Effect of Strategic Procurement Practices on Performance of Kenya Power and Lighting Company in Mombasa County
Keywords:
Strategic Procurement Practices, Negotiation Practice, Outsourcing Practice, Inventory Control Practice, Kenya Power and Lighting CompanyAbstract
The Procurement and disposal Act, of 2015, gives guidelines and power to parastatals to ensure that the procurement process is fair and efficient for the participants. However, there have been procurement irregularities in KPLC that have caused a massive financial haemorrhage. The purpose of the study was to examine the effect of strategic procurement practices on performance of Kenya Power and Lighting Company in Mombasa County. The specific objectives were to determine the effect of outsourcing, negotiation, tendering, and inventory control on performance of Kenya Power and Lighting Company in Mombasa County. The study had the resource-based view theory and transaction cost theory. It used a research approach and descriptive research design on a target population of 113 staff of four KPLC offices located in Mbaraki, Mombasa CBD, and Nyali. This study selected the staff using census method and issued questionnaires to all the respondents. The secondary data was generated from income statements and cash flow reports dating from 2020 to 2022. The questionnaire was pre-tested at the KPLC Kilifi county office. Face, content, and criterion validity were measured whereas Cronbach alpha was used to measure reliability. Descriptive statistics like frequencies, mean and percentages were analysed. The study used a thematic method to analyse the open-ended questions and tables, and explanations as main methods of data presentation. The study’s finding on outsourcing practice was that there was occurrence of delays in providing urgent services and products. On negotiation practice, KPLC’s negotiation process was affected by corruption by rogue staff with selfish interests. On tendering practice, there was low incorporation ICT into the tendering process. On inventory control methods, there was inconsistency of policy systems towards guiding quality warehouse management. The study recommendations on outsourcing practice are that the procurement department management conducts a thorough check on the potential products and services outsourced. On negotiation practice, KPLC senior management should develop and implement anticorruption policies on corrupt staff. On tendering practice, senior management should provide funds, increase awareness, and strengthen the ICT implementation policies. On inventory control practice, the procurement department staff undergo training on warehouse management and disposal management.
References
Affum, M.Q., Dwomoh, O.O., & Addae, M. (2023). Examining the effect of information technology in warehouse management: A case of electricity company of Ghana, cape coast. Library Philosophy and Practice (e-journal), 1(1), 1-54.
Assam, G., Ovharhe, H.O., & Chinedu, A. (2023). Strategic procurement initiatives and logistics performance in Nigeria. International Journal of Marketing and Communication Studies, 7(1), 38-55.
Asian Development Bank (2023). Annual procurement report. https://www.adb.org/sites/default/files/institutional-document/871831/annual-procurement-report-2022.pdf
Australian Government (2020). Summary of negotiating aims and approach. https://app-oc.readspeaker.com/cgi-bin/rsent?customerid=6248&lang=en_au;&readclass=main-content
Banker, R., Lee, S., & Park, H. (2023). Organizational constraints and outsourcing under demand uncertainty: Evidence from the Brazilian electricity distribution industry. Management Accounting Research, 60(2), 1-10.
Byrne, D.P., Martin, L.A., & Nah, J.S. (2022). Price discrimination by negotiation: A field experiment in retail electricity. The Quarterly Journal of Economics, 137(4), 2499–2537.
Chen, H.L. (2023). Influence of supply chain risks on project financial performance. International Journal of Production Economics, 260(1), 1-10.
Cheung, G.W., Cooper-Thomas, H.D., Lau, R.S., & Wang, L.C. (2023). Reporting reliability, convergent and discriminant validity with structural equation modeling: A review and best-practice recommendations. Asia Pacific Journal of Management, 1(1), 1-39.
Chui, L.S. (2020). Problems and consequences of poor procurement. https://publication.sipmm.edu.sg/problems-and-consequences-of-poor-procurement/
Congressional Research Service (2023). Overview of the federal procurement process and resources.
Cuypers, I. R., Hennart, J. F., Silverman, B. S., & Ertug, G. (2021). Transaction cost theory: Past progress, current challenges, and suggestions for the future. Academy of Management Annals, 15(1), 111-150.
European Commission (2022). Study on the performance of support for electricity from renewable sources granted by means of tendering procedures in the Union. Publications office of the European Union. https://data.europa.eu/doi/10.2833/93256
European Union (2020). Overview of FTA and other trade negotiations. http://trade.ec.europa.eu/doclib/docs/2006/december/tradoc_118238.pdf
Gatari, C. N., Shale, N. I., & Osoro, A. (2022). Inventory management and sustainable performance of state corporations in Kenya. International Journal of Supply Chain Management, 7(1), 56–68.
Gichuhi, R.W., & Waruguru, M. (2020). Influence of e-tendering process on procurement performance in geothermal development company in Nakuru, Kenya. The International Journal of Business Management and Technology, 4(5), 13-19.
Guma, P.K., Monstadt, J., & Scharmm, S. (2022). Post-, pre- and non-payment: Conflicting rationalities in the digitalization of energy access in Kibera, Nairobi. Digital Geography, 3(1), 1-10.
Hussein, N.A., & Makori, M. (2018). Influence of inventory management practices on performance of commercial state corporations in Kenya: A case of Kenya electricity generating company. The Strategic Journal of Business & Change Management, 5(1), 960-983.
Ingutia, C. (2020). Supply chain strategy and organizational performance of Kenya Power [Master’s Thesis, University of Nairobi]. Kenya. http://erepository.uonbi.ac.ke/bitstream/handle/11295/154091/Ingutia_Supply%20chain%20strategy%20and%20organizational%20performance%20of%20Kenya%20Power.pdf?sequence=1
International Monetary Fund (2023). Public procurement in South Africa: Issues and reform options. https://www.elibrary.imf.org/downloadpdf/journals/002/2023/195/article-A002-en.xml
Lingegård, S., & Oelreich, K. (2023). Implementation and management of a circular public procurement contract for furniture. Frontiers in Sustainability, 4(1), 1-16.
Maciej, B., & Alison, J. (2022). Populism and public procurement: An EU response to increased corruption and collusion risks in Hungary and Poland. Yearbook of European Law, 41(1), 11–47.
Mariam, N. R., & Kisimbii, J. (2020). Determinants of the implementation of e-procurement programs in parastatals; A case of Kenya Ports Authority. Journal of Entrepreneurship & Project Management, 4(1), 17-27.
Masoud, Y. (2023). Impediments to procurement performance in the parastatal organizations of Tanzania. International Journal of Research in Business and Social Science, 12(2), 187–196
Moshtari, M., Altay, N., Heikkila, J., & Goncalves, P. (2021). Procurement in humanitarian organizations: Body of knowledge and practitioner's challenges. International Journal of Production Economics, 233(34-47).
Mugenda, O. M., & Mugenda, A. G. (2003). Research methods: Quantitative and qualitative approaches. African Centre for Technology Studies.
Nikmard, F., Tavassoli, K., & Pourdana, N. (2023). Designing and validating a scale for evaluating the sources of unreliability of a high-stakes test. Language Testing in Asia, 13(2), 1-19.
Njeru, P., & Muthini, J.N. (2023). Influence of e-procurement practices on performance of county government in Kenya: A case of Meru County government. International Research Journal of Business and Strategic Management, 5(2), 101-109.
Nwankiti, C.O., & Air, C. (2023). Role of negotiation in buyer supplier relationship in the Nigerian oil and gas industry. Nigerian Journal of Management Sciences, 24(1), 235-243.
Odong’o, K.O., & Kazungu, I. (2023). Predictors of strategic procurement performance metrics adoption in county governments: Empirical evidence from Kakamega county government, Kenya. LBS Journal of Management & Research, 1(1), 1-23.
Poblete, L., & Halldórsson, Á. (2023). Sourcing energy services in business-to-business contexts: practices among end-customers. Energy Efficiency, 16(10), 1-23. https://doi.org/10.1007/s12053-023-10091-y
Presidential Taskforce (2021). Review of Power Purchase Agreements (PPAS). https://kplc.co.ke/img/full/28102021_210-The-Report-of-the-Presidential-Taskforce-on-PPAs.pdf
Raifman, S., DeVost, M.A., Digitale, J.C., Chen, Y., & Morris, M. (2022). Respondent-driven sampling: A sampling method for hard-to-reach populations and beyond. Current Epidemiology Reports, 9(1), 38–47.
Roy, P., Watkins, M., Iwuamadi, C.K., & Ibrahim, J. (2023). Breaking the cycle of corruption in Nigeria's electricity sector: Off-grid solutions for local enterprises. Energy Research & Social Science, 101(1), 1-12.
Saoke, M. (2021). The impact of centralization of the procurement function on service delivery in an organization: A case study of Kenya Electricity Generating Company Limited (Kengen). Afribary, 1(1), 1-44.
Saleem, S.Z.E.B.B. & Ullah, A. (2022). The pros and cons of inventory control strategies, and how does it affect the company’s performance. International Journal of Operations Management, 3(1), 7-13.
Siedlecki, S. L. (2020). Understanding descriptive research designs and methods. Clinical Nurse Specialist, 34(1), 8-12.
Sharma, L.R., Jha, S., Koirala, R., Aryal, U., Bhattarai, T. (2023). Navigating the research landscape: A guide to the selection of the right research design. International Research Journal of MMC (IRJMMC), 4(1), 64-78.
Sutha, S., & Nurhanani, R. (2023). A pilot study to test the reliability and validity of the research instrument. Malaysian Journal of Social Sciences and Humanities (MJSSH), 8(3), 1-7.
Surucu (2020). Validity and reliability in quantitative research. Business & Management Studies: An International Journal, 8(3), 2694-2726.
Theal, J., & Gomes, S. (2023). Elevated inflation raises risk of fiscal stress for states: High prices drive up spending and disrupt revenue trends. https://www.pewtrusts.org/en/research-and-analysis/articles/2023/01/11/elevated-inflation-raises-risk-of-fiscal-stress-for-states
Twesigye, P. (2022). Understanding structural, governance and regulatory incentives for improved utility performance: The case of Kenya and its Kenya power. Journal of Business Management, 4(2), 1-25.
Ullah, I., Khan, A.M., Hakal, M., Khalid, S., & Hashmi, M.A. (2023). Objective to conduct a pilot study in research. Journal of Positive School Psychology, 7(1), 1091-1100.
United Nations (2020). United Nations procurement manual. https://www.un.org/Depts/ptd/sites/www.un.org.Depts.ptd/files/files/attachment/page/pdf/pm.pdf
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171-80.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Shirlen Wanjiru Wambui , Peter Wamalwa Barasa
![Creative Commons License](http://i.creativecommons.org/l/by-nc-nd/4.0/88x31.png)
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.