Assessing the impact of procurement practice on organizational performance

Figures & data

Table 1. Demographic characteristics of participants.

Demographic characteristics	Category	Sample (n = 31)
		Frequency	Percent
University	Haramaya	14	45.2
	Dire Dawa	9	29.0
	Oda Bultum	8	25.8
Gender	Male	19	61.3
	Female	12	38.7
Age	18–25	5	16.1
	26–35	15	48.4
	36–45	8	25.8
	46–55	3	9.7
Education level	Certificate	1	3.2
	Diploma	4	12.9
	Undergraduate	20	64.5
	Postgraduate	6	19.4
Current position	Technical expert	5	16.1
	Team leader	8	25.8
	Procurement planning expert	3	9.7
	Purchaser	6	19.4
	Procurement Director	3	9.7
	Store director	3	9.7
	Secretary	3	9.7
Year of experience in the current institution	<1 year	2	6.5
	1–2 years	5	16.1
	3–4 years	11	35.5
	5–6 years	4	12.9
	Above 6 years	9	29.0

Table 2. Path coefficients.

Hypotheses	Original sample (O)	Sample mean (M)	Standard deviation (STDEV)	T statistics (|O/STDEV|)	p-Values
IM -> OP	−0.123	−0.059	0.196	0.627	0.531
PC -> OP	0.052	0.046	0.19	0.274	0.784
PM -> OP	0.013	0.017	0.158	0.083	0.934
PP -> OP	0.559	0.547	0.174	3.222	0.001
SC -> OP	0.513	0.483	0.179	2.858	0.004

Figure 1. Structural equation model.

Table A1. Loadings, reliability, validity, and AVE.

Variables	Loading	Cronbach’s alpha	Composite reliability	AVE
Staff competency (SC)		0.900	0.925	0.712
The organization has documented policies that guide training in procurement practices	0.840
The department has frequent procurement training programs in place to enhance employees’ Skills	0.913
Training in procurement practices has improved the performance of procurement staff in your University	0.798
Inadequate training in procurement practices leads to poor performance of the organization	0.858
Procurement staff clearly understand procurement procedures	0.805
Procurement controlling (PC)		0.871	0.921	0.795
The university periodically reviews the existing procurement policies	0.900
The technical abilities of the suppliers are evaluated before contract awarding	0.905
Received goods and services are checked against the local purchase order	0.869
Inventory management (IM)		0.785	0.858	0.606
The department has put in place systems and processes that identify inventory requirements	0.850
The department always set inventory targets	0.826
The department observes replenishment techniques	0.602
The department handles all functions related to the tracking and management of material	0.810
Procurement monitoring (PM)		0.899	0.922	0.666
Reviews of the procurement system are done at regular intervals	0.871
The organization examines the procurement cycle to prevent fraud	0.628
Supplier evaluation is periodically undertaken to ensure the quality of the goods and services	0.849
Corrective actions are taken once a discrepancy is identified in the procurement processes	0.773
Obstacles in the procurement process are mitigated promptly	0.880
Close supervision of purchases is done as a way of controlling costs	0.866
Procurement planning (PP)		0.935	0.947	0.690
Top management is involved in the procurement planning	0.845
Needs assessment is undertaken by respective Heads of the department for goods and services required	0.891
Budget approval is obtained for the required items before purchase orders are placed	0.836
Market capability analysis is carried out to determine where to procure from	0.896
Procurement planning sets in motion the entire procurement process in the university	0.795
The procurement needs are clearly defined by the heads of the department	0.861
Delivery schedules that fit the organization’s requirements are drawn with the suppliers	0.765
Funds are availed based on the budget	0.742
Organizational performance (OP)		0.820	0.875	0.586
Procurement practices adopted by the university have impacted positively on the university’s performance	0.823
Procurement practices adopted by the university have contributed to users’ department satisfaction	0.686
Procurement practices adopted in the university have resulted in procurement cost reduction	0.693
Procurement practices adopted by the University have resulted in quality goods/services	0.708
A procurement practice adopted by the University has resulted in timely delivery of goods and services	0.894

Table A2. Fornell-Larcker criterion.

	IM	OP	PC	PM	PP	SC
IM	0.778
OP	0.555	0.765
PC	0.586	0.692	0.892
PM	0.603	0.465	0.574	0.816
PP	0.523	0.731	0.668	0.459	0.830
SC	0.663	0.685	0.651	0.457	0.380	0.844

Note: Values in bold and italic represent the square root of AVE.

Table A3. Heterotrait-monotriat ratio.

	IM	OP	PC	PM	PP	SC
IM
OP	0.658
PC	0.684	0.810
PM	0.672	0.502	0.624
PP	0.582	0.807	0.721	0.477
SC	0.770	0.778	0.732	0.476	0.391