EFFECTS OF GOVERNANCE STRUCTURE ON SUPPLIER PERFORMANCE IN SERVICE STATE OWNED ENTERPRISES IN KAKAMEGA COUNTY
Abstract
In Kenya it is estimated that public procurement accounts for over 10% of the Gross Domestic Product (GDP), making it a large market for suppliers and contractors. However, supplier performance has not been impressive in Kenya’s public sector to date. Evidence suggests that Kenya’s public entities are suffering from long lead times, poor quality of goods and services delivered and high levels of contract violations. PPOA report of 2015, reported that more than $200 million is lost every year due to suppliers failure to deliver as per terms of the signed contracts, and this is despite the presence of a contract management system. The objective of the study was to investigate the effect of governance structure on supplier performance in service state owned enterprises in Kakamega County. Survey research design was adopted targeting 120 State Owned Enterprises officials from 15 Service State Owned Enterprises in the County using a census survey. The study was quantitative in nature and used questionnaires as research instruments. Data was analyzed using both descriptive and inferential statistical methods with the aid of Statistical Package for Social Sciences (SPSS) version 24 and findings were presented in the form of frequency distribution tables. Governance structure was also found to significantly influence on supplier performance. The study recommended a further study on the effect of contractor-supplier relationship on quality of goods and services supplied. This study would help to shed more light on the lack of consensus on the subject matter as identified in this current study.
Key Words: Governance Structures, Supplier Performance, Kakamega County
CITATION: Okello, R. A., Okello, B., & Juma, D. O. (2019). Effects of governance structure on supplier performance in service state owned enterprises in Kakamega County. The Strategic Journal of Business & Change Management, 6 (2), 2330 – 2341.
Full Text:
PDFReferences
Aman, A., Hamzah, N., Amiruddin, R. & Maelah, R. (2012). Transaction costs in finance and accounting offshore outsourcing: a case of Malaysia. Strategic Outsourcing: An International Journal, 5(1), 78-88.
Argyres, N. and Mayer, K.J. (2004), “Learning to contract: evidence from the personal computer industry”, Organizational Science, Vol. 15 No. 4, pp. 394-410.
Argyres, N. and Mayer, K.J. (2007), “Contract designing as a firm capability: an integration of learning and transaction cost perspectives”, The Academy of Management Review, Vol. 32 No. 4, pp. 1060-77.
Austen-Baker, R. (2009) “Comprehensive Contract Theory: A Four-Norm Model of Contract Relations” 25 Journal of Contract Law 216.
Barton, T.D. (2009), Preventive Law and Problem Solving: Lawyering for the Future, Vandepals, Lake Mary, FL.
Basheka, B.C. Tumutegyereize, M. & Sabiiti, C.K. (2013). Procurement Governance and Administrative Efficiency In Uganda: An Empirical Relational Analytical Framework
Bernard, H. & Simon, E. (2005). International Cooperation and the Reform of Public Procurement Policies. World Bank Policy Research Working Paper 3720
Camén, C., Gottfridsson, P. & Rundh, B. (2012). Contracts as cornerstones in relationship building. International Journal of Quality and Service Sciences, 4 (3), 208 - 223.
Chong, H.Y., Balamuralithara, B. & Chong, S.C. (2011). Construction contract administration In Malaysia using DFD: a conceptual model. Industrial Management & Data Systems, 11(9), 1449 - 1464.
Chong, A.Y.L. & Ooi, K.B. (2008). ‘Adoption of inter organizational system standards in supply chains: an empirical analysis of Rosetta Net standards’, Industrial Management and Data Systems, 108 (4), 529–547
Chopra, P. (2005). Purchasing and supplies chain Management..NewJersy: Kogan Page Publishers
Diathesopoulos, M.D. (2010), Relational Contract Theory and Management Contracts: A Paradigm for the Application of the Theory of the Norms. Lancaster University Law School Research Papers. Available at SSRN: https://ssrn.com/abstract=1625348 or http://dx.doi.org/10.2139/ssrn.1625348
Eisenberg, M. (2000) “Why There is No Law of Relational Contracts” 94 Northwestern University Law Review 805; R. Austen-Baker, “A Relational Law of Contract?” (2004) 20 Journal of Contract Law 125.
Enquist, B., Johnson, M. & Camén, C. (2005). Contractual governance for sustainable service. Qualitative Research in Accounting & Management, 2(1), 29 - 53.
Erridge, A., Fee, R. & McIlroy, J. (2001). Best practice Procurement: Public and Private Sector Perspectives. International Purchasing and Supply Education Research Association. Conference. Aldershot, Hampshire, England; Burlington, VT: Gower
Erridge, A., Fee, R., & McIlroy, J. (Eds.). (2001). Best practice procurement: Public and private sector perspectives. Gower Publishing, Ltd..
Gordon, S. (2005). "Seven Steps to Measure Supplier Performance" by Quality Progress,
Government of Kenya (2013). Guidelines on terms and conditions of service for state corporations; Chief executive officers chairmen & Board members, management & unionasable staff, Government press, Nairobi, Kenya.
Greve, C. (2008). Contracting for Public Services. New York, NY: Routledge.
.Haapio, H. (2006), “Introduction to proactive law from a business lawyer’s point of view”, in Wahlgren, P. (Ed.), A Proactive Approach, Scandinavian Studies in Law, Vol. 49, Stockholm Institute for Scandinavian Law, Stockholm, pp. 21-34.
Hadfield, G.K. (1990), “Problematic relations: franchising and the law of incomplete contracts”, Stanford Law Review, Vol. 42, pp. 927-92.
Hansson, L. & Longva, F. (2014). Contracting accountability in network governance structures. Qualitative Research in Accounting & Management, 11(2), 220-230
Interagency Procurement Working Group (IAPWG) in 2006
Jeptoo, N., & Karanja, K. (2017). Effect of governance structure on e-procurement implementation by state corporations in Kenya. International Academic Journal of Procurement and Supply Chain Management, 2(3), 76-91.
Kay, J. (2010). Think before you tear up an unwritten contract. Financial Times, 17.
Kemunto, D. & Ngugi, K . (2014). Influence Of Strategic Buyer Supplier Alliance On Procurement Performance In Private Manufacturing Organizations A Case Of Glaxo Smithkline. European Journal of Business Management, 2 (1), 336-341.
Ketchen, D.J. (2007). Bridging organization theory and supply Chain. Journal of supply chain Management. Vol.35, No.9. pp. 149-152.
Khadija, R., & Kibet, Y. (2015). Factors affecting implementation of public procurement procedures and practices in Elgeyo-Marakwet county. International Academic Journal of Procurement and Supply Chain Management, 1(5), 121-135.
Kibogo, A. D. & Mwangangi, M. (2014). Factors Affecting Contract Management in Public Procurement Sector in Kenya: A Case of Kenya Literature Bureau. European Journal of Business Management, 1 (11), 377-384.
Kinyanjui, M. J. W. (2013). The role of supply chain tools and techniques. Journal of supply chain Management. Vol.44, No.11. pp. 111-123.
Kreitner, R. (2006), Calculating Promises: The Emergence of Modern American Contract Doctrine, Stanford University Press, Palo Alto, CA.
Lee, N. (2008), “From tangibles to intangibles – contracting capability for intangible innovation”,in Nyste´n-Haarala, S. (Ed.), Corporate Contracting Capabilities, Conference Proceedings and other Writings, Joensuun yliopiston oikeustieteellisia¨ julkaisuja 21, Joensuu, pp. 33-50.
Lehto, J. (2008). Modifications in different types of business contracting from the perspective of contract law and contracting practices. In Corporate Contracting Capabilities, Conference Proceedings and other Writings, Joensuun yliopiston oikeustieteellisiä julkaisuja (Vol. 21, pp. 89-102).
Lysons, K. and Farrington, B. (2012). Purchasing and Supplies Chain management, Pearson Education Limited, Edinburgh Gate, England
Macaulay, S. (1963), “Non-contractual relations in business: a preliminary study”, American Sociological Review, Vol. 28, pp. 55-67.
Macneil, I.R. (1978), “Contracts: adjustment of long-term economic relations under classical, neoclassical and relational contract law”, Northwestern University Law Review, Vol. 72, pp. 854-905.
Macneil, I.R. (1969) Whither Contracts? 21 Journal of Legal Education 403, 408
Macneil, I.R. (2000) “Contracting Worlds and Essential Contract Theory” Social & Legal Studies 9, 431.
Macneil, I.R. (1974).“The Many Futures of Contract” 47 Southern California Law Review 691.
Macneil, I.R. (2003). “Reflections on Relational Contract Theory After a Neoclassical Seminar” in H. Collins, D. Campbell and J. Wightman (Eds), The Implicit Dimensions of Contract, Hart: Oxford
Macneil, I.R. (1974) “The Many Futures of Contract” 47 Southern California Law Review691; I.R. Macneil, “Contracts: Adjustment of Long-Term Economic Relations Under Classical, Neoclassical and Relational Contract Law” (1978) 72 Northwestern University Law Review 340.
McCrudden, C. (2008). Using public procurement to achieve social outcomes. Journal of supply chain Management. Vol.55, No.11. pp. 133-134.
Mwanjumwa, G., & Simba, F.T. (2015). Factors Influencing Procurement Performance in Humanitarian Relief Organization a Case of International Committee of the Red Cross in Kenya. International Journal of Scientific and Research Publications, Volume 5, Issue 9.
Rotich, J.C. (2014). Contract Management Practice and Operational Performance of State Corporations in Kenya. Unpublished Masters Thesis, University of Nairobi
Ryals, L. J., & Rogers, B. (2006). Holding up the mirror: The impact of strategic procurement practices on account management. Business Horizons, 49(1), 41-50.
Shiwa, I.R. (2014) The Effectiveness of Contract Management On Contractors’ Performance: A Case Study of Oil and Gas Company. Unpublished Master’s Thesis, Open University of Tanzania
Simpson, M. (2007), Benchmarking and the organization the performance Vol.18, No.9. pp. 138-142
Uchida, T. (1993) “The New Development of Contract Law and General Clauses – A Japanese Perspective” in The Organizing Committee (Eds), Proceedings of the Symposium: Japanese and Dutch Laws Compared (University of Tokyo Centre for Comparative Law and Politics Institute of Comparative Law: Tokyo
Waigwa, M. W. & Njeru, A. (2016). Factors influencing management of procurement contracts In public security agencies: A case of Kenya Police Service. International Academic Journal of Procurement and Supply Chain Management, 2 (2), 20-40
Wanyonyi, C.S.,& Willy Muturi, W. (2015). Factors Affecting Performance Of Procurement Function Among Public Technical Training Institutions in Kisumu County, Kenya. International Journal of Economics, Commerce and Management, 3(5), 325-337
DOI: http://dx.doi.org/10.61426/sjbcm.v6i2.1265
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.