E-procurement strategies and the performance of Kenya owned parastatals

55 Pages·2016·0.77 MB·English

E-PROCUREMENT STRATEGIES AND THE PERFORMANCE OF
KENYA OWNED PARASTATALS

MWENGA ESTHER KALAU

A RESEARCH PROJECT PRESENTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF
THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION OF
SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI

2016
DECLARATION

This research project is my original work and has not been presented for award of any
degree in any University for examination purposes.

Signature ___________________ Date: ________________
Mwenga Esther Kalau
D61/68029/2013

This research project has been submitted for examination with my approval.

Signature ___________________ Date: ________________
Dr. Omar Mohamed
Department of Business Administration
School of Business
University of Nairobi

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DEDICATION
This research study is dedicated to my family for their relentless motivation through-out
the entire MBA Program and especially during this research project.
To my project supervisor Dr. Omar Mohamed for his un-wavered guidance and support
to ensure I deliver the best even when I almost gave up. I thank you, Only God Almighty
can reward you.

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ACKNOWLEDGEMENT
The completion of this project was no mean task, It was put together by co-operating with
many unseen hands. First I owe special gratitude to God Almighty for holding me
through this period. I sincerely acknowledge my supervisor Dr. Omar Mohamed,
University of Nairobi in School of Business for his support, guidance and mostly patience
even when I almost gave up.

I will forever be grateful to my Parents Loise and Isaac Mwenga for inspiring me to start
this program and encouraging me to its completion, Special gratitude to my sisters Trizah
and Lenah Mwenga for being there when I needed them most.

I would also like to recognize the encouragement from all my colleagues and my MBA
classmates, friends and relatives whose remarkable devotion and support has been
evident through-out this project. May God Bless them abundantly.
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TABLE OF CONTENTS
DECLARATION............................................................................................................... ii
DEDICATION.................................................................................................................. iii
ACKNOWLEDGEMENT ............................................................................................... iv
LIST OF TABLES ......................................................................................................... viii
LIST OF FIGURES ......................................................................................................... ix
ABBREVIATIONS AND ACRONYMS ..........................................................................x
ABSTRACT ...................................................................................................................... xi

CHAPTER ONE: INTRODUCTION ..............................................................................1
1.1 Background of the Study ............................................................................................1
1.1.1 Concept of Procurement ......................................................................................2
1.1.2 E- Procurement ....................................................................................................2
1.1.3 Organizational Performance ................................................................................3
1.1.4 Kenya Parastatals .................................................................................................3
1.1.5 Public Sector and E-Procurement ........................................................................4
1.2 Research Problem .......................................................................................................4
1.3 Research Objectives ...................................................................................................6
1.4 Value of the Study ......................................................................................................7

CHAPTER TWO: LITERATURE REVIEW .................................................................8
2.1 Introduction ................................................................................................................8
2.2 Theoretical Foundation ..............................................................................................8
2.2.1 Resource Based View ..........................................................................................8
2.2.2 Dynamic Capability Theory ................................................................................8
2.2.3 Open System Theory ...........................................................................................8
2.2.4 E-Procurement Models ........................................................................................9
2.3 E-Procurement and Parastatal Performance ............................................................10
2.4 E-Procurement Adoption in Organizations ..............................................................10

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CHAPTER THREE: RESEARCH METHODOLOGY ..............................................13
3.1 Introduction ..............................................................................................................13
3.2 Research Design .......................................................................................................13
3.3 Population of the Study ............................................................................................13
3.4 Sampling Design ......................................................................................................13
3.5 Data Collection .........................................................................................................14
3.6 Data Analysis ...........................................................................................................14

CHAPTER FOUR: DATA ANALYSIS, findings AND discussion .............................16
4.1 Introduction ..............................................................................................................16
4.2 Background Information ..........................................................................................16
4.2.1 Type of Company ..............................................................................................16
4.2.2 Categories of the Parastatals ..............................................................................16
4.2.3 E-Procurement Adoption ...................................................................................17
4.2.4 Years of Adoption .............................................................................................18
4.3 Findings ....................................................................................................................19
4.3.1 Extent of Adoption ................................................................................................19
4.3.2 Level of Implementation .......................................................................................20
4.3.3 Critical Success Factors ........................................................................................22
4.3.4 E-Procurement Strategies and Performance ..........................................................23
4.4 Discussions ...............................................................................................................25
4.4.1 Extent of Adoption of E-Procurement Strategies in Kenya-Owned
Parastatals ..........................................................................................................25
4.4.2 The Level of Implementation of E-procurement Strategies in Parastatals ........26
4.4.3 Critical Factors to Successful E-procurement Strategies Adoption in
Parastatals ..........................................................................................................27
4.4.4 E-Procurement Strategies and Performance in Kenya-Owned Parastatals .......27

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS ...29
5.1 Introduction ..............................................................................................................29
5.2 Summary ..................................................................................................................29
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5.3 Conclusion ................................................................................................................30
5.4 Recommendations for Improvement ........................................................................30
5.5 Limitations of the Study ...........................................................................................31
5.6 Recommendations for Further Studies .....................................................................31

REFERENCES .................................................................................................................32

APPENDICES ..................................................................................................................35
Appendix I: List of Parastatals of Kenya .......................................................................35
Appendix II: Questionnaire ............................................................................................40

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LIST OF TABLES
Table 4.1: Extent of Adoption .......................................................................................... 19
Table 4.2: Level of E-Procurement Implementation ........................................................ 21
Table 4.3: The Critical Success Factors to Successful E-Procurement Adoption in
Organization .................................................................................................... 22
Table 4.4: Variables used to Measure E-Procurement Strategies on Performance .......... 23
Table 4.5: Regression Analysis......................................................................................... 25
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LIST OF FIGURES
Figure 4.1: Type of Company ........................................................................................... 16
Figure 4.2: The Parastatals ................................................................................................ 17
Figure 4.3: E-Procurement Adoption ................................................................................ 18
Figure 4.4: The Years of E-Procurement Adoption .......................................................... 18
Figure 4.5: Ranking of the Extent of Adoption Practices Based on their Mean ............... 20
Figure 4.6: Rank on the Level of Implementation of E-Procurement .............................. 21
Figure 4.7: Rank of the Critical Success Factors to Successful E-Procurement
Adoption in Firms ........................................................................................... 23
Figure 4.8: The Ranking of the E-Procurement Strategies on Performance Variables .... 24

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ABBREVIATIONS AND ACRONYMS
B2B Business to Business
B2C Business to Customer
B2E Business to Employees
CIPS Chartered Institute of Purchasing and Supplies
EDI Electronic Data Interchange
ERP Enterprise Resource Planning
ICT Information and Communications Technology
P2P Purchase to Pay
RBV Resource Based View
SOCState State Owned Corporations

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