ASSESSMENT OF FACTORS AFFECTING COMPETITIVE BENCHMARKING …
Transcript of ASSESSMENT OF FACTORS AFFECTING COMPETITIVE BENCHMARKING …
ASSESSMENT OF FACTORS AFFECTING COMPETITIVE
BENCHMARKING PROCESS ON PROCUREMENT PERFORMANCE; A
CASE STUDY OF NAIVAS SUPERMARKET, KISII BRANCH.
OROO M. AGNES
A Research Project Submitted to the Board of Undergraduate Studies in Partial
Fulfillment of the Requirement for the Award of Diploma in Purchasing and
Supplies Management in the School of Business and Economics .
KISII UNIVERSITY
November, 2017
ii
DECLARATION AND RECOMMENDATION
DECLARATION
This research project is my original work. No part of this proposal has been presented
for examination in any other university for examination.
……………………………………… ……………………………
Signature Date
OROO M. AGNES
CB05/10718/15
RECOMMENDATION
This research project has been submitted with my approval as Kisii University
Supervisor.
……………………………………… ……………………………
Signature Date
Mr. Eliud Onyiego
Assistant Lecturer, School of Business and Economics
Kisii University
iii
COPYRIGHT
©2017 AgnesMOroo
.All rights reserved. No part of this project may be photocopied, recorded, or
otherwise produced, stored in a retrieval system or transmitted in any form or by any
electronic or mechanical means without prior permission of the copyright owner.
iv
DEDICATION
This research project is dedicated to my family members Evans, Teresa, Erick, Erick,
Hyline, Josephine, Lydiah, Judy, Edwin and Kevin for their encouragement and
financial support. .
v
ACKNOWLEDGEMENT
I extend my thanks to my supervisor, Mr. Eliud Onyiego for guidance throughout the
research process. His support has enabled me to produce this work. I also
acknowledge my colleagues at the university for their tireless motivation all through
this study without forgetting our library team which provided articles which had
sufficient secondary data.
vi
ABSTRACT
The purpose of this study assessed the effect of competitive benchmarking process on
procurement performance in reference to Naivas Supermarket, Kisii Branch. The study
was guided by three objectives; To establish the extent to which employee competency
affect competitive benchmarking on procurement performance at Naivas Supermarket –
Kisii Branch, To establish the extent to which organizational structure affect competitive
benchmarking on procurement performance in Naivas Supermarket - Kisii Branch, To find
out the extent to which top management support affect competitive benchmarking process
on procurement performance in Naivas Supermarket – Kisii Branch. The study was
confined to Naivas Supermarket, Kisii County with reference to the effects of competitive
benchmarking process on supply chain performance. Case study design was used because
it enabled the researcher to get information on the effects of competitive benchmarking
process on the supply chain performance in Naivas Supermarket. The target study targets
100 employees where by census sampling was used to get a sample size of 100
respondents. The findings revealed that Organizations face enormous challenges in their
daily operations hence calling for benchmarking. Given the complexity of the services the
organization provides, the top management should provide managerial support to
employees to improve employee motivation, job satisfaction and retention. The chain of
command as well has posed several challenges since the juniors need only to communicate
to the top management through their supervisors. In this case some information is not
conveyed at the right time or it’s distorted. Lack of enough funds has been another factor
leading to competitive benchmarking hence forcing more organizations to go for merger
and acquisitions to compete in the industry. The researcher recommends that, management
of those organizations that have competitive benchmarking on procurement performance
must start employing it by constantly organizing training and development programs for
employees of the organization on how to improve their skills before its implementation to
improve organizational performance. Local companies have been exposed to financial
challenges whereby they lack expertise, inadequate funds and as well their organizational
structure do not follow their objective and goals. Therefore its high time local companies
benchmark from multinational companies to avoid their services and goods being obsolete
due to stiff competition.
vii
TABLE OF CONTENTS
DECLARATION AND RECOMMENDATION .................................................................. ii
COPYRIGHT .......................................................................................................................... iii
DEDICATION ........................................................................................................................ iv
ACKNOWLEDGEMENT ....................................................................................................... v
ABSTRACT ............................................................................................................................. vi
TABLE OF CONTENTS ...................................................................................................... vii
LIST OF TABLES .................................................................................................................. ix
LIST OF FIGURES ................................................................................................................. x
LIST OF ABBREVIATIONS ................................................................................................ xi
CHAPTER ONE ...................................................................................................................... 1
INTRODUCTION.................................................................................................................... 1
1.1 Background of the study ...................................................................................................... 1
1.2 Statement of the Problem ................................................................................................... 2
1.3 Objectives of the Study ....................................................................................................... 2
1.3.1General objective .......................................................................................................... 2
1.3.2 Specific Objectives ...................................................................................................... 3
1.4 Research Questions .............................................................................................................. 3
1.5 Scope of the Study ............................................................................................................... 3
1.6 Significance of the Study ..................................................................................................... 3
1.7 Limitation of the Study ........................................................................................................ 4
1.8: Operational Definition of Terms ......................................................................................... 4
CHAPTER TWO ..................................................................................................................... 5
LITERATURE REVIEW ....................................................................................................... 5
2.1 Theoretical Literature ........................................................................................................... 5
2.1.1 Resource Based View Theory ..................................................................................... 5
2.1.2 Stakeholder Theory ...................................................................................................... 5
2.2. Empirical Literature ............................................................................................................ 6
2.2.1 Employee Competency ................................................................................................ 6
2.2.2 Organizational Structure .............................................................................................. 7
2.2.3 Top Management Support ........................................................................................... 8
2.3 Knowledge Gaps .................................................................................................................. 9
2.4 Conceptual Framework. ..................................................................................................... 10
2.4.1Explanation of the Variables ............................................................................................ 10
CHAPTER THREE ............................................................................................................... 11
RESEARCH DESIGN AND METHODOLOGY ............................................................... 11
viii
3.1 Research design ................................................................................................................. 11
3.2 Study area .......................................................................................................................... 11
3.3 Target population ............................................................................................................... 11
3.4 Sample size and sample procedure .................................................................................... 11
3.5 Data collection and procedure............................................................................................ 12
3.6 Instrumentation .................................................................................................................. 12
3.6.1 Validity of the research instruments .......................................................................... 12
3.6.2 Reliability of the Instruments .................................................................................... 12
3.7 Data Analysis and Presentation.......................................................................................... 12
CHAPTER FOUR .................................................................................................................. 13
DATA ANALYSIS AND INTERPRETATIONS ................................................................ 13
4.1 Response Rate .................................................................................................................... 13
4.2.1 Respondents’ Gender ................................................................................................. 13
4.2.2 Level of Education ..................................................................................................... 14
4.2.3 Work Experience of Respondents ............................................................................. 14
4.2.4 Factors of employee competency that affect competitive benchmarking process. .... 14
4.2.5: Effect of organizational structure factors on competitive benchmarking process. ... 15
4.2.6: Effect of top management support factors on competitive benchmarking process. 16
CHAPTER FIVE ................................................................................................................... 18
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS........................................ 18
5.1: Summary ........................................................................................................................... 18
5.2: Conclusion ........................................................................................................................ 18
5.3: Recommendations ............................................................................................................. 19
5.3.1 Recommendations on policy and practice ................................................................. 19
5.3.2: Suggestions for further Study ................................................................................... 19
REFERENCES ....................................................................................................................... 20
APPENDIX I : QUSTIONNARE ......................................................................................... 22
ix
LIST OF TABLES
Table 3.1: Target population…………………………………………….………….11
Table 4. 1: Level of education……………………………………………………….14
Table 4.2: Work Experience of Respondents………………………………………...14
Table 4.3: Factors of employee competency that affect competitive benchmarking
process………………………………………………………………………………………..14
Table 4.4: Effect of organizational structure factors on competitive benchmarking
process………………………………………………………………………………………..17
Table 4.5: Effect of top management support factors on competitive benchmarking
process………………………………………………………………………………………..18
x
LIST OF FIGURES
Figure 2.1: Conceptual framework…………………………………………………..10
Figure 4.1: Response Rate……………………………………………………………13
Figure 4.2: Respondents’ Gender……………………………………………………………14
xi
LIST OF ABBREVIATIONS
ISO – International Standardization for Organizations.
JIT – Just In Time
PSM – Purchasing and Supplies Management
RBV – Resource based ViewTheory
1
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
In the modern world competition is no longer between organizations, but among supply chains.
Effective supply chain management has therefore become a potentially valuable way of securing
a competitive advantage and improving organizational performance (Moultrie et al. 2006).
However, the understanding of the why and how effective supply chain management affects firm
performance, which areas are especially important and which are the important moderator effects
is still incomplete. Benchmarking has emerged as one of the most important business and
economic concepts for achieving competitive advantage. Benchmarking can be defined as “the
process of measuring the performance of one's company against the best in the same or another
industry”.
Efficiently and effectively leveraging supplier capabilities can be a source of competitive
advantage (Gottfredson et al., 2005). For example, innovative benchmarking and standardisation
of purchasing can lead to cost and time reduction, improved quality, enhanced flexibility, faster
delivery and better decision making. In this complex and competitive business environment,
manufacturing firms are constantly facing challenges, due to ever-increasing customer
expectations for better quality, cheaper price and faster delivery (Lawson et al., 2009;
Narasimhan et al., 2010). To meet these rising customer expectations, manufacturing firms are
also putting pressure on their suppliers to comply with this shift in customer demands. Hence,
according to prior research, suppliers are looking for innovative purchasing and supply
management (PSM) practices to keep up with this dynamic field (Lawson et al., 2009; Lee and
Drake, 2010). Due to these changes in the competitive manufacturing environment and supply
management practices, it is crucial to understand what kinds of PSM practices will lead to better
performance. Based on this context, the objective of this article is to investigate innovative PSM
practices and their impact on purchasing and business performance. The current study builds on
one of the PSM research opportunities identified by Schoenherr et al. (2012), which is to
investigate PSM approaches to manage performance. To keep up with this competitive
dynamics, firms must continuously adopt innovative PSM capabilities. Having such capabilities
is considered to be like having unique resources that can be a source of competitive advantage.
2
The drivers behind benchmarking are to gain low production cost by access to low cost, utilize
local firm’s resources thus avoid capital investment on fixed asset for developing non-core
products, and to gain access to technology. Benchmarking concept emphasis on tactical benefits
like cost reduction, cheaper labor cost in low cost countries, productivity, flexibility, speed and
innovation in developing business applications, and access to new technologies and skills.). As a
result, many companies have reverted to benchmarking their supply chain activities.
Benchmarking is therefore more and more of strategic importance. Third world countries
especially in Africa are getting more focus on benchmarking process to get access to low
production cost and internationalization of complete production chain; this has contributed to
rapid growth in trade (Lockamy III et al. 2008). Benchmarking often consists of comparing
performance outcomes with the outside world and the difference between the figures is
considered the gap to close in the near future.
1.2 Statement of the Problem
Benchmarking is basically learning from others. It is analyzing the performance and noting the
strengths and weaknesses of the organization and assessing what must be done to improve. There
is need for Naivas Supermarket to entirely dominate the market share in the industry as well as in
the local customers. There has been a lot of marketing strategies to maintain their loyalty at the
peak hence forcing them to go for competitive benchmarking. Due to ever changing trends in the
environment most companies are working 24/7 to maintain their dominance level. The success of
benchmarking process depends on a number of factors which can affect the overall efficiency of
entire supply chain. Therefore, to reduce inefficiency factors and ensure smooth operations
different actors should have to be aware of the impacts in order to achieve better performance in
whole supply chain. This study therefore seeks to assess the effect of competitive benchmarking
process on procurement performance.
1.3 Objectives of the Study
1.3.1 General objective
The purpose of this study was to assess the effect of competitive benchmarking process on
procurement performance at Naivas Supermarket – Kisii Branch.
3
1.3.2 Specific Objectives
i. To establish the extent to which employee competency affect competitive
benchmarking on procurement performance at Naivas Supermarket – Kisii Branch.
ii. To establish the extent to which organizational structure affect competitive
benchmarking on procurement performance in Naivas Supermarket - Kisii Branch.
iii. To find out the extent to which top management support affect competitive
benchmarking process on procurement performance in Naivas Supermarket – Kisii
Branch.
1.4 Research Questions
The study was guided by the following questions:
i. To what extent does employee competency affect competitive benchmarking on
procurement performance in Naivas Supermarket-Kisii Branch?
ii. To what extent does organizational structure affect competitive benchmarking on
procurement performance in Naivas Supermarket – Kisii Branch?
iii. To what extent does top management support affect competitive benchmarking on
procurement performance in Naivas Supermarket – Kisii Branch?
1.5 Scope of the Study
The study was confined at Naivas Supermarket, which is located in Kisii central Sub-County,
Kisii County with reference to assess the effect of competitive benchmarking process on
procurement performance within the time scope of 2 months.
1.6 Significance of the Study
The study will be of great importance to many supermarkets in the country since;
The findings and recommendations will help in decision making to enhance benchmarking
concept on the supply chain performance of the products.
Internal benchmarking will be used to identify the best in house practices in the organization and
to disseminate these practices throughout the organization. Internal benchmarking also allowed
managers in the organization to be more knowledgeable about the organization as a whole. The
study will be of significant contribution to academic literature in the field of procurement in
Kenya.
4
1.7 Limitation of the Study
The findings of the study can only be duplicated in other parts of the country with caution and
cannot be generalized. The respondents may be suspicious about the investigation and may end
up revealing wrong information however, the researcher will overcome this by explaining to the
respondents the aim of the research as only for studying before filling the questionnaire.
1.8: Operational Definition of Terms
Benchmarking – this is the process of measuring performance of one’s company against the
best in the same or another industry.
Just In Time – this is an inventory control philosophy whose goal is to maintain enough
materials in just the right place at just the right time to make just the right amount of product.
Purchasing – is a process of acquiring goods, services or work in return for a price.
Supply Chain Performance – is a set of synchronized decisions and activities utilized to
efficiently integrate suppliers, manufacturers and customers so that the right product or service is
distributed in the right quantities to the right locations and at the right time in order to minimize
system-wide costs while satisfying customer service level requirement.
5
CHAPTER TWO
LITERATURE REVIEW
2.1 Theoretical Literature
2.1.1 Resource Based View Theory
The RBV developed as a complement to the industrial organization view with Bain (1968)
and Porter (1985) as some of its main proponents. With its focus on the structure conduct-
performance paradigm, the industrial organization view put the determinants of firm
performance outside the firm, in its industry’s structure. Being positioned against this view,
the RBV explicitly looks for the internal sources of sustained competitive advantage and
aims to explain why firms in the same industry might differ in performance. As such, the
RBV does not replace the industrial organization view, rather it complements it (Peteraf&
Barney, 2003).
RBV proponents argue that simultaneously valuable, rare, inimitable and non-substitutable
resources can be a source of superior performance and may enable the firm to achieve
sustained competitive advantage. The RBV of the firm is therefore a suitable approach to
understanding the competitive dynamics whereby resources are intangible and tangible
assets linked to the firm in a semi-permanent way, including: technological, human and
physical assets. However, having resources alone is not sufficient, therefore, RBV theory
adds a category of capabilities which result from complex patterns of interactions and
coordination between resources (Wong &Karia, 2010).
RBV maintains that resources and capabilities are often synergistic in nature and can be
more valuable when combined. RBV proposes that firms have different resource
endowments, and that the manner in which they require, develop, maintain, bundle and
apply them leads to the development of competitive advantage and superior performance
over time. RBV tenets prescribe that resources and capabilities, for instance bundle of
resources need to be valuable, rare, inimitable and organizationally utilizable, for example a
firm has complementary resources to leverage and maximize capabilities to drive sustainable
competitive advantage. In general, RBV theory indicates that exploiting a firm’s non-
imitable resources enables a firm to create long-lasting competitive capabilities and to
generate a competitive advantage (Paulraj, 2011).
2.1.2 Stakeholder Theory
The origins of stakeholder theory draw on four key academic fields: sociology, economics,
politics and ethics and especially the literature on corporate planning, systems theory,
6
corporate social responsibility and organizational theory. Freeman (1984), over the course of
his work entitled Strategic Management: a Stakeholder approach, generally accepted as
launching the stakeholder theory concepts, defines how stakeholders with similar interests or
rights form a group. What Freeman was seeking to explain was the relationship between the
company and its external environment and its behavior within this environment. The author
set out his model as if a chart in which the company is positioned at the center and is
involved with stakeholders connected with the company. In this model, the company-
stakeholder relationships are dyadic and mutually independent (Frooman, 1999).
The theory focuses upon management decision making, explains how stakeholders try and
influence organizational decision making processes so as to be consistent with their needs
and priorities. In terms of organizations, these should attempt to understand and balance the
interests of the various participants. Taking these premises into consideration, and according
to Baldwin (2002), the concept of stakeholder management was developed so that
organizations could recognize, analyze and examine the characteristics of partners being
influenced by organizational behavior. Thus, management is carried out over three levels:
the identification of stakeholders, the development of processes identifying and interpreting
their needs and interests and the construction of relationships with the entire process
structured around the organization’s respective objectives.
2.2. Empirical Literature
2.2.1 Employee Competency
HayGroup (2004) point out that an organization’s best source of competitive advantage lies
with its employees. Strategies, business models, products and services can all be copied by
competitors, but talented and competent employees represent a sustainable source of
differentiation. The demand for effective and competent employees continuously increases
in both public and private organizations because a dynamic global marketplace and
increasing foreign competition has compelled organizations to become more effective and
flexible in response to the rapidly changing environment. As a result, this is a suitable time
to assess human resource management (HRM) practices that can augment organizational
performance in public sector organizations (Gould-Williams, 2003). Organizations try to
increase their capabilities by investing more in training and management development and
Ichniowski et al. (1996) state that HRM practices have a greater effect on organizational
performance than on individual performance. Moreover, human resource development
7
encourages competency development by forming opportunities within the organization for
employees to develop their competencies for both their own benefit and the benefit of others
(Rao, 2000a; Rodrigues & Chincholkar, 2005). The competency-based approach has become
integral in HRM during the last thirty years and, currently, different organizations,
businesses and public services use competency models to better integrate global trends and
business strategies with their human capital resources. Competency encompasses the
knowledge, skills, abilities, traits and behaviors that allow an individual to perform a task
within a specific function or job. In accordance with this approach, competencies are used as
the basis for human resource management. The use of competency modeling. Competency
models help organizations to take a more unified and coordinated approach in designing
improvements to HRM systems, including job redesign, recruitment, organizational
learning, career management, performance improvements and compensation systems
(United Nations Industrial Development Organization, 2002). In implementing effective
HRM the introduction of competency building programs for each job or task should be
considered, as an employee’s competencies are usually linked to their job and, hence, to
organizational performance. Therefore, improving employee competencies would improve
both job and organizational performance and an organization needs to hone the
competencies of individual employees to support a competitive strategy.
2.2.2 Organizational Structure
Aghajani and others (2013) found the significant relationship between organizational
structure and competitive benchmarking in Saveh Pars Company. Also the results have
shown the significant relationship between the level of formalization, complexity,
centralization and creativity of employee in regards to competitive benchmarking. Shaemi
Barzoki and colleagues (2013) determined organization’s structure dimensions effect on
competitive benchmarking. They found that formalization, standardization, hierarchy of
authority, centralization and professionalism dimensions had affected organizational trust
and complexity, specialization, employee ratio and management ratio dimensions didn’t
affect organizational trust in this company.
Zhang and others (2010) studied the possible mediating role of knowledge management in
the relationship between Organizational culture, structure, strategy and organizational
effectiveness. The results suggest that knowledge management fully mediates the impact of
organizational culture on organizational effectiveness and partially mediates the impact of
organizational structure and strategy on organizational benchmarking. According to
8
Vineburgh (2010) higher levels of empowerment, higher levels of support for innovation,
and lower levels of interpersonal conflict were associated with higher levels of
organizational trust. Lewis (2011) conducted a study in order to examine the effects a
bureaucratic organization on communication capacity of management information system.
The results identified traditional organizational structures create vertical and horizontal
boundaries impeding communication. The findings determined the critical aspects to
improve communication through the reduction of boundaries was direct leadership support
for a centralized management information system team with clear responsibility,
accountability and authority to facilitate organizational communication. Veisi (2012) in an
investigation which conducted in Bank found out that the positive relationship is between
organic structure and participatory culture. Also there is significant relationship between
mechanical structure and bureaucratic culture. Powley and Nissen (2012) examined the
effect of trust levels and organizational design on performance. The results have shown that
trust and organizational design have strong interactions and that hierarchical organizations
experience performance levels well below flexible organizational structures.
2.2.3 Top Management Support
According to Chari et al. (2016) management support influence all aspects of procurement
performance and competitive benchmarking ranging from establishing new systems as well
as improving levels of transparency. Lack of management support has also been responsible
for the failure of many procurement initiatives. According to the research management
support is important because it is the top management who approve funding for specific
procurement initiatives. Additionally, the management has the sole responsibility of rallying
employees behind any procurement leading to its eventual success. The above sentiments
are shared by Kemunto and Ngugi (2014) whose research showed that leadership and
management support play a critical role in enhancing organizational performance.
Specifically, leadership and management support collaborative relationships between a
company and its suppliers, facilitating transparent negotiations and also long term
relationships that eventually lead to procurement of high quality inputs at affordable prices.
This improves organizational performance. © Karungani & Ochiri Licensed under Creative
Common Page 814 Mose et al. (2013) believe that for any procurement imitative to be
successful, it must enjoy full management support. The top management is charged with the
responsibility coming up with goals and visions of the organization, enhancing commitment
to change in the organization’s structure and processes as well as in formulating strategies
9
and policies necessary in enhancing procurement performance. Therefore, if any
procurement initiative lacks the support of top leadership and management, its chances of
success are slim. The top management is, therefore, required to give appropriate support and
attention to the procurement in order to bring forth improved organizational performance.
Amemba et al. (2013) also supports the above views by asserting that top management
support for collaborative relationships between the buyers and suppliers is essential for
enhancing organizational performance. The success of an organization’s procurement
process is highly dependent on the support attained from the company’s management.
2.3 Knowledge Gaps
Manufacturing firms in Kenya are continuously increasing and their role in economic
development has been noted over the decades by create employment in their industry and
provide meaningful competition in goods and service delivery in the industry. (Cagliano et
al., 2011). The Manufacturing firms in Kenya have come under very strong attack as a result
of competition between themselves leading to the companies unable to meet their financial
obligations as and when they fell due since they spend a lot of funds in advertising. Indeed,
Xerox Company collapsed since it was unable to compete favorably in the market. This had
been credited as a major cause of its liquidation (Mitau 2013). This shows that
manufacturing firms in Kenya are not immune to competitive benchmarking problems.
According to findings from the selected literature review, it can be concluded that the most
important factors affecting supply chain performance are; quality improvement on products
and services, improved production efficiency by implementing Total Quality Management
practices in production, practice of costs reduction on purchases of materials and labour,
enhancing competitive advantage and improved performance and long term efficiency goals.
Husband and Mandal (2009) assessed the effects of benchmarking practices on financial
performance of small and medium enterprises in Kenya and identified the uniqueness of a
SME‟s manufacturing operations as being a limiting factor to quality enhancement
implementation and provide a series of dimensions that are unique to SMEs. The study
focused on small scale enterprise at the expense of manufacturing ones by only analyzing
small scale enterprise in Kenya. Magutu (2006) conducted a survey of benchmarking
practices in higher education in Kenya the case of public universities. The study found out
that continuous improvement systems in Kenyan public universities are good, not excellent.
The study focused on small public universities at the expense of manufacturing ones. It is in
10
Employee
competency
Employee skills
Employee capability
Procurement Performance
Effectiveness and
Efficiency
Profitability
this respect that this research will seek to fill the gap by assessing the effects of competitive
benchmarking process on supply chain performance in Naivas Supermarket, Kisii County.
2.4 Conceptual Framework.
Independent Variables Dependent Variable
Competitive Benchmarking
Intervening Variables
Figure 2.1: Conceptual Framework.
Source: Researcher, (2017)
2.4.1Explanation of the Variables
The main dependent variable is procurement performance represent by effectiveness,
efficiency and profitability. Independent variables comprise of; employee competency,
organizational structure and top management support whereas intervening variable include
government policy. Competitive benchmarking is conceptualized to improve overall
performance of the organization through maximization of organization resources.
Organizational
structure
Chain of command
Communication
channel
Top management
Support
Management
prioritization
Organization resources
management
Government Policies
Technology
11
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 Research design
Nachmias and Nachmias (1996) assert that research design refers to the master plan that will
be used in the study in order to answer the research questions. This study adopted a case
study research design which concerned with finding out the Naivas Supermarket.
3.2 Study area
This study was carried out in Naivas Supermarket – Kisii Branch. This company is situated
Kisii central Sub-county. Therefore, the researcher is interested to assess their strategies
adopted by this supermarket to gain leverage.
3.3 Target population
In this study the target population comprised of 100 employees who were drawn from a
population consisting of four (4) departments; procurement department, production
department, marketing department and sales and distribution department. The table below
shows distribution of the target population.
3.4 Sample size and sample procedure
The study adopted census sampling technique where by 100 employees were used for this
particular study. Therefore, our sample size was 100.
Table 3.1 Target population
Departments No. of employees targeted Sample size
Procurement 30 30
Production 25 25
Marketing 23 23
Sales and distribution 22 22
Total 100 100
Source: Researcher (2017)
12
3.5 Data collection and procedure
Both primary and secondary data was used in the study. Primary data was collected using
structured questionnaire. Secondary data was gathered from organizations records. The
questionnaires were dropped and picked from the respondents after a period of one week.
3.6 Instrumentation
The data collection instruments for this study included questionnaires which were
administered to each employee and managers from the four departments. These instruments
will be used to gather data related to the effect of competitive benchmarking process on
procurement performance in Naivas Supermarket.
3.6.1 Validity of the research instruments
Validity of research instruments ensure scientific usefulness of the findings arising thereof.
(Serakan; 2003; Nachmias and Nachmias, 1996). Validity is the extent to which the
instruments captured what they purport to measure. Validity of the instruments is critical in
all forms of researches and acceptable level is largely dependent on logical reasoning,
experience and professionalism of the researcher (Cooper, 2008). To uphold content
validity, the researcher discussed the contents of the questionnaires with the supervisor
before going to the field. These ensured that vague and unclear questions were eliminated or
corrected.
3.6.2 Reliability of the Instruments
The reliability of a research instrument concerns the extent to which the instrument yields
the same results on repeated trials. Pilot-testing of the tools was done immediately in order
to make the instrument reliable. Nachmias and Nachmias (1996) notes that pilot-testing is an
important step in the research process because it revealed vague questions and unclear
instructions. It also captures important comments and suggestions from the respondents the
researcher improved efficiency of instruments, adjust strategies and approaches to maximize
response rate. In this study the questionnaire were pilot tested to 4 employees of Kenya
Power Company to determine the reliability of the instruments.
3.7 Data Analysis and Presentation
The study used descriptive statistical techniques such as percentages and frequencies to
analyze the data. The analyzed data was presented in frequency tables.
13
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATIONS
4.1 Response Rate
The study response included 100 questionnaires distributed upon collection 20 were found to
not meeting the respective terms and so 80 were accepted for data analysis.
Figure 4. 1 Response Rate
Source: Field Data, 2017.
The Figure 4.1 represents 80% of the accepted questionnaires and 20% of the defective
questionnaires implying an adequate participation in the study.
4.2.1 Respondents’ Gender
The researcher sought to find out the gender participation in the study and the findings are as
presented below;-
Figure 4. 2 Respondents' Gender
Source: Field Data, 2017.
The study found out 54% were male and 46% were female as indicated in Figure 4.2. It
implies that there is a gender balance inclusivity.
0
20
40
60
80
100
Frequency Percentage
Accepted Defective
54%
46%
yes No
14
4.2.2 Level of Education
The researcher sought to find out the level of education of the respondents and the results are
as shown below;-
Table 4. 1 Level of Education
Education Frequency Percentage
Diploma graduates 12 16%
O-level graduates 42 53%
16% First Degree graduates 13
12 Masters graduates 15%
Total 80 100%
Source: Field Data, 2017.
The study found out that most respondents were secondary school graduates, college
graduates, university graduates and professional course graduates.
4.2.3 Work Experience of Respondents The study sought to establish the work experience of the respondents and the findings are as
shown;-
Table 4. 2 Work Experience of Respondents
Education Frequency Percentage
Less than 1 Year 13 16%
Less than 5 Years 42 53%
Less than 10 Years 13 16%
Above 10 Years 12 15%
Total 80 100%
Source: Field Data, 2017.
The researcher sought out to find the number of years the staff handling procurement have
served. The study found out, at 16% have served for less than 1 year, 53% have served less
than 5 years, 16% have served less than 10 years and 15% have served above ten years as .
4.2.4 Factors of employee competency that affect competitive benchmarking
process.
The researcher sought employee competency factors that affect competitive benchmarking
process and the results are as presented below;-
SA – Strongly agree, A – Agree, UN-undecided, D-Disagree, SD- Strongly Disagree
15
Table 4.3: Factors of employee competency that affect competitive benchmarking
process.
Factors SA A N DA SD ∑𝒇𝒊
∑𝒇𝒊𝑊𝑖
∑𝒇𝒊𝑊𝑖
∑𝒇𝒊
Employee
Skills
Nil 35 176 58 Nil 80 269 3.3
Employee
communication
70 116 66 28 Nil 80 280 3.5
Staff ethics Nil 60 56 66 62 80 324 4.0
Employee
response to
change
155 74 57 Nil Nil 80 286 3.5
Weighted
Average
3.5
Source: Field Data (2017)
The findings revealed that factors affecting employee competency on competitive benchmarking
indicated an aggregate mean of 3.5. Respondents rated employee skills had an effect on
competitive benchmarking with a lowest mean of 3.3, Employee communication was rated at a
mean of 3.5. Staff skills were rated at highest mean of 4.0, and employee response to change
was rated at 3.5. This shows that staff ethics had significant effects on employee competency.
4.2.5: Effect of organizational structure factors on competitive benchmarking
process.
The researcher sought to establish the Effect of organizational structure factors on
competitive benchmarking process and the results are as presented below;-
SA – Strongly agree, A – Agree, UN-undecided, D-Disagree, SD- Strongly Disagree
16
Table 4.4: Effect of organizational structure factors on competitive benchmarking
process
Factors SA A N DA SD ∑𝒇𝒊
∑𝒇𝒊𝑊𝑖
∑𝒇𝒊𝑊𝑖
∑𝒇𝒊
Chain of
command
Nil 35 176 29 Nil 80 240 3.00
Communication
channel
70 116 66 14 Nil 80 266 3.30
Resource
allocation
mechanism
Nil 60 56 66 31 80 213 2.66
Human
resource
deployment
mechanism
155 76 76 Nil Nil 80 307 3.80
Weighted
Average
3.19
Source: Field Data (2017)
The researcher found out that organizational structure had an effect on competitive
benchmarking with an aggregate mean of 3.19. Respondents’ rated chain of command at a
mean of 3.00. Communication channel was rated at mean of 3.30, resource allocation
mechanism was rated at lowest mean of 2.66, and human resource deployment mechanism
was rated at highest mean of 3.80. This implies that human resource deployment highly
influenced benchmarking process.
4.2.6: Effect of top management support factors on competitive benchmarking
process.
The researcher sought to establish the Effect of top management factors on competitive
benchmarking process and the results are as presented below;-
SA – Strongly agree, A – Agree, UN-undecided, D-Disagree, SD- Strongly Disagree
17
Table 4.5: Effect of top management support factors on competitive benchmarking
process.
Factors SA A N DA SD ∑𝒇𝒊
∑𝒇𝒊𝑊𝑖
∑𝒇𝒊𝑊𝑖
∑𝒇𝒊
Organization
prioritization
50 92 66 28 10 80 246 3.0
Reliability of
the
organization
resources
110 76 87 20 Nil 80 293 3.6
Allocation of
funds
85 48 123 14 3 80 273 3.4
Weighted
Average
3.3
Source: Field Data (2017)
The researcher found out that the respondents rated effect of top management support on
competitive benchmarking process with an aggregate mean of 3.3, Respondents indicated
organization prioritization with a lowest mean of 3.0, respondents rated allocation of funds
at a mean of 3.4 and reliability of the study was rated at a highest mean of 3.6. This implies
that reliability of organization resources was highly determined by top management support
and its failure led to several effects on organization operations.
18
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1: Summary of the Findings
On the first objective; the study sought to find out the extent to which employee competency
affect competitive benchmarking. The findings revealed that factors affecting employee
competency on competitive benchmarking indicated an aggregate mean of 3.5. Respondents
rated employee skills had an effect on competitive benchmarking with a lowest mean of 3.3,
Employee communication was rated at a mean of 3.5. Staff skills were rated at highest mean of
4.0, and employee response to change was rated at 3.5. This shows that staff ethics had
significant effects on employee competency.
On the second objective; the study sought to find out the extent to which organizational
structure affect competitive benchmarking. The researcher found out that organizational
structure had an effect on competitive benchmarking with an aggregate mean of 3.19.
Respondents’ rated chain of command at a mean of 3.00. Communication channel was rated
at mean of 3.30, resource allocation mechanism was rated at lowest mean of 2.66, and
human resource deployment mechanism was rated at highest mean of 3.80. This implies that
human resource deployment highly influenced benchmarking process.
On the third objective, the study sought to find out the extent to which employee
competency affect competitive benchmarking. The researcher found out that the respondents
rated effect of top management support on competitive benchmarking process with an
aggregate mean of 3.3, Respondents indicated organization prioritization with a lowest mean
of 3.0, respondents rated allocation of funds at a mean of 3.4 and reliability of the study was
rated at a highest mean of 3.6. This implies that reliability of organization resources was
highly determined by top management support and its failure led to several effects on
organization operations.
5.2: Conclusion
Competitive benchmarking is essential for the current ever changing needs of customers as
well as improvement in technology. The central focus of competitive benchmarking should
be to contribute to the success of the service delivery and profitability. Having the required
relevant skills, funds and resources in various functions system to provide accurate and
timely information for human source planning is crucial.
19
Organizations face enormous challenges in their daily operations hence calling for
benchmarking. Given the complexity of the services the organization provides, the top
management should provide managerial support to employees to improve employee
motivation, job satisfaction and retention. The chain of command as well has posed several
challenges since the juniors need only to communicate to the top management through their
supervisors. In this case some information is not conveyed at the right time or it’s distorted.
Lack of enough funds has been another factor leading to competitive benchmarking hence
forcing more organizations to go for merger and acquisitions to compete in the industry.
5.3: Recommendations
The following recommendations pertinent to policy making and future research are made
making practice and future research are made;
5.3.1 Recommendations on policy and practice
The researcher recommends that, management of those organizations that have competitive
benchmarking on procurement performance must start employing it by constantly organizing
training and development programs for employees of the organization on how to improve
their skills before its implementation to improve organizational performance. Local
companies have been exposed to financial challenges whereby they lack expertise,
inadequate funds and as well their organizational structure do not follow their objective and
goals. Therefore its high time local companies benchmark from multinational companies to
avoid their services and goods being obsolete due to stiff competition.
5.3.2: Suggestions for further Study
Further research is necessary as the findings were based on a relatively small sample that
may have influenced the nature of results that were obtained. There is need to expand on
the sample size and carry out similar research in other organizations working in other parts
of County. The analysis that was used is always not sufficient to draw conclusions on a
phenomenon, and to provide adequate information that can be used for policy development.
20
REFERENCES
Ahmed, P.K. and M. Rafiq (2008). Integrated benchmarking: A holistic examination
of select techniques for benchmarking analysis, Benchmarking for Quality
Management and Technology.
Bakker, F. de and A. Nijhof.(2008), Responsible chain management: a capability
assessment framework, Business Strategy and the Environment.
Barrett, H.R., Ilbery, B.W., Browne, A.W., and T. Binns. ( 2009), Globalization and
the changing networks of food supply: the importation of fresh horticultural produce
from Kenya into the UK, Transactions of the Institute of British Geographers.
Boks, C. and A. Stevels.(2008), Theory and practice of environmental.
benchmarking in a major consumer electronics company, Benchmarking: An
International Journal.
Camp, R.C (1995). Business Process Benchmarking, ASCQ Quality Press,
Milwaukee, Wisconsin USA.
Carlsson-Kanayama, A., Ekstrom, M. P., and H. Shanahan.(2003), Food and life cycle
energy inputs: Consequences of diet and ways to increase efficiency, Ecological
Economics.
Carter, C.R. and D.S. Rogers, ( 2008), A framework of sustainable supply chain
management: moving towards new theory, International Journal of Physical
Distribution & Logistics Management.
Collins, A. and R. Fairchild, ( 2007), Sustainable food consumption at a sub-national
level: an ecological footprint, nutritional and economic analysis, Journal of
Environmental Policy and Planning.
Akyuz, G.A. and Erkan, T.E. [2009], Supply chain performance measurement: a
literature review, International Journal of Production Research, First published on:
25 August 2009.
21
Bendoly, E., Rosenzweig, E.D., and Stratman, J.K. [2007], Performance Metric
Portfolios: A Framework and Empirical Analysis, Production and Operations
Management,
Chae, B.K. [2009], Developing key performance indicators for supply chain: an
Industry perspective, Supply Chain Management: An International Journal
Fawcett, S.E., Magnan, G.M., and McCarter, M.W. [2008], 'Benefits, barriers, and
bridges to effective supply chain management', Supply Chain Management,
22
APPENDIX I : QUSTIONNARE
Questionnaire for employees at Naivas Supermarket – Kisii Branch.
Section A: Background information of the respondent
1. Gender of the respondent
i). Male ( )
ii). Female ( )
2. Age of respondent in years
i. 20-30 ( )
ii. 31- 40 ( )
iii. 41- 50 ( )
iv. 51 years and above ( )
3. Marital Status of the respondent
i). Single ( )
ii). Married ( )
iii) Divorced /separated ( )
iv). Widows ( )
4. Education Level of the respondent.
i). Primary ( )
ii) Secondary ( )
iii).Tertiary ( )
iv)University ( )
5. Have you been involved in supplier payment?
i. Yes ( )
ii. No ( )
6. If you have how long have you with procurement department?
(i) Below two years ( )
(ii) Between 2 to 4 years ( )
(iii) Between 4 to 8 years ( )
(iv) Above 8 years ( )
23
Section B: Employee Competency.
7. Do you agree with the following factors of employee competency affect competitive
benchmarking process?
SA – Strongly agree, A – Agree, UN-undecided, D-Disagree, SD- Strongly Disagree
Employee Competency
SA A UN D SD
Employee Skills
Employee communication
Staff ethics
Employee response to change
Section c: organizational structure
8. Do agree with the following organizational structure factors affect competitive
benchmarking process payment?
SA – Strongly agree, A – Agree, UN-undecided, D-Disagree, SD- Strongly Disagree
Organizational structure
factors
SA A UD D SD
Chain of command
Communication channel
Resource allocation mechanism
Human resource deployment
mechanism
24
Section D: Top management support
9. Do you agree with the following top management support factors affect competitive
benchmarking process?
SA – Strongly agree, A – Agree, UN-undecided, D-Disagree, SD- Strongly Disagree
Top management support
SA A UD S SD
Organization prioritization
Reliability of the organization
resources
Allocation of funds
Thank You