Procurement processes and organizational performance of selected public institutions in Kenya.

Abstract

Effective procurement processes are crucial for improving the performance of public sector organizations. The purpose of this study was to investigate the influence of procurement process on the performance of public sector organizations. It was guided by the following specific objectives: i) to establish the effect of procurement planning on performance of the public sector organizations; ii) to evaluate the effect of Supplier selection on performance of the public sector organizations; iii) to examine the effect of Contract management on performance of the public sector organizations. The study was guided by the Principal-Agent and Transaction Cost theories. The study employed a descriptive research design. 200 structured questionnaires were distributed and 188 successfully returned for data analysis, representing a response rate of 94%. The sample was drawn from top-level managers, middle-level managers, and support staff involved in procurement processes. The data were analysed using SPSS v28 and presented in tables and graphs. Data analysis, including correlation and regression, showed that procurement planning, supplier selection, and contract management all positively influenced organizational performance, with contract management having the strongest impact (16% variance in performance). Procurement planning and supplier selection had weaker but still significant effects. The study concludes that enhancing contract management and procurement processes leads to better organizational performance. It is recommended that public sector organizations invest in improving procurement planning, supplier selection, and especially contract management for greater performance. Further studies could explore additional variables such as procurement technology and the role of transparency in improving public sector procurement.