PROCUREMENT PRACTICES AND PROCUREMENT PERFORMANCE OF OIL MARKETING COMPANIES IN KENYA

Abstract

This study investigated the procurement practices affecting procurement performance of oil marketing companies in Kenya. The study was anchored on social exchange theory, innovation diffusion theory and game theory. This study adopted cross-sectional descriptive research design. The target population comprised of all small and medium Oil marketing firms operating in Mombasa County which formed the unit of observation. The unit of analysis was the management staff drawn from procurement, supply chain, operations, finance and accounting and ICT. The sample size was 79 arrived at using Slovin’s formula from the target population. The collected data was coded and analyzed using the Statistical Package for Social Sciences (SPSS version 26) tool. The data analysis techniques employed included descriptive statistics which measured mean and standard deviation and regression analysis which was conducted to test whether the strength of the relationship between the independent variables and the dependent variable were statistically significant. Analyzed data was presented using frequency and descriptive tables. The study results established that procurement performance demonstrated a substantial positive link with procurement practices, according to the correlation coefficient index. In addition, ANOVA was used to assess the regression model's validity. With a p-value of 0.05, the results showed that the model was valid for assessing the relationship between the research variables. The procurement performance of Oil marketing firms in Kenya was significantly and favorably affected by procurement practices as indicated by the coefficient of determination (r 2 ) in the model summary. The study concluded that the company upholds supplier collaboration to enhance buyer-supplier relationships. Also there is open communication between the companies and oil suppliers. The oil companies undertook vendor development periodically to ensure they meet the required standards and that the oil companies promote alliance-based relationships with suppliers. The study recommended that the oil marketing companies should periodically identify the market oil needs to determine the capacity to procure. Further, the oil marketing companies should perform cost estimation before procuring oil supplies. Key Words : Supplier Relationships, Procurement Planning, Purchase Order Tracking, Supplier Sourcing CITATION : Amur M., & Kitheka S., (2023). Procurement Practices and Procurement Performance of Oil Marketing Companies in Kenya. The Strategic Journal of Business & Change Management, 10 (3), 404 – 419.