Effect Of Supplier Selection Criteria On Organizational Performance Of The County Government Of Kisumu

Abstract

ABSTRACT Supplier selection has become an integral function of any organization, seeking to identify, evaluate and contract suppliers. Organizations are often outsourcing non-core activities, leading to dependence and reliance on suppliers. However, question arises as to the criteria used by public sector in selecting and evaluating suppliers. It is in public domain that public sector’s runaway expenditure and tendency of delivering substandard goods, works and services. The County Government of Kisumu has over the years experienced, none completion of works such as roads, which are often viewed as sub-standard or terminated due to none completion. Thus emphasis on the importance of supplier selection criteria in public entities cannot be undermined. The purpose of the study therefore was to find out the effect of supplier selection criteria on organizational performance of County Government of Kisumu. To achieve this objective, the study used the following specific research objectives; to establish the relationship between financial ability and organizational performance; to determine the relationship between production capability and organizational performance and to examine the relationship between human resource base and organizational performance. The study used stratified sampling technique, where 132 respondents representing the target population of 200.The population included; Procurement (38), Engineering (20) and Finance staff (74). The researcher analyzed collected data using regression analysis was used to establish the effect of Supplier selection criteria on organizational performance of County Government of Kisumu. The researcher used questionnaire as the primary research instrument to collect data. On the validity of the instrument, the researcher content validity, while reliability was established by use of Cronbach’s Alpha coefficient that yielded values of 0.812, 0.778, 0.712 and 0.704 for financial ability, production capability, Human resource base and organizational performance respectively, given the threshold values were above 0.7 which was acceptable implying the instrument, was reliable. The researcher then analyzed the where descriptive statistics were generated in terms of frequencies, percentages and means among others and results were presented in and frequency tables. The analysis of the study revealed that; financial ability has a significant relationship with organizational performance (r=.397; p=.012), production capability has a significant relationship with organizational performance (r=.603; p=0.000) and human resource base also a significant relationship with organizational performance (r=703; p=012). Hence County Government of Kisumu should emphasize the use of financial ability, production capability and human resource base as supplier selection criteria in order to enhance overall organizational performance. The study suggests that the county should invest heavily on supplier selection policies, in order to make the stakeholders of the county have confidence in the level of performance. Further studies should be conducted to relate supplier evaluation criteria and organizational performance in other public procuring entities. Lastly, further study may also conduct supplier selection criteria in media industry.