Procurement Practices’ Influence on Business Performance: An Analysis of Buyer-Supplier Relationships of Small and Medium Enterprises (SMEs) in Uasin Gishu County
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The study of procurement practices’ influence on business performance sparked interest among many researchers during the last two decades. However, very little literature deals directly with how firms’ procurement practices influence business performance. Also, most of the reviewed articles on procurement practices are conceptual rather than empirical in nature. As a result, many firms continue to struggle attempting to devise bespoke procurement practices link to overall business performance. It is against this back drop that this research sought to fill this void by examining the relationship between procurement practices, buyer - supplier relationships and business performance of Small and Medium Enterprises (SMEs) in Uasin Gishu County. SMEs contribute significantly to the Kenya’s National GDP and employ over 90% of the non – farming population. A cross – sectional study design was used. Collected data were analyzed using zero order correlations to determine the magnitude of the relationship between the variables and the multiple regression models to determine the variance in business performance predicted by buyer - supplier relationships and procurement practices. The targeted respondents for this study comprised of SMEs operators mainly drawn from services and manufacturing industries (within Uasin Gishu County) with direct or in-direct involvement or responsibilities with buyer and supplier procurement activities. A total of 112 respondents, participated in the surveys that lasted between 30 and 35 minutes per respondent. The research findings revealed that procurement practices and buyer - supplier relationships were significant predictors accounting for 29.6% of the variance in business performance of SMEs. These findings raise implications for owners / managers of SMEs as well as policy makers such as putting in place systems to support buyer - supplier relationships and improve procurement practices to ensure professionalism in order to improve business performance in terms of timely deliveries, flexibility and customer satisfaction.
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