, the multiple regression analysis result indicated that 81.1% of variance in the pro-
curement performance could be predicted from supplier evaluation factors. While the remain-
ing 19.9% is explained by other supplier evaluation factors, which are not included in this re-
search.
5.2 Conclusion
The conclusions that were made in this study were based on the findings and discussion
above was based on the responses of the respondents, based on the independent variables of
the study that were, supplier financial stability, and supplier after sales services, supplier
technical capacity and supplier organizational culture. As regards supplier financial stability,
it was concluded that supplier financial stability influence on procurement performance of the
public organization in Dire Dawa with a large extent and it has positive and significant effect
on procurement performance. Supplier financial stability directly determines the level of
quality in products and services obtained through procurement activities. As regards supplier
after sales services, it was concluded that supplier after sales services influence on procure-
ment performance of public organization in Dire Dawa, with a large extent and it has positive
and significant effect on procurement performance. Supplier after sales services directly in-
fluences their ability to supply what the organization needs. As regards supplier technical ca-
pacity, it was concluded that supplier technical capacity influence on procurement perfor-
mance of public organization in Dire Dawa with a large extent and the independent variables
have positive and significant effect on procurement performance of public organization in
Dire Dawa.
As regards to supplier organizational culture, it was concluded that supplier organizational

culture influence on procurement performance of public organization in Dire Dawa with a
large extent and the independent variables have positive and significant effect on procure-
ment performance of public organization in Dire Dawa.
71
Generally, based on those findings, it was concluded that supplier evaluation could be used to
improve procurement performance of public organizations in Dire Dawa.
5.3 Recommendations
Based on the findings, the following recommendations were forwarded by the researcher: -
The organizations train their supplier evaluation committees or procurement experts on how
best to evaluate the suppliers, and try to include the criteria like the supplier financial stabil-
ity, technical capacity, after sales services, and the supplier organizational culture variable in
their criteria for evaluating supplier. This was enabling the organizations to get the right sup-
pliers that was led to harnessing the benefits associated with shortened lead times, customer
satisfaction and higher profit margins. The organization should take into consideration what
evaluation criteria is related to improve procurement performance and capitalize on them like
supplier financial capacity, after sales service, technical capacity, and organizational culture.
and the like to enjoy an organization benefit related with reduced lead times, increased re-
sponsiveness to customers, higher quality supplies with lower cost, customer satisfaction,
customer loyalty, increased profitability and reduced opportunity cost from lost sales.
Finally, it is recommended that experts who are knowledgeable and have expertise to conduct
the exercise professionally should do supplier evaluation.
5.4 Further areas of research
This study sought to assess effect of supplier evaluation criteria (financial stability, after sales
service, technical capacity and organizational culture) on procurement performance public or-
ganization in Dire Dawa. The study found out that supplier financial stability had the highest
significance on procurement performance. Future studies should concentrate on how to en-
hance supplier financial stability to ensure greater procurement performance. In addition, fu-
ture studies should seek to unravel criteria of supplier evaluation related with organizational
culture that can enhance public procurement performance in the context of public and private
sector. Further, future studies should delve deeper on appropriate implementation criteria re-
lated with technical capabilities of a supplier to ensure maximum contribution to organiza -
tional procurement performance.
72
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APPENDICES
APPENDIX 1: LETTER OF INTRODUCTION
I am a student at Ethiopian Civil Service University of public procurement and asset manage-
ment pursuing a master of Art in public procurement and asset management. I am conducting
research on the effect of supplier evaluation on procurement performance of public organiza-
tion in Dire Dawa, you have been identified as one of the collaborators and key respondent in
this study, and I would like to invite you to kindly participate in my research. I therefore
write to request for your invaluable assistance towards making this study a success by taking
time off your busy schedule to respond to the attached questionnaire the information you pro-
vide shall be treated with utmost confidence and will only be used for the purpose of this
study. Thanks in advance Yours Faithfully, Kemal Aliyi Tel: 090260674
APPENDIX2 QUESTIONNAIRE
Ethiopian civil service University School of Development Finance and Management
Department of Public procurement and Asset Management
Survey Questionnaires filled by procurement staffs and purchasing related employee’s public
organizations in Dire Dawa.
This questionnaire seeks to investigate the effects of supplier evaluation on procurement per-
formance of public organization in Dire Dawa. In particular, it will involve aspects of sup-
plier financial stability, supplier after sales services, supplier technical capacity and supplier
organizational culture. If you have any question, please do not hesitate to ask the researcher,
Kemal Aliyi 0902606741, kabdurahmen@gmail.com.
This questionnaire consists of two parts; kindly answer all the questions by ticking (√) in the
appropriate box and filling in the spaces provided.
General Information of the Respondents
Sex Male [ ] Female [ ]
Respondent’s position
Head of Department unit [ ] Senior Expert [ ] Expert [ ]
Other (specify) __________________
How long have you worked in the current organization?
81
Less than 2 years []
2 – 5 years [ ]
6 – 10 years [ ]
Over 10 years [ ]
What is your education level?
Certificate [ ] Diploma [ ] Degree [ ] Master’s Degree & above [ ]
Here are some questions that ask you to tell us how supplier evaluation based on the follow-
ing statements affect the procurement performance of your organization in general. Please
kindly answer all the questions by ticking (√) On the appropriate number on the scales below.
To what extent would you agree with the following statements, on a scale of 1 to 5, 1 denot -
ing very low agreement, and five denoting very high agreement?
No Variables Strongly Disagree Neutral Agree Strongly

Disagree Agree
I Supplier financial stability
1 Annual turnover of a supplier

influence on procurement per-
formance
2 Profitability level of a supplier

effect on procurement perfor-
mance
3 availability of supplier credit

facility effect on procurement
performance
4 Poor cash flow management of

supplier effect on procurement
performance
5 Not understanding of supplier

total cost effect on procurement
performance
6 Inadequate financial capacity

of supplier effect on procure-
ment performance
II After sales service
82
1 after sale employees give
prompt service
2 The service provider shows a

sincere interest in solving cus-
tomer problems
3 The customer service branches

of the company should be lo-
cated in convenient places
4 The service provider needs to

have up-to-date after sale
equipment
5 The company customer call

service personnel should be
willing and responsive to help
customers
III Supplier technical capacity
1 Skilled labor force of supplier

influence on procurement per-
formance
2 The employees should have

professional skills
3 Standardized service level
4 The employees of the supplier

need to have a problem-solving
skill
5 employees need to have a nec-

essary operation and mainte-
nance skills
6 Supplier needs to develop so-

cial networking
IV Supplier organizational culture
1 The glue that holds the organi-

zation together must be loyalty
and mutual trust
2 The organization defines suc-
83
cess on the basis of winning in
the marketplace and outpacing
the competition

cess on the basis of efficiency,
dependable delivery, smooth
scheduling and low-cost pro-
duction

cess on the basis of having the
most unique or newest prod-
ucts, it is product leader and in-
novators
5 The management style in the

organization is characterized by
security of employment, con-
formity, predictability, and sta-
bility in relationships.
6 The glue that holds the organi-

zation together must be innova-
tion and development
2. Procurement Performance Indicators
To what extent do you agree does supplier evaluation influence on procurement per-
formance in respective of the following procurement performance indicators?
S.No. Statement Strongly Disagree Neutral Agree Strongly

disagree agree
1 Acquisition of higher qual-

ity supplies with lower cost
2 Reduced risk of supplier fail-

ure
3 Achieving customer
satisfaction
APPENDIX 3 WORK AND BUDGET PLANS
84
No Activi- Nov Dec Jan Feb March April May June
ties
w1 w2 w3 w4 w1 w2 w3 w4 w1 w2 w3 w4
1 Title selec- Done

tion
2 Submit Ti- Done

tle
3 Editing the Done

Title
4 Data collec- Done

tion
and orga-
nizing
6 Submitted the first draft of the proposal to X X

the advisor
7 Data collection X X X X
8 Organize the data X X
9 Analyses the data X
10 Writing the first draft
11 Submitted first draft of the thesis X
12 Edited and submitted the final draft X
13 Open defines X
Budget Breakdowns
S.N Item or Activities Unit Quantity Unite price Total price in Remark
birr Birr
1 Paper Packed 6 200 1200
2 Pen Number 10 6 60
3 Typing Date 1months 150 4500
85
4 Editing Date 1months 100 3000
5 Printing Number 20 6 120
6 Photo Cope Serves Number 20 6 120
Sub Total 468 9000
2 Administrative
Cost
2.1 Transports Cost Trip /birr 15 250 3750
2.2 Mobile Cared Number 30 100 3000
Contingence Cost 3500

Total 818 19250
86
APPENDIX 4 PUBLIC ORGANIZATION
Sampling frame Number of popula- Sample Sampling Tech-

tions size niques
Public procurement and property deposal 17 13

agency
The mayor office 3 4
Trade industry and investment bureau 3 4
Public service and human resource biro 4 4
Finance and economic development bureau 4 4
Agriculture, mineral and energy bureau 3 4
Education euro 4 4
Women, children and youth affair bureau 4 4
Health office 3 4
Communication affair bureau 4 4
City administration office 3 3
Community participation office 4 4
purposive
Sabian primary hospital 3 3
Goro health center 3 4
Ganda Kore health center 4 3
Dachatu health center 4 3
Adiskatama health center 4 4
Lagahare health center 4 3
Gandagarada health center 4 2
Diredawa general secondary and preparatory 3 4

school
Sabian secondary and preparatory school 3 3
Land administration and management bureau 4 4
Revenue authority bureau 4 4
Road and transport authority bureau 3 4
Sport commission 4 4
Urban greenery beatification bureau 3 4
87
Main auditor bureau 4 4
Constriction bureau 3 4
Dilchora hospital 4 4
Diredawa water and mines office 3 3
Total 120
ተ.ቁ ¾xf@ሙስም ምርመራ
1 ምክርቤት
2 ከንቲባጽ/ቤት
3 ንግድ፤ኢንዱስትሪናኢንቨስትመንተትቢሮ
4 ፐብሊክሰርቢስናየሰውሀብትልማትበሮ
5 ገንዘብናኢኮኖሚልማትቢሮ
6 ግብርናውሃማዕድንናኢነርጂቢሮ
7 ትምህርትቢሮ
8 የሴቶችህፃናትናወጣቶችጉዳይቢሮ
9 ጤናጥበቃቢሮ
10 ፍትህፀጥታናየህግጉዳዮችቢሮ
11 ኮሚኒኬሽንጉዳዮችቢሮ
12 ኮንስትራክሽንናማዘጋጃአገልግሎትቢሮ
13 የመሬትልማትናማኔጅመንትቢሮ
14 ከተማሥራአስኪያጅ
የቴክኒክናሙያእናኢንተርፕራይዞችልማትቢሮ
15 ስፖርትኮሚሽን
16 የከተማጽዳትናውበትአጀንሲ
17 መንገዶችባለሥልጣን
18 ቄራአገልግሎትድርጅት
19 ውሃናፍሳሽባለሥልጣን
88
20 ቴክኒክናሙያት/ሥ/ማ/ኤ
21 ብዙሃንመገናኛኤጀንሲ
22 ዋናውኦዲተርመ/ቤት
23 ይግባኝሰሚፍ/ቤትእናየመጀመሪያደረጃ
24 ድሬዳዋፖሊቴክኒክናሙያኮሌጅ
25 ኢትየ-ጣሊያንፖሊቴክኒክኮሌጅ
26 ህብርተሰብተሳትፎኤጀንሲ
27 ገቢዎችባለሥልጣን
37 ድልጮራሁስፒታል
38 መልካጀብዱጤናጣቢያ
39 ሳቢያንየመጀመሪያደረጃሆ/ል
40 ጎሮጤናጣቢያ
41 ገንደቆሬጤናጣቢያ
42 ደቻቱጤናጣቢያ
43 አዲስከተማጤናጣቢያ
44 ጀሎነሊናጤናጣቢያ
45 ለገሃሬጤናጣቢያ
46 ገንደገራዳጤናጣቢያ
47 ድሬዳዋጤናአጠባበቅጣቢያ
48 ዋሄልጤናጣቢያ
49 ለገኦዳጉዱንፈታጤናጣቢያ
50 ቢዮአዋሌጤናጣቢያ
51 ቃሊቻጤናጣቢያ
52 ጀልዴሣጤናጣቢያ
89

Effect of Supplier Evaluation On Procurement Performance of Public Organizations in Diredawa

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COLLEGE OF FINANCE, MANAGEMENT & DEVELOPMENT

DEPARTMENT OF PUBLIC PROCUREMENT AND ASSET MANAGEMENT

EFFECT OF SUPPLIER EVALUATION ON PROCUREMENT PERFORMANCE OF

ADDIS ABABA, ETHIOPIA

DEPARTMENT OF PUBLIC PROCUREMENT AND ASSET MANAGEMENT

EFFECT OF SUPPLIER EVALUATION ON PROCUREMENT PERFORMANCE OFPUB-

Kemal aliyi (ID No ECSU2101324)

Tihitina Ayalew (PhD)

Addis Ababa, Ethiopia

Place: Ethiopia Civil Service University

Name of Advisor: Tihitina Ayalew (PhD)

APPROVED BY BOARD OF EXAMINERS

__________________________ ______________ _________

Chair Person Signature Date

_____________________________ ______________ _________

Internal Examiner Signature Date

____________________________ __________ _________

External Examiner Signature Date

___________________________________ __________ _________

Department Head Signature Date

1.1 Background of the study

1.2. Statement of the Problem

1.3. Research Questions

1.4. Objectives of the study

1.4.1. General objective

1.4.2. Specific Objectives of the Study

The specific objectives of the study were, mentioned as follows:

1.5 Research Hypotheses

H1:0- financial stability of a supplier has no effect on procurement performances of public

H3:0-supplier technical capacity has no effect on procurement performance of public organi-

H3:1-supplier technical capacity has effect on procurement performance of public organiza-

H4:0-supplier organizational culture has no effect on procurement performance of public or-

H4:1-supplier organizational culture has effect on procurement performance of public organi-

1.6. Justification and Significance of the Study

1.7. The scope the study

1.9. Description of the Study Area

Figure 3.1 Location map of Dire Dawa

Source Eleni (2000)

2. Operational Definitions of key terms

2.1. Organizations of the study

2.1. The Concept and Nature of Public Procurement

Ethiopia's Public Procurement Proclamation (No. 649/2009) defines procurement as "obtain-

2.2. Principles of Public Procurement

2.2.4. Non-discrimination (fairness)

Good procurement is non-discriminatory, impartial, consistent, and therefore reliable. It of-

A number of factors including financial performance, customer service, social responsibility,

2.4. Supplier Evaluation

Supplier evaluation is a continuous process for purchasing departments and is a pre-qualifica-

Supplier evaluation is a management activity whose primary aim is to acquire information to

2.5.1. Financial stability

2.5.2. After-sales services

2.5.3 Suppliers' technical capability

Organizational culture is a foundation for management and operations practices. Zhao

2.6 The Concept of Organizational Performance

According to Daft (2000), organizational performance is the organizations' ability to attain

They stated that as a concept in modern management, organizational performance suffered

2.8. Conceptual Framework

Figure 2.8 conceptual frameworks

Source own survey (2022)

2.9. Research Gaps

2.10 Summary of Literature Review

3.1 Research Approach

3.2. Research Design

________________ _

___________________ _

__________________ _

_________________________ _