PROCUREMENT PRACTICES AND PROCUREMENT PERFORMANCE OF OIL MARKETING COMPANIES IN KENYA
Abstract
This study investigated the procurement practices affecting procurement performance of oil marketing companies in Kenya. The study was anchored on social exchange theory, innovation diffusion theory and game theory. This study adopted cross-sectional descriptive research design. The target population comprised of all small and medium Oil marketing firms operating in Mombasa County which formed the unit of observation. The unit of analysis was the management staff drawn from procurement, supply chain, operations, finance and accounting and ICT. The sample size was 79 arrived at using Slovin’s formula from the target population. The collected data was coded and analyzed using the Statistical Package for Social Sciences (SPSS version 26) tool. The data analysis techniques employed included descriptive statistics which measured mean and standard deviation and regression analysis which was conducted to test whether the strength of the relationship between the independent variables and the dependent variable were statistically significant. Analyzed data was presented using frequency and descriptive tables. The study results established that procurement performance demonstrated a substantial positive link with procurement practices, according to the correlation coefficient index. In addition, ANOVA was used to assess the regression model's validity. With a p-value of 0.05, the results showed that the model was valid for assessing the relationship between the research variables. The procurement performance of Oil marketing firms in Kenya was significantly and favorably affected by procurement practices as indicated by the coefficient of determination (r2) in the model summary. The study concluded that the company upholds supplier collaboration to enhance buyer-supplier relationships. Also there is open communication between the companies and oil suppliers. The oil companies undertook vendor development periodically to ensure they meet the required standards and that the oil companies promote alliance-based relationships with suppliers. The study recommended that the oil marketing companies should periodically identify the market oil needs to determine the capacity to procure. Further, the oil marketing companies should perform cost estimation before procuring oil supplies.
Key Words: Supplier Relationships, Procurement Planning, Purchase Order Tracking, Supplier Sourcing
CITATION: Amur M., & Kitheka S., (2023). Procurement Practices and Procurement Performance of Oil Marketing Companies in Kenya. The Strategic Journal of Business & Change Management, 10 (3), 404 – 419.
Full Text:
PDFReferences
Apiyo, R.O. & Mburu, D.K., (2016). Factors affecting procurement planning in county governments in Kenya: A case study of Nairobi City County. International Journal of Economics, Commerce and Management, 2(11), 176-193.
Bahaidar, F. A. (2015) Factors affecting supply chain management by oil companies in Kenya. Masters of Business Administration Thesis, Kenyatta University, Kenya
Basheka, B. C. (2016), Procurement and Local Governance in Uganda: a factor analysis approach, International Journal of Procurement Management, 2(2), pp. 191-209.
Burt, D. N., Petcavage, S. & Pinkerton, R., (2016), Supply management, 8th edn., McGraw- Hill Irwin, Boston.
Business Dictionary. (2020). E-procurement. [Online] Available at: [Accessed 30 Jan 2022].
Cherry, K. (2017). What is social exchange theory in psychology? [e-book]. Retrieved from https://www.verywell.com
Chopra, S. & Meindl, P. (2017), Supply Chain Management: Strategy, Planning and Operation, (4th Edition), Pearson Prentice Hall, Upper Saddle River, New Jersey.
Coad, A. (2017). Testing the principle of ‘growth of the fitter’: the relationship between profits and firm growth. Structural Change and Economic Dynamics, 18(3): 370-386.
Cockburn, H. (2016). Supply chain management: Strategy, planning and operation (3rd ed). New Jersey: Pearson Education Inc. New York, NY5(3), 110-196
Donaldson, B., & O'Toole, T. (2017). Strategic market relationships: from strategy to implementation: John Wiley & Sons. 10. Ellis, Scott C., Henke Jr, John W., & Kul
Dutta, D., (2016). Altitude towards School Infrastructure in Rural Areas of West Bengal
retrieved on 22 December 2021 from http://schoolininfrustructure.blogspot.com/search
Githaiga, M. W. (2015). Procurement practices and performance of Oil marketing firms in Kenya. Unpublished MBA Thesis, University of Nairobi, Kenya.
Gwako, Z. (2017). Supply chain performance measurement in the aviation industry: a case study of Kenya airways ltd. Unpublished Masters project, University of Nairobi, Kenya.
Harrison, A. & Hoak, R. (2017), Logistics Management & Strategy Competing Through the Supply Chain, Pearson Education.
Hussein, Y. A. & Moronge, M. (2020). Factors influencing procurement in the oil industry in Kenya.The strategic journal of business and change management, 7(4), Pp. 509-526.
Knudsen, D. (2016). Procurement Performance Measurement System: Focusing on the Swedish Public Sector - Google Scholar. (2016). Scholar.google.com. Retrieved 10 Oct 2021, from https://scholar.google.com/scholar?q=Knudsen,+D.
Kothari, C. K. (2014). Research Methodology, Methods & Techniques. New Delhi: New Age International (P) Limited Publishers.
Lee, S. M., Kim, S.T., & Choi, D. (2016), Green supply chain management and organizational performance, Industrial Management & Data Systems, 112(8), 1148 – 1180.
Lina, R. K. (2017). Growth strategies and performance of large Oil companies in Kenya. Unpublished Master’s Thesis, University of Nairobi, Kenya.
Magawa, R. A., & Karanja, N. (2019). Procurement practices and customer service delivery in petroleum industry in Kenya. The Strategic Journal of Business & Change Management, 6 (2), 1461 –1476.
McLachlin, R. & Larson, P. (2016) Building humanitarian supply chain relationships: lessons from leading practitioners. Journal of Humanitarian Logistics and Supply Chain Management
Nkpee, B. S., & Tamunomiebi, M. D. (2020). Supplier relationship management and vendors’ performance evaluation in the Rivers State Bureau for Public Procurement, Nigeria. The Strategic Journal of Business & Change Management, 7(1), 298 – 310.
Odhiambo, A.N. (2017). Procurement Practices in the Public Sector: A case of
Kenya’s Ministry of Agriculture. Unpublished Masters project, University of Nairobi, Kenya.
PwC (2018). Current developments in the oil and gas industry in Africa. PwC Energy Industry Group.
Sharma, F. (2015). Operations Research: Theory and applications, (4th ed.) India: Macmillan publishers. 41,460-9.
Sollish, F., & Semanik, J. (2017). The procurement and Supply Manager’s Desk Reference. John Wiley & Sons.
Van Weele, A. J. (2016). Purchasing & Supply Chain Management: Analysis, Strategy, Planning and Practice (4th ed.). Australia: Thomson.
West, R.L., & Turner, L.H. (2017). Introducing communication theory: Analysis and Application (3rd Edition ed.): McGraw-Hill. 55. Whitener, Ellen M. (2001). D
Wright, P. J. C. (2016), The North Sea contracting industry – Key issues and companies, Pearson Professional Limited, London.
DOI: http://dx.doi.org/10.61426/sjbcm.v10i3.2715
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.