procurement management and financial performance of banks in tanzania

103 Pages·2016·0.49 MB·English

PROCUREMENT MANAGEMENT AND FINANCIAL
PERFORMANCE OF BANKS IN TANZANIA: A CASE OF CRDB
BANK (T) LTD
PROCUREMENT MANAGEMENT AND FINANCIAL
PERFORMANCE OF BANKS IN TANZANIA: A CASE OF CRDB
BANK (T) LTD
By
Allen Luther
A Research Dissertation Submitted in Partial Fulfillment of the Requirements for the
Award of the Degree of Master of Science in Procurement and Chain Supply
Management (MSc-PSCM) of Mzumbe University Dar es Salaam Campus College
2013
CERTIFICATION
We, the undersigned, certify that we have read and hereby recommend for
acceptance by the Mzumbe University, a dissertation entitled; Procurement
Management and Financial Performance of Banks in Tanzania: A Case of
CRDB Bank (T) Ltd, in partial /fulfillment of the requirements for award of the
degree of Master of Science in Procurement and Supply Chain Management (MSc-
PSCM) of Mzumbe University.
……………………………………..
Major Supervisor
………………………………….
Internal Examiner
………………………………
External Examiner
Accepted for the Board of MUDCC
…………………………………………………………
CHAIRPERSON, FACULTY/DIRECTORATE BOARD
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DECLARATION
I, Allen Luther, declare that this dissertation is my own original work and that it has
not been presented and will not be presented to any other University on a similar or
any other degree award.
Signature ……………………………….
Date…………………………………….
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COPYRIGHT
© 2013
This dissertation is a copyright material protected under the Berne Convention, the
Copyright Act 1999 and other international and national enactments, in that behalf,
on intellectual property. It may not be reproduced by any means in full or in part,
except for short extracts in fair dealings, for research or private study, critical
scholarly review or discourse with an acknowledgement, without the written
permission of Mzumbe University, on behalf of the author.
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ACKNOWLEDGEMENT
For the development and production of this work I feel a deep sense of gratitude:
To my supervisor, Mr. MaigeMwakasege Mwasimba for his guidance and
supervision.
To Mzumbe University DCC and department of Business Studies for sharing their
knowledge and expertisewith me throughout the MSc-PSCM Curriculum.
To the management of CRDB Bank (T) Limited Ltd for the multidimensional
support extended tome. My thanks go to the bank staff who were kind enough to
respond to the survey, who imparted some valuable information to the research or
shared their valuable time, expertise or experience with me.
To all my friends and MSc-PSCM colleagues for their support throughout this
demandingjourney:
My profound gratitude to all the other people, not mentioned here, who in one way or
the other assisted me in completing this research paper and the MSc-PSCM program
as a whole.
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ABBREVIATIONS AND ACRONYMS
BoT - Bank of Tanzania
CRDB - Community and Rural Development Bank
FIA - Financial Institutions Act
HBO - Head of Business Operations
HF - Head of Finance
MD - Managing Director
PMV - Procurement Monitoring and Verification
PO - Purchasing Officer
PSM - Procurement and Supply management
SCM - Supply Chain Management
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ABSTRACT
This study looked at the effect of procurement management on the financial
performance of banks in Tanzania with a case study of CRDB Bank (T) Ltd.,
specifically the study reviewed procurement planning, controls and monitoring and
how they affected the performance of banks. It was hypothesized in the study that
procurement planning, controls and monitoring positively affect the performance of
banks.
Empirical data was collected from the staff of CRDB Bank (T) Limited and the study
had 33 respondents from the targeted population of 35; this sample was selected
using purposive sampling.
The empirical data was analyzed both quantitatively and qualitatively to examine the
relationships between procurement management and bank performance.
The key findings of the study indicated that the three procurement management
attributes i.e. procurement planning, controls and monitoring positively affected the
performance of the bank. This was because there were significant relationships that
were established from the study between these variables and the financial
performance of the bank.
From the study, it was recommended that the existing procurement planning
processes be revised and strengthened to further improve bank performance; the
controls be thoroughly reviewed and adherence enforced; while monitoring be
carried out regularly and by independent personnel.
Further research was recommended to cover other procurement management
attributes and a wider population of banks in Tanzania.
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TABLE OF CONTENTS
Pages
CERTIFICATION......................................................................................................i
DECLARATION........................................................................................................ii
COPYRIGHT............................................................................................................iii
ACKNOWLEDGEMENT........................................................................................iv
ABBREVIATIONS AND ACRONYMS..................................................................v
ABSTRACT...............................................................................................................vi
TABLE OF CONTENTS.........................................................................................vii
LIST OF TABLES....................................................................................................ix
LIST OF FIGURES...................................................................................................x
CHAPTER ONE ........................................................................................................1
PROBLEM SETTING...............................................................................................1
1.1 Introduction...............................................................................................1
1.2 Background to the Study...........................................................................1
1.2.1 Background to the Case Study..................................................................2
1.3 Statement of the Problem..........................................................................4
1.4 Objectives of the Study.............................................................................5
1.4.1 General Objective......................................................................................5
1.4.2 Objectives of the Study.............................................................................5
1.5 Research Questions...................................................................................6
1.5.1 General Question.......................................................................................6
1.5.2 Specific Questions.....................................................................................6
1.6 Significance of the Study..........................................................................6
1.7 Scope of the Study.....................................................................................7
1.7.1 Subject Scope............................................................................................7
1.8 Limitation of the Study.............................................................................7
1.9 Delimitation of the Study..........................................................................7
CHAPTER TWO.......................................................................................................9
LITERATURE REVIEW..........................................................................................9
2.1 Introduction...............................................................................................9
2.2 Theoretical Review...................................................................................9
2.2.1 Definition of Key Terms...........................................................................9
2.2.2 Theories and Concepts............................................................................13
2.3 Conceptual Framework...........................................................................42
CHAPTER THREE.................................................................................................46
RESEARCH METHODOLOGY...........................................................................46
3.1 Introduction.............................................................................................46
3.2 Research Design......................................................................................46
3.3 Population of the Study...........................................................................47
3.4 Sample Size and Selection Strategy........................................................47
3.5 Data Collection Methods.........................................................................48
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3.6 Data Collection Instrument.....................................................................48
3.7 Validity and Reliability...........................................................................49
3.8 Data Analysis..........................................................................................49
CHAPTER FOUR....................................................................................................51
DATA PRESENTATION AND ANALYSIS.........................................................51
4.1 Introduction.............................................................................................51
4.2 Characteristics of the Respondents.........................................................51
4.3 Interpretation of Findings........................................................................54
4.3.1 Analysis of Objective 1: Procurement Planning and Bank Performance54
4.3.2 Analysis of Objective 2: Procurement Controls and Bank Financial
Performance............................................................................................63
CHAPTER FIVE......................................................................................................74
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS .........................74
5.1 Introduction.............................................................................................74
5.2 Summary of the Findings........................................................................74
5.3 Conclusions.............................................................................................75
5.3 Recommendations...................................................................................77
5.4 Suggestions for Further Research...........................................................78
REFERENCES.........................................................................................................79
APPENDICES..........................................................................................................89
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