THE EFFECTS OF PROCUREMENT PRACTICES ON ORGANIZATIONAL PERFORMANCE: A CASE OF EAST AFRICA BOTTLING SHARE COMPANY.

Abstract

Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source. It is used to ensure the buyer receives goods, services, or works at the best possible price when aspects such as quality, quantity, time, and location are compared. The main objective of this study is to examine the effects of procurement practices on organizational performance within the East Africa Bottling S.C. To this end, different procurement activities were investigated to identify the major variables affecting organizational performance. The study has adopted explanatory design in order to reach in to the targeted objective. To accomplish this, a sample of 177 respondents were sampled out of which 144 were completely collected making the response rate 81.4%. The study employed stratified random sampling technique to identify respondents from the population. In order to collect the necessary data, questionnaire was designed and distributed by taking the most important procurement practices identified in literature as variables to affect organizational performance. The data from the questionnaires were analysed through descriptive and inferential statistical techniques. For the descriptive statistics frequency, mean and standard deviation were used. As the inferential statistics correlation analysis and multiple regression analysis was conducted using SPSS statistical software program. The finding of the study showed that out of the total five procurement practices used all of them were found to be capable of significantly affecting organizational performance, organizational capacity being the highest. Accordingly all the five hypothesises were accepted. Therefore, EABSC is recommended to consider all the five procurement activities as they are capable of enhancing the company’s performance.