ABSTRACT
The research study main aim was to determine the effects of
purchasing strategies on organisational performance a case study of Goshen
children hospital Owerri with specific objectives being to examine how quality
management affects purchasing strategies at Goshen children hospital Owerri; to
establish how supplier optimization affects purchasing strategies at Goshen
children hospital Owerri; to examine how vendor development affects purchasing
strategies at Goshen children hospital Owerri; to establish how risk management
affects purchasing strategies at Goshen children hospital Owerri. The findings
were the reference point to other researchers in the same field and the
knowledge generated by this study will enable scholars to improve and develop a
better understanding on the subject. The study was anchored on the following
theories goal setting theory, institutional theory and expectancy theory. The
study variables are quality management, supplier optimization, vender
development and risk management. The study adopted a research design that is
descriptive with the target population being 100 respondents comprised of
senior managers, middle level managers and non-management that were randomly
selected. Stratified proportion sampling was involved in order to get a
suitable unit of representative of analysis. Questionnaires were administered
as the main data collection tool. Questionnaires were pilot tested before being
administered to the target audience. Analysis of data has been described with
the aid of descriptive statistics and analysis was done using SPSS, statistics
and quantitative methods. The
study established that quality management influences purchasing strategies at Goshen
children hospital the way suppliers are identified and developed. The study
also established that purchasing strategies at Gertrude children hospital are
very effective and affects performance and also vendor development, supplier
optimization affects purchasing to some extent but not as much as risk
management. The study recommends that Total quality management schemes should
be adopted by the Management of Goshen children hospital. To ensure quality
management is enhanced throughout the processes of purchasing in the
organization. By so doing the organization will be better placed for better
performance and be very competitive and the procurement department should
quarterly review their operational and strategic policies; the process should
involve all the staff members, section heads, main suppliers and board of
trustee to enable sound decision making.
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.0 Introduction
1.1 Background of
the Study
1.1.1 Organizational
Performance
1.1.2 Profile of
Goshen children hospital
1.2 Statement of
the Problem
1.3 Objectives
1.3.1 Specific
Objectives
1.4 Research
Questions
1.5
Significance of the Study
1.6
Scope
1.7
Chapter Summary
CHAPTER TWO
LITERATURE REVIEW
2.0
Introduction
2.1
Theoretical Literature Review
2.2.1
Expectancy Theory
2.2.2
Goal Setting Theory
2.2.3. Institution
Theory
2.2 Empirical
Literature Review
2.2.1
Quality Management
2.2.2
Supplier Optimization
2.2.3 Vendor
Development
2.2.4 Risk Management
2.3 Summary and
Research Gaps
2.4 Conceptual
Framework
2.6 Operationalization
of variables
2.6 Chapter
Summary
CHAPTER THREE
RESEARCH DESIGN AND
METHODOLOGY
3.0 Introduction
3.1 Research
Design
3.2 Target
Population
3.3 Sample and
sampling technique
3.5 Pilot
study
3.5.1 Validity
3.5.2 Reliability
test
3.6 Data
collection procedure
3.7 Data Analysis
and Presentation
3.8 Ethical
Consideration
3.9 Chapter
Summary
CHAPTER FOUR
RESEARCH FINDINGS AND DISCUSSION
4.0 Introduction
4.1 Presentation
of research findings
4.1.1 Response Rate
4.1.2 Respondents
demographic information
4.1.3 Main study
variables
4.1.3.1 Quality Management
4.1.3.4 Risk Management
4.3 Chapter
Summary
CHAPTER FIVE
SUMMARY, RECOMMENDATIONS AND
CONCLUSION
5.0 Introduction
5.1 Summary of
Findings
5.1.1 Quality
Management
5.1.2 Supplier
Optimization
5.1.3 Vendor
Development
5.1.4 Risk Management
5.2 Recommendations
5.3 Conclusion
REFERENCES
RESEARCH STUDY
QUESTIONNAIRES
CHAPTER ONE
INTRODUCTION
1.0
Introduction
This section reviews the research study
background, problem statement, objectives, research study questions,
significance and scope of the study which to determine the effects of effects
of purchasing strategies on organisational performance a case study of Goshen
children hospital Owerri.
1.1
Background of the Study
According to Terpend, Dooley and Krause
(2011) describe. There is a direct
connection between purchasing strategies and organization strategy. In other
words purchasing strategies, purchasing decisions and purchasing practices are
commonly used interchangeably to express decisions that are considered at
various stages of the purchasing process (Van Weele, 2010). With reference to
operation management purchasing strategies is referred to as decisions on
quality purchased, number of suppliers and supplier optimization strategies
among others. According to Cannon and Perreault (2009) organizations continue
to struggle with strategies in relations to suppliers and buyers. They further
indicate that it’s the buyer who decides on what to purchase or not and they
have outlined numbers of constructs such as information exchange, operational
linkage and legal bond.
Terpend, Dooley and Krause (2011) explain
that purchasing strategies are practiced in most organizations based on trial
and error that have affected the business environment. Research has shown and
identifies several factors that affect and determine the choice of purchasing
strategies such as the market, the product, the industry or the portfolio
model. According to Caniels and Gelderman (2010) portfolio model is the most
cited model where buyer and supply market strength is considered while Cox
(2013) focuses specifically on the power of his portfolio model which classify
buyer supplier power into four aspects; the buyer might have dominance, the
supplier might have dominance, they might be independent of each other and they
might be mutually interdependent. The buyer can leverage supplier’s performance
on cost and quality and to maintain only normal returns for the supplier this
occurs when the buyer is on a dominance position. While in the interdependence
position all the parties have resources that require them to closely work
together. But within the independent position where none of the partners has
leverage, it’s suggested that all the parties must accept the existing quality
levels and price (Cox, 2013). He further suggests that the situation to
slightly favour the buyer when the supplier have few chances to increase
leverage. And finally when the supplier is in a dominance position, the
supplier is required to incorporate market strategies against the potential
competitors to increase more than normal returns and the buyer is expected to
be the receiver of quality and price. The ideal position of suppliers would be
monopoly ownership on the in-imitable resources subject to transaction and
highly valued in the supply chain. For buyers on the ideal position is to have
monopsony power in being able to source from suppliers in highly economical
markets (Cox, 2013).
1.1.1
Organizational Performance
Organizational performance is a major
factor that maintains efficiency and effectiveness of organization that makes a
company to be more competitive at the market place. Establishments are formed
with employees, for that reason executives have to determine the causes that
lead to deteriorating of performance. Therefore it’s important to understand
internal forces as well as external forces affects performance of companies in
general (Green & Heywood, 2007).
According to Pinder (2008) efficiency of organization performance can be
determined by natural aptitude that the organization acquires over time. The
reason why a person is motivated to perform certain tasks but he does not have
the required knowledge for the job which they are required to do; work can
still be affected due inadequate skills required. According to Kreitner and
Kinicki (2011), workers' ability in determining the effectiveness of
performance is crucial for the organization, although staff with high
motivational level can still perform-well if they possess sufficient skills. In
order for staff to remain relevant at the work place their skills and ability
to do carry out in any assignment given to them by their employers. Individual performance can be identified by
role perception (Locke, 2011).
1.1.2
Profile of Goshen children hospital
The hospital was established in 1947 with
land donation from Colonel Ewart Grogan in memory of his loving wife Gertrude
Edith. Goshen children hospital is a
charitable trust which implies that all profit are ploughed back in the
hospital. The organization is managed by board of trusties who offers their
services voluntarily in running daily activities of the hospital and they are
also responsible for all policy decisions and they don’t receive any rewards or
emoluments for the charitable work they do.
The monies the hospital receives are used for hospitals routine
management. In April 2008 the hospital
marked its Diamond Jubilee which also marked as formal opening of new
outpatient department that included Accident and emergency unit and the Doctors
plaza. The means that the hospital can know offer one stop paediatric center
that can provide all available treatment that a child can require.
1.2
Statement of the Problem
Procurement departments are under
considerable pressure to deliver performance improvements in order to achieve
financial saving through more efficient and coordinated service delivery.
Organizations are in demand of increasing professionalism in the procurement
process. Procurement practices such as risk management, planning and supply
performance influence organization in achieving communication and collaboration
capabilities and at the same time maintaining the flexibility and
responsiveness capabilities of market-oriented governance structures.
Procurement best practices help organization in achieving cost reduction, new
product development, improved inventory management, information management,
improved customer service, material flows and improved performance in the
organization. According to Hassanzadeh and Jafarian (2013) best practices are
viewed as a strategic function working to improve the organization
profitability reduce raw material prices and cost and identifying better
sources of suppliers.
Several studies
have been conducted on best procurement practice and organization performance
such as Lee (2009) conducted a study on procurement best practices as measure
for improving efficiency, quality and delivery performance of suppliers.
Another study conducted by Mark, Wilson and Ram (2010) to investigate the
implementation of lean procurement among SMEs. In Kenya there are few
organization have successfully embraced procurement best practices like a study
conducted by Gitahi (2011) on e-procurement and employment qualification of
procurement staff at Cadbury Kenya ltd. Goshen
children hospital like most organization are affected by changes in the
external environment that include trading blocks, inadequate free movement of
goods, increasing cost of inputs, increased competition and improved customer
awareness. Despite all the measure put in place the organization still have
challenges with its procurement process there are concerns with regards as it
was suspected that some brokers are being selected to provide services at
children hospital. And there is a need to examine how the different vendors are
selected and how their selection has an implication on their performance of the
organization. This means measuring output in terms of time and quality of
delivery as per laid down standards it’s in this light that current study
intends to determine the effects of purchasing strategies on organisational
performance at Goshen children hospital.
1.3
Objectives
The underlying study objective is to
determine the effects of purchasing strategies on organisational performance a
case study of Goshen children hospital Owerri.
1.3.1
Specific Objectives
i. To examine how
quality management affects purchasing strategies at Goshen children hospital Owerri.
ii. To establish how
supplier optimization affects purchasing strategies at Goshen children hospital
Owerri.
iii. To
examine how vendor development affects purchasing strategies at Goshen children
hospital Owerri.
iv. To
establish how risk management affects purchasing strategies at Goshen children
hospital Owerri.
1.4
Research Questions
i.
To what extent does quality management affects
purchasing strategies at Goshen children hospital Owerri?
ii.
Does supplier optimization affects purchasing
strategies at Goshen children hospital Owerri?
iii.
To what extent does vendor development affects
purchasing strategies at Goshen children hospital Owerri? iv. To what extent does risk management
affects purchasing strategies at Goshen children hospital Owerri?
1.8 Significance of the Study
To management of Gertrude’s hospital,
scholars and individual researchers who used this study as basis for conducting
research in the same area to identify gaps in this study. The board of
directors and management can identify areas of weaknesses and the need to seek
strategies to know the importance of having efficiency of supply of products
and how to improve them.
Procurement department at Gertrude’s was
able to see suppliers who ensure operations are being performed in a manner
that is appropriate as it applies to their ethical, legal, environmental and
social responsibilities, from the study findings for the important information
the study shall obtain from the field will help in policy formation and better
management of funds allocated to strategic purchasing.
1.9 Scope
The research was confined to Goshen
children hospital head office located in Owerri. This study was conducted in
the month of May to July 2018. The researcher sampled employees in all level of
management and non-management staff in providing needed research information.
The study targeted 250 employees at Goshen children hospital.
1.10
Chapter
Summary
The chapter provides study background information the much need
information needed to place the study problem in proper context and
understanding, the chapter includes the outlines the background of the study,
statement problem, study objectives, significance and study scope. Therefore
this chapter guided as the as the norm which study variables are reviewed and
study is conducted in order to achieve the main research objectives and
determine the effects of effects of purchasing strategies on organisational
performance a case study of Goshen children hospital Owerri.
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