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

http://erepository.uonbi.ac.ke/handle/11295/75226

http://erepository.uonbi.ac.ke/handle/11295/75226

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


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%


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%


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;-


16

Table 4.4: Effect of organizational structure factors on competitive benchmarking

process


∑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


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;-


17

Table 4.5: Effect of top management support factors on competitive benchmarking

process.


∑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


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

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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?


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?


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?


Top management support

SA A UD S SD

Organization prioritization

Reliability of the organization

resources

Allocation of funds

Thank You

assessment of factors affecting competitive benchmarking …

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