CHAPTER ONE

INTRODUCTION OF THE STUDY

1.1 Introduction
This chapter entails the background of the study, statement of the problem, objective of
the study, research questions, and significance of the study, limitation of the study and
the scope of the study. This will guide the researcher in conducting the study accordance
with the laid procedures.

1.2 Background of the Study

Supply chain management and supplier selection have become the fastest growing areas
of management especially in the last few years. Although study in the area started in
1960s, it is in the 90s that scholars gained much interest in the area of supplier
selection. The reason is that with heightened global competition that has reduced the
profit margins of most companies, hence cost cutting has become the option and is being
focused in logistics which has become the single largest and most important activity of
most firms, both in the for profit and not-for-profit sectors. As such, quite a significant
portion of organizations‟ budgets is spent in these activities. Supplier selection
inparticular is crucial in management of a supply chain. The decision is one of the most
fundamental and important decisions made by buyers and organizations. This is because
supplier selection and management can be applied to a variety of suppliers throughout a
products‟ life cycle from initial raw materials acquisition to end-of-life service providers
(Bai and Sarkis, 2009).

Before a vendor is selected by private agencies prior performance is one of the key issues
considered. Another criterion used is also in accordance with the organizational financial
rules and regulations, particularly FR No.110.21, “Contracts shall be awarded to the
lowest acceptable bidder…”Other criteria include “compliance with specifications,
technical acceptability, compliance with delivery schedules, and local servicing and
availability of spare parts.” Quality and reliability are also supplier selection determinant
for most private organizations.

Globally, supplier selection are intricate due to the fact that multiple criteria must be
considered in the decision making process. Multi-criteria approach is used inselecting

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suppliers, however (Weber & Current, 1991). Although there are numerous criteria used
in selecting suppliers depending on organizations, literature suggests that the most
important are price, delivery, and quality. Locally, the procurement procedures pretty
much follow the international standards to a large extent. This means that even supplier
selection determinants are more or less similar to those considered by purchasers
everywhere else (Wernham, 1985).

Internationally, purchasing is a major exercise. In USA, the total dollar magnitude of all
purchases by businesses exceeded the gross national product in 1995. Purchasing
transactions take 55% of the organization’s revenue. Supplier selection becomes
important thus because it involves large cash flows (Cheraghi,
Dadashzadeh&Subramanian, n.d). The United Nations, including its many affiliated
agencies, represents vast global market for suppliers of virtually all types of goods and
services. In line with General Assembly resolutions and decisions by other UN Agency
Executive Boards, allorganizations of the UN system are making great efforts to
identify new sources of supply, particularly from developing and under-utilized donor
countries, in order to create an expanded and more equitable geographical
distribution of procurement.

Doing business with the International agencies is one way of ensuring market for
smalland medium sized business enterprises hence job creation and fulfilling one
of theUN‟s broad objective of poverty alleviation. Despite these obvious benefits of
doing business with the UN, most Kenyan small and medium sized enterprises do not
fully benefit from the contracts because they do not know the requirements for
supplier selection. A July2008 study report commissioned by KISM titled,
„Procurement and Supply in Kenya: The market for Small and Medium Enterprises‟
notes that “donor and NGO procurement systems work well though they tend to be over-
bureaucratized which is itself a constraint to most SMEs with potential to supply their
procurement needs.”Therefore, determination of determinants in supplier selection by the
UN agencies is crucial. This study therefore focuses on the determinants of supplier
selection in procurement process in the international nongovernmental organizations,
with special focus on the UN agencies in Kenya. Although there are studies on supplier

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selection determinants in International non-Governmental Organizations, most of this
focuses on government agencies. There are hardly any studies focusing only on supplier
selection determinants in International non-Governmental Organizations and particularly,
the UN agencies in Kenya, hence the need for this study.

Ansoff (1965) noted that while implementing strategy is such an important activity, it is
not easy. A reason for this difficulty may be that strategy implementation is a
multifaceted and highly complex organizational phenomenon (DeLeon (1999) argues that
the complexity of implementation is more than daunting and apparently impenetrable and
results in lacking predictive powers. Supplier selection is difficult and complex because
the process is messy, ambiguous and often involves many departments in the firm
(Schofield, 2004).

Organizations are environment dependent and environment serving and the strategy that
the organization adopts is what connects it to the environment hence all organizations
operate in an open system. Open systems theory posits that organizations are affected by
a number of factors that occur in the external environment and that they can have an
effect on factors that exist in the internal environment (Burnes 1996).

The turbulent and competitive environment in the milling industry has prompted the
players in the milling industry including UN agencies to come up with effective strategies
in order to remain competitive and to survive in the dynamic market. Despite the
adoption of these strategies, UN agencies still performed dismally and this could
probably due to thedisconnect between strategy formulation and strategy implementation.
Lack of emphasis on the strategy implementation process at the company is what has
prompted the researcher to establish the strategy implementation challenges at UN
agencies.

Part of this complexity arises from the social and political aspects of supplier selection,
which need to be taken into account. Due to this, there is a lot of competition in the
market prompting the key players including UN agencies to adopt and implement
strategic management in their organization. Despite the adoption of these strategies, there

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is a gap in the company performance and this could probably be due to disconnect
between strategy formulation and strategy implementation.

1.2.1 The Profile of the UN and Her Agencies

The UN formally came into existence on 24thOctober, 1945 when 50 countries met in San
Francisco at the United Nations Conference on International Organization to draw up the
United Nations Charter. China, France, the Soviet Union, the USA, the United Kingdom
and a host of other nations ratified the charter. Tasked with maintenance of world peace
and security, developing friendly relations among nations and to be a center for
harmonizing different nations‟ action in attaining solutions to economic, social,
cultural and humanitarian problems; and in promoting respect for human rights and
fundamental freedoms, the larger UN family has 15 agencies and several
programmes and bodies (UN). The various UN agencies are located in disparate
countries of the world where their operations engender a lot of procurement for
both goods and services. This procurement is done mostly locally within the
countries the agencies might be located bringing substantial opportunities and
lifeline to local suppliers.

According to 2010 Annual Statistical Report on United Nations Procurement

(2011), the overall procurement volume of United Nations organizations during 2010
increased to US$ 14.5billion from$ 13.8 billion in 2009 representing a 5.4% increase. In
Kenya alone, like in other developing and countries in transition, the share of UN trade
value in Shillings rose to 7.4 billion($ 91.2 million). The range of procures include goods
and services such as audiovisual equipment, beverages, telecommunication equipment,
foods, stationery, construction materials, Chemicals, furniture, machinery, freight
services among many others(ibid).

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 Figure 1.1 Organizational Structures of World Food Programme

Managing Director

Human resource manager Finance manager Chemical Engineer Production manager

Stores officer Transportation officer Marketing manager

Source: World Food Programme (2015)

1.3 Statement of the Problem

Determinants of supplier or vendor selection by WFP have been quite mystery among
local suppliers. Few know the attributes the WFP look out for in suppliers and
consequently fail to bid for contracts from WFP, yet only speculate that the WFP
agencies consider foreign suppliers once the latter hog all supply contracts. All
through, the, supplier selection is perceived to be riddled with secrecy and favoritism.
Certainly; this not only complicates the realization of the WFP‟s stated objective of
seeing increased participation of local suppliers and vendors in doing business with the
WFP hence spurring growth in employment opportunities across the country, but also
raises concern over the social justice in the spending of commonwealth funds given the
massive amounts of money involved.

Doing business with the International agencies is one way of ensuring market for small
and medium sized business enterprises hence job creation and fulfilling one of the
WFP‟s broad objective of poverty alleviation. Despite these obvious benefits of doing
business with the UN, most Kenyan small and medium sized enterprises do not fully
benefit from the contracts because they do not know the requirements for supplier
selection. A July2008 study report commissioned by KISM titled, „Procurement
and Supply in Kenya: The market for Small and Medium Enterprises‟ notes that “donor

5
and Non-Government Organization supplier selection systems work well though they
tend to be over- bureaucratized which is itself a constraint to most SMEs with potential to
supply their procurement needs.”Therefore, determination of determinants in supplier
selection by the WFP is crucial. This study therefore focuses on the determinants of
supplier selection among the international non-governmental organizations, with special
focus on the WFP in Kenya. Although there are studies on supplier selection
determinants in International non-Governmental Organizations, most of this focuses on
government agencies. There are hardly any studies focusing only on supplier selection
determinants in International non-Governmental Organizations and particularly, the WFP
in Kenya, hence the need for this study.

1.4 Objective of the Study

1.4.1 General Objective
The general objective of this study is to investigate the factors affecting the supplier
selection among international non-governmental organizations with special reference to
World Food Programme in Kenya.

1.4.2 Specific Objectives

The specific objectives are:
i. To determine the effect of cost on supplier selection decisions in international
organizations in Kenya.
ii. To investigate the effects of quality on supplier selection decisions in
international organizations in Kenya.
iii. To establish the effect of competition on supplier selection decisions in
international organizations in Kenya.
iv. To investigate the effect of technology on the supplier selection decisions in
international organizations in Kenya.
v. To determine the effect of organization culture on the supplier selection decisions
in international organizations in Kenya.

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1.5 Research Questions
The research questions for the study shall be:
i. How does cost affect supplier selection decisions in international organizations in
Kenya?
ii. To what extent does quality of supplies affect supplier selection decisions in
international organizations in Kenya?
iii. What is the effect of quality on supplier selection decisions in international
organizations in Kenya?
iv. What is the effect of technology in the supplier selection decisions in
international organizations in Kenya?
v. How does organization culture affect supplier selection decisions in international
organizations in Kenya?

1.6 Significance of the Study

This study is significant in the sense that it will put into perspective the exact effects for
supplier selection by the international organizations in Kenya. The study will be of
significant the following.

1.6.1 The Management of World Food Programme

World Food Programme will greatly benefited from the study in that it will be able to
identify factors i.e. cost and its significance to the supplier selection among international
non-governmental organizations in Kenya, how can quality be of great impact to improve
the supplier selection among international non-governmental organizations , how can
competition improve the supplier selection among international non-governmental
organizations what if technology and organization culture contribute to the supplier
selection among international non-governmental organizations in Kenya.

1.6.2 The Suppliers

Especially in the small and medium size categories as it will shed light on what the
International organizations in Kenya consider in a supplier before awarding a contract.

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1.6.3 Other Researchers
The findings of this research study will assist the researchers to understand more about
difficulties in their work environment and subsequently how quality can be examined.
The study will also give the direction on what should be analyzed more by other
researchers hence source of reference. The research findings will stimulate academicians
who would like to pursue the further study. It can be basis of framing research question to
elaborate the understanding of supplier selection activities.

1.7 Limitation of the Study

1.7.1 Confidentiality
Some of the respondents, especially the junior staff were reluctant to participate in the
study for fear of being reprimanded by their superiors without knowing that it was
permitted by management for education purposes only and hence they thought it could
cost for their work. Researcher showed the letter of introduction from Kenya institute of
management to enable them to be free to give information.

1.7.2 Lack of Cooperation

The attitude of the workers made the research reliability and validity to benefits to the
industry. Researcher ensured that they understand am a student who is doing project
management research to enable them cooperates and gives the information as required.

1.8 Scope of the Study

The study confined itself only to the World Food Programme in Kenya. The focus of the
study will be on establishing the effects of supplier selection among the International
Organizations in Kenya. The researcher shall take World Food Pragramme in Nairobi’s
South C, as the main focus.

1.8.1 Geographical scope

To carry out a study on factors affecting supplier selection among the International
Organizations in Kenya, a case study of World Food Pragramme in Kenya. The target
population was 347 employees of World Food Programme (WFP) in Kenya and it took
the researcher exactly three months to complete the researcher.

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 CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter covers the following: theoretical review, empirical review and conceptual
framework. Literature review is the process of identifying, evaluating, and synthesizing
and presenting relevant information from other resources like publication journals and
magazines (Mugenda and Mugenda, 2003). The purpose of this literatures critical review
was to examine previous studies regarding contracting in the construction sector and
identifying the gaps that needed to be fulfilled. This chapter comprised the critical review
of past studies, summary and conceptual frame work.

2.2 Theoretical Review

Consumers buy products based on a combination of cost, quality, availability,
maintainability, and reputation factors. The companies along with their supply chains,
which can provide these desired things, will ultimately be successful (Wisner,
2008). But when confronted with risky purchase decisions, most firms consider first and
foremost, sellers or suppliers with proven track record with the firm are favored as
familiar suppliers help reduce perceived risks (Hutt and Speh, 2009).

Quantitative approaches used in supplier selection range from simple linear weighting
models to complex mathematical programming models. Linear weighting models are
essentially scoring models which place a weight on subjectively a determined criterion
and provide a total score for each supplier. Mathematical programming models use linear
programming, mixed-integer programming and goal programming to determine supplier
selection (Chaundry, 2007).

2.2.1 Costs
Cost is an amount that has to be paid or given up to in order to get something. Samson
(2007) price is very important, not only for financial reasons but also for marketing. A
fair price will give a reasonable profit and motivates a customer to buy the commodity
compared to other firms price should be observed as closely as possible to match
the value of the product being distributed and also with the cost a foregone during the
construction process. Today’s organizations use an expanded concept of value. As result,

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managers need to constantly look for opportunity to reduce cost and improve efficiency.
He points out; managers need to make sure that they are supplied with raw materials and
services at lowest possible total cost of ownership. For example, in performance based
supplier partnership strategy, strategic products and leverage products make up to 80 per
cent of total turnover. Minor changes in price levels will immediate impact on the end
product’s cost price.

According to Courtier, (2001) cost represent money measurements of efforts that a firm
has to take to achieve its objectives. These are generally referred to as input costs. Input
cost influences the efficiency of production in construction decisions. These costs are
divided into fixed cost incurred by the business even when the plan is idle, total
fixed costs including salary and rent, variable costs, costs which change with change in
input and operations for example wages and electricity. Marginal costs which are
incurred when a firm produces an extra unit of production and total costs which is the
sum of the fixed and variable costs. A competitive product must address factors such as
cost, performance, aesthetics, schedule or time-to-market, and quality. The importance of
these factors will vary from product to product and market to market. Over time,
customers or users of a product will demand more and more, e.g., more performance at
less cost. First, as the technology or aesthetics of a product matures or stabilizes
and the competitive playing field levels, competition are increasingly based on cost or
price.

Second, a customer's internal economics or manufacturing resource limitations may shift

the acquisition decision toward affordability as a more dominant factor. In either case, a
successful product supplier must focus more attention on managing product cost. The
management of product cost begins with the conception of a new product. Typically sixty
to seventy percent of a product's cost or life cycle costs are committed based on decisions
made during concept or architecture development. Eighty-five to ninety percent of a
product's cost or life cycle cost is committed by the time that the product has been
designed and its manufacturing process has been developed (Billing et al, 1986).

Satish, and Inman (2004), cost will be a more important factor in the acquisition
of a product in two situations. Potential actions related to manufacturing initiatives,

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automation, overhead reductions, and general and administrative expenses may only
affect the remaining ten to fifteen percent of the product's cost. Therefore, once a product
goes into production, relatively little latitude exists to reduce the cost of a product
without going back and making changes to the design of the product and its
manufacturing process. Thus the strategy of rushing to put a product into production and
then going back and trying to cost reduce it later, delays profitability and incurs
additional non-recurring development costs. Opportunity cost is the measurable
advantage forgone as result of rejection of alternative uses of resources, whether of
materials or facilities. This cost doesn’t involve any cash outlay and is computed only for
the purpose of comparison in the context of managerial decision and hence doesn’t find
any place in financial account. Imputed cost is a hypothetical cost and does not involve
actual cash outlay and as a consequence does not appear in financial records. Relevant
costs appropriate to aid the making of specific management decision. They are expected
future costs that will differ under alteration. Future variable costs generally become
relevant decision context. Service or operation cost is therefore the cost of providing and
operating a service or function costing is usually applied to transport services like
distribution service.

2.2.2 Technology
Lewis (2007) carried out a research in Kenya and found out that many organizations in
Kenya have implemented numerous information technology systems and services,
including expansion of computer networks implementation of management and
enterpriser source planning system, in house implementation of disaster recovery system
among others this is due to increasing urge for greater profit margins and
improved performance. This has greatly put an impact on the procurement function in the
construction industry Organizations have been forced to embrace the strategic
implementation of IT and E- procurement.

According to lysons (2006), E-procurement issuing the internet to operate the

transactions aspect of the requisitioning, Authorizing, ordering, receiving and
payment process for the required services or products. He has identified several types
of E procurement trading model for instance the electric data interchange (EDI). It is

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defined as a technical base on agreed standards which facilitates products
transaction in standardization electronic form in an authorized manner directly from
a computer application in the organization to an application.

Robins (1996) defined technology a show an organization transforms its inputs such as
materials and information into output (product and services) and is considered as one of
the internal contingency variable that also influenced the structure of an organization.
The earlier studies indicated that distinct relationship existed between the three basic
forms of technology (unit products and butch technology mass or large batch, and process
production or continuous process technology) and the subsequence structure of
construction firms. Technology is the making use and knowledge of tools, machines
technique or methods of organizing in order to solve a problem or performance of a
specific function. He refers to technology as all ways people use their invention and
discovers to satisfy their needs and desires.

Ndung‟u (2002) noted the, management information system (MIS) though computerized
can considerably improve the distribution and operation activities, enabling expansion to
take place more rapidly and with expansion more employment opportunities will also
becreated. Companies should not just focus on how who will deliver goods and services
on time. Weber et al (1993) considered supplier selection to be long term process
and suggests that suppliers should be evaluated based on core competences and
strategic needs. Companies should not just focus on how it might be used but
information system is needed to support, direct the business and why we have to
go about managing information resources the way we do.

According to William 1997 the productivity of individual and group works through the
use of information technology. Dimensions of productivity include efficiency,
effectiveness and quality. Productivity may be difficult to measure. According to
Ellswort (1996) many companies use internet to search for best practices online,
marketing help them to become more competitive and improve their activities.
Companies gain competitive advantage by having access to the state of the art
information on service product and ideas. With online marketing one is less aware of
national boundaries and distribution.

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Sexennial (2002) defines technology as a new how or some knowledge experience and
skills necessary to establish enterprise that will market product economically. When
computer and communication technology are combined, the result is information
technology. Information technology is a general term that describes any technology that
helps to produce, store, manipulate or to disseminate information. Presumably,
information technology as a whole is noted that is the use of computers and information
is associated; the term information technology has ballooned to encompass many aspects
of computing and technology and the term has become very recognizable. The
information technology umbrella can be quite large covering many fields. Information
technology professionals perform a variety of duties that range from installing
applications to designing complex computer networks and information data bases.

A few of the duties that IT professionals perform may include; data management,
engineering computer hardware, networking, database and software design as well as the
management and administration of entire systems. Computer and communication
technology are combined the result is information technology. Information technology is
a general term that describes any technology that helps to produce, manipulate,
communicate, store and disseminate information. Presumably, information technology
isnoted that the use of computers and information are associated (Capman, 2001).

According to Brian (2006), information technology is more of information systems

whereby is any form of organized combination of people, software, hardware,
communication networks and data resources that collects, transforms and disseminates
information in an organization. Much current interest in outsourcing is motivated by the
capabilities of it in linking and coordinating the different members of the supply chain
and the opportunity that it provides to increase the transition speed while reducing cost by
eliminating labor and paper transactions. It provides the following functions; centralized
coordination of information data, integration of transport, distribution. Ordering and
production: direct access to both domestic and global transportation and distribution
channels, locating and tracking the movement of every item in the supply chain.
Consolidation of purchasing from all suppliers, intercompany information access, data

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interchange, data acquisition at the point of origin and point of sale, instantaneous
updating of inventory levels in real time.

According to Jessop (2005) says that people revealed on information system to

communicate with each other using a variety of physical devices(hardware) information
system instructions and procedures (software) communication channels(network) and
stored date (data resources) since the drawn of civilization. He insisted that the use of
modern information technology was vital in ensuring quality service. The introduction of
computers as insisted saved many organizations in terms of stationery, space for filling
and cost on employees. He insisted that if many employees were computer literate and
were using manual ways of serving customers, long queues over the counter would be
experienced. The use of computers ensures quality system in terms of efficiency
and effectiveness. It also ensures that data is kept in main server and where needed.
Quality management ensured keeping productive employees and this could be achieved
through information.

James (2006) carried out a research on how information technology had

transformed business enterprises and found out that it has brought enormous offer on
every aspect of business. He argues that information department had transformed from a
back office support function to an integral planning mechanism for designing what must
be e-supply and e- business model that will ensure future viability for the firm and its
position in value chain. He added that in today’s environment new e-business with
software super virtually overnight and begins attracting traditional companies that have
been late in developing a cyber-channel of customer response. He said that information
technology has facilitated sharing of information, collaboration of industries in different
departments that has made communication sector to be able to control its inventory. Use
of technology has led to new business models with greater responses to customer
demands. This has led to business commerce created by emergence of internet.

2.2.3 Competition
Borkewitz (1997) says that competition refers to the alternative firms that could provide a
product to satisfy a specific market need. Each company must consider presenting the
potential consumer in designing its market strategy. The number of competitors grows

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daily as the competing firms in the construction industry, try as many customers, the
firms tend to get more marketable as they modernize and get the organization on line to
get the business running. Competition is all about two rival parties involved in a similar
job trying to outdo to one another in the market.

According to Kotler (2006) competition includes the entire actual and potential rival
offering and substitutes that buyer might consider. He distinguished four levels of
competition where on the degree of production substitutability. These levels include;
brand competition where a company sees its competitors as other company offering
similar products and services to the same customers at similar prices, industry
competition where a company sees its competitors as all companies making same product
or class of product, from competition where a company sees its competitors supply the
same products.

Richard et al (2005) m that every company has a policy regarding the level at
which its products are priced relatively to competition is price based a company
sells its products at the price as its competitors. Companies competing on a non-price
basis meet the competitor’s price s hopping to minimize the use of price as a competitive
weapon. They also stated that it does not mean meeting every competitor’s prices only
the price of importer competitors, “important” in course that what such competitors
do in their pricing may chase customers away.

Porter (2008) stated that, the job of a strategy is to understand and cope with competition.
Often, however managers define completion normally as it occurred only among today’s
direct competitors. Yet competitors for profits go beyond established industry rivals to
include four competitive forces as well: customer’s suppliers, potential entrants and
substitute products. As different from one another as industries might appear on the
surface, the underlying drivers of profitability are the same. Porter mentioned that
industry drivers structure and completion and profitability not whether an industry is
emerging on nature high tech or low tech regulation or UN regulation.

Porter (2008) added that the treats of entry in an industry depends on the high of the entry
barriers that are present and not the reaction entrants can expect from companies already

15
present in the industry. If the entry barrier are low and new comers expect little retaliation
from entrenched competitors that treats of new entry actually occurs, that holds
down profitability. He defines barriers of entry as the advantages that incompetents have
relative to new entrants. These entry barriers include supply side economies of scale,
capital requirements, unequal access of distribution channels‟ and restrictive government
Policy.

As stated by Porter (2008) newcomers are likely to fear expected retaliation of

incompetents have previously responded vigorously to new entrants, incompetents
possess substantial resources to fight back, including excess cash and un used borrowing
power, available productive capacity, or don’t with distribution channels and customers;
Incompetents seem likely to out prices because they are committed retaining
market share at all costs or because the industry has high fixed cost which create a
strong motivation to drop prices to fill excess capacity and finally if industry growth is
slow.

According to Kotler (1995) he states that you have to understand your customer needs
and satisfy them and more important to understand your competitors. Economic theory
indicates that under conditions of pure competition the action of buyers and sellers allow
a fair return on investment. He says that there are several forces that influence
competition in an industry some of these are, threats of new entrance, threats of
substitute, products and bargaining power of the suppliers and competition between
current members of the industry.

According to Stone (2004), competitors provide services/products indirect competition or

services products which compete indirectly; it substitutes competitive strategy of the
organization which is a basic approach to markets and services/ product with respect to
competitors. Most organizations devote much discussion to senior management level to
their strategic competencies and ways which they aim to complete several
strategies are possible like the technology, cost leadership, customer focus and
initiative. In a competitive situation each competitor reacts different from the other
whereby some are quick or slow to react to the customers' loyalty. Some competitors only

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react on certain types of investment and some competitors react swiftly and strongly to
any action taken.

According to Kotler (1997) a competitive advantage is the company's ability to

performing one or more ways those competitors cannot match. It is sharing the market
mix that market tutors mix. According to Martin and Julian (1988), marketing is a
competitive business that is active and its purpose is to create difference. The competitive
aspect of the company’s marketing effort must be scrutinized in the cause of the market
audit. Each competitor has a certain philosophy of doing business, a certain internal
culture and a certain guiding belief one needs to understand a competitors mind set to
have hope of anticipating how it might act or react. A company should effectively design
its competitor’s intelligence system to be cost effective. Everyone in the company must
not only sense, save and satisfy the customer but also be given a chance to spot
competitive information and pass it to the relevant authority in the organization.

Kotler (1998) says that a company’s closest competitors are those seeking to satisfy the
same customer needs within similar offers. A company must pay attention to its latest
competitor who may offer new or other offers that satisfy the same needs. He further says
that a company needs to know how to design an effective intelligence system on how to
balance a competitor’s orientation with a customer’s orientation. A company must
analyze the level of the competition position of its competitors and the number of the
competitors in order projects its current position and offensive actions. The new entrants
in the industry bring new capacity and desire to gain market share and increase
profit margins by this I must confess that the new entrants face some difficulties when
entering the market because of stiff competition from the suppliers. Competition must
confess has become very important in our society today, because it injects new
professional blood into the industry that is committed to bringing quality products that
are very resourceful to the people.

2.2.4 Quality
Quality is a totality of features and characteristic of product and services need to perform
stated and implied needs. Quality has played an important role in the organization due to

17
the proper recruitment of suppliers as they usually supply products of the required
standard.

Dobler (2004), Taguchi notes that as the level of conformance moves out towards the
upper and lower limits, there is a quadratic increase in costs and referred this as quadratic
loss function. Hence goal post philosophy underestimates the cost of poor quality.
Taguchi advocates identifying target values for design parameters. The approach focuses
on consistency in hitting the target values rather than being within a band of tolerance. In
many market today, quality is expected as a given requirement and is considered an
entry- level characteristic of the market place (Barrie et al). Competition is fierce in
today’s business environment and quality is recognized as a key consideration in many
purchasing decisions. It is no wonder that quality is an essential component of
market mix as companies seek ways to differentiate effectively their products and
services from those of their competitors. For instance, many major European companies
have during the last decades encouraged their suppliers to develop their quality
management system, use lean manufacturing techniques, adopt a continuous
improvement philosophy eliminate non value added activity, pursue cost down
activities, and concentrate on their core competencies and product line. The key ideas in
this principle are products. These break through are focused on improving or
eliminating chronic loses. The International Organization of standard released its
ISO 9001:2000 standards with practical version that justify the inclusion into his
section that ISO calls for a Quality management system. The principle are intended to
be used as a framework guide organizations towards improving their performance.
According to ISO, the principles are derived from collective experience and knowledge
of international experts. ISO is the series of voluntary quality standards developed under
international standards and has a network of national standards of more than ISO.

Daltas (2008) defines standardization as the process of formulating and applying

rules for the orderly approach to the specific activity for the benefit and with the
cooperation of the concerned and in particular for the promotion of the overall
economy. Standardization has enhanced increased efficiency in purchasing and
subcontracting operations and has enhanced multiple vendors, high volume items which

18
will be up for the required standards. There are improved deliveries schedules in which
items required will be delivered at the right time, right place and also the right standard
for raw materials and is important when it is adopted. It saves the designed time and time
of production of the item would be reduced and hence customer satisfaction is met when
the materials are of the right standard, there is no wastage and hence no losses are
encountered. There is also the elimination of the need to purchase a costly brand of item
because the buyers are adhered to the standards only from any suppliers.

On Supplies Quality Assurance (SQA) it is an important role in the

implementation of TQM reserved in the purchasing department. This is because the
quality of the finished product is determined to a larger extending by the quality of the
raw materials and components. Working on improving the quality offered by the
suppliers is therefore the main task for buyers. To improve the quality of the products,
many companies opt for approach based prevention. Cooperation is required from every
department with regard to purchasing, the objective of prevention is to maintain or
improve the quality of goods and services to be purchased. This is based on selecting the
supplier who can guarantee a sufficient level of quality. It is important that the supplier
also guarantees this quality level for the future. TQM demands that our focus be on the
processes that create output rather than the output itself. Since processes create output, a
logical focus is on the process of creation itself rather than result. An emphasis on
process rather than product demands that suppliers provide evidence of process capacity
on regular basis.

Furthermore, each time a supplier modifies a process, a new capability study is required.
Focusing on a process means minimizing a reliance of sample conformance. A well-
defined selection process supports the development of the best practices, reduces
duplication across teams or units and recognizes the critical units between quality of the
selection decision and supply chain quality (Monzka, 2005).

2.2.5. Organization Culture

Organization culture has been defined by Cooke (2000) as a pattern of basic assumptions
that has worked well enough to be considered valid and therefore to be taught to new
members as the correct way to perceive, think and feel. He says that basic assumption

19
guides decision makers in dealing with the problems of external adoption, and integrating
the behaviors of the organization members. He notes that organizational culture include
among other things the mission and vision of the corporate, the values beliefs and
behavioral norms and expectations shared by the organizational members who directly
influence the organization appraisal system and satisfaction and sores levels. Culture
acting through institutionalized belief systems and groups norms can be a very effective
means of directing the behavior of the organizational members towards innovative
activities even through motivation is highly uncertain process.

The culture of an organization has an enormous impact on the way which an organization
delivers services to its stake holders. An initiative as implemented in order to meet a need
which is then communicated to the organization and the message is filtered by the culture
which then implements it and affect how it is delivered to customers. The implementation
ultimately determines the success or failure of an organization. Long lived companies
with financial performance which established them an industry leader often shared a
number of common qualities such as core values which dictate the behavior and appraisal
of employee which focus on self-improvement and learning from failure (Mazhan, 2003).

Knapp (1999), further explain the dynamics of organizational culture which eventually
tend to cohesiveness and internationalizations of knowledge management incentives. He
proposes the nature of hierarchies of the organizational culture as major obstacles to
promote the ease of appraisal and interpersonal relationships which are critical for
knowledge management implementation since organizational culture influence decision
making, management style employee relation and behavior pattern in the organization.
Any knowledge management initiative must be fit with the organizational culture.

In the context appraisal management, major cultural factors that have received
considerable attention are information system that’s seen as a prevalent factor since
technology driven solution were the first approaches to developing appraisal management
initiatives. Some researchers claimed effective appraisal system needs to focus on people
as one of its core values through them interventions strong and dedicated leadership that
work the talk is seen as a must have cultural factor. In addition, the leadership role is
critical to create the vision, mission objectives and ethics codes of appraisal management

20
is the culture that is characterized with cooperative involvement and trust. The soft
aspects of organizational culture are emphasized but not so much on the structure and
system of the organization. Often writers proposed appraisal system needs to be
supportive, sharing culture as the most desirable organizational culture in order to ensure
appraisal success. Appraisal based on their views. Appraisal, Culture is an environment
where employees are empowered and willing to disseminate information (Mc Dermott
and O’dell, 2001).

Organizational cultural has been identified as a major catalyst or a major hindrance to

appraisal creation and sharing. An appraisal that is friendly is one of the most important
conclusions leading to creation of appraisal management initiative in organization. The
development and in cooperation of appraisal management process throughout an
organization have traditionally rewarded employees based on individual performance.
Specifically, cultural barriers to appraisal management e.g. cultural norms that promote
and encourage employee appraisal (hoarding) must be replaced by an organizational
culture that promote attitude and behaviors, “than encourage allow and reward employee
to share their knowledge and insights it in employee must not perceive that his or her
value to the organization is worth more important (Guptara, 1999).

As evident from the discussion, organizational culture has been down played. Must
appraisal system management initiatives have been down played? Most appraisal
management culture literature new leadership as part of the cultural faction that needs to
be simultaneously addressed. De Long and Fahey (2000) made an argument for the
influence of organizational culture on behaviors, central to appraisal creation, sharing and
use. In his study he concluded that for example that must of organizational lack a culture
that supports collaborative work because people view personal ownership of knowledge
as a method to ensure job security as a result are reluctant to share information.

When discussing organizational culture, we are laterally referring to the dominant culture
that is the themes shared most widely by the organization members. However
organizations are also comprised of sub cultures located throughout their various
division; geographical region and occupational group. Some sub cultures enhance the
dominant culture by espousing parallel assumptions values and beliefs. Others are called

21
counter cultures because they directly oppose the organizations core value. Sub cultures
particularly counter cultures potentially create and discussion among employees but they
also serve the important functions they maintain the organization standards of
performance and ethical behavior. Employees who hold counter cultural values are an
important source of assurance and critique over the dominant order. Organization
eventually needs to replace their dominant values with one that are more appropriate for
changing environment (Meshane, 2007).

Organizational culture is a wider and deeper concept, something that an organization 'is'
rather than what it has. It comprises the attitudes, experiences, beliefs and values of an
organization. It has been defined as "the specific collection of values and norms that are
shared by people and groups in an organization and that control the way they
interact with each other and with stakeholders outside the organization.
Organizational values are beliefs and ideas about what kinds of goals members of an
organization should pursue and ideas about the appropriate kinds or standards of
behaviour organizational members should use to achieve these goals.

From organizational values develop organizational norms, guidelines or expectations

that prescribe appropriate kinds of behaviour by employees in particular situations and
control the behaviour of organizational members towards one another" (Black,2003).
Senior management may try to determine a corporate culture. They may wish to impose
corporate values and standards of behaviour that specifically reflect the objectives of the
organization. In addition, there will also be an extant internal culture within the
workforce. Work-groups within the organization have their own behavioral quirks and
interactions which, to an extent, affect the whole system.

2.3 Critical Review

Courtier, (2001) cost represent money measurements of efforts that a firm has to take to
achieve its objectives. These are generally referred to as input costs. Input cost influences
the efficiency of production in construction decisions. These costs are divided into fixed
cost incurred by the business even when the plan is idle, total fixed costs including
salary and rent, variable costs, costs which change with change in input and operations
for example wages and electricity. But this is true the author has not shown how cost

22
affects the supplier selection among international nongovernmental organizations and
therefore the study was conducted to fill this gap.

Lewis (2007) carried out a research in Kenya and found out that many organizations in
Kenya have implemented numerous information technology systems and services,
including expansion of computer networks implementation of management and
enterpriser source planning system, in house implementation of disaster recovery system
among others this is due to increasing urge for greater profit margins and
improved performance, however research is silent over how organizational culture of
management affect the supplier selection among international nongovernmental
organizations and therefore the study was conducted to fill this gap.

Borkewitz (1997) says that competition refers to the alternative firms that could provide a
product to satisfy a specific market need. The number of competitors grows daily as the
competing firms in the construction industry, try as many customers, the firms tend to get
more marketable as they modernize and get the organization on line to get the business
running. Competition is all about two rival parties involved in a similar job trying to
outdo to one another in the market whereas the author did not give us the contribution of
competition on the supplier selection among international nongovernmental organizations
in Kenya and therefore the study was conducted to fill in the gap.

Quality is a totality of features and characteristic of product and services need to perform
stated and implied needs. Quality has played an important role in the organization due to
the proper recruitment of suppliers as they usually supply products of the required
standard. But this is true the author has not shown how quality affects the supplier
selection among international nongovernmental organizations in Kenya leading to need
for study to be conducted to fill in the gaps left (Monzka, 2005).

The culture of an organization has an enormous impact on the way which an organization
delivers services to its stake holders. An initiative as implemented in order to meet a need
which is then communicated to the organization and the message is filtered by the culture
which then implements it and affect how it is delivered to customers. The implementation
ultimately determines the success or failure of an organization. The study conducted its

23
true that it has failed to indicate the effect of organization culture on the supplier
selection among international nongovernmental organizations in Kenya. Therefore the
study was conducted to fill in the gaps left.

2.4 Summary
Cost is an amount that has to be paid or given up to in order to get something. Price is
very important, not only for financial reasons but also for marketing. A fair price will
give a reasonable profit and motivates a customer to buy the commodity compared to
other firms price should be observed as closely as possible to match the value of
the product being distributed and also with the cost a foregone during the construction
process. Today’s organizations use an expanded concept of value. As result, managers
need to constantly look for opportunity to reduce cost and improve efficiency.

This research will help to fill the gaps which were left by many companies by showing
the effect of quality. Many researchers have dealt with the issue of competition among
companies to gain competitive advantages. According to ISO 8402 states that quality is a
totality of features and characteristic of a product or services to satisfy the stated or
implied need. The company has to produce goods that are of good quality satisfied by
Kenya bureau of standard (KEBS).

Competition includes the entire actual and potential rival offering and substitutes that
buyer might consider. He distinguished four levels of competition where on the degree
of production substitutability. These levels include; brand competition where a company
sees its competitors as other company offering similar products and services to the same
customers at similar prices, industry competition where a company sees its competitors as
all companies making same product or class of product, from competition where a
company sees its competitors supply the same products.

This study need to be researched to gain ideas for the organizations to work better. With
the new technology having been discovered on how to do a certain activity better
continuous. Most organizations are conducting their business on the internet and also
making orders. Information technology has created major advantages by increasing
efficiency in accuracy of records and preparation of balance sheets for the company.

24
Organization culture is a pattern of basic assumptions that has worked well enough to be
considered valid and therefore to be taught to new members as the correct way to
perceive, think and feel. He says that basic assumption guides decision makers in dealing
with the problems of external adoption, and integrating the behaviors of the organization
members. He notes that organizational culture include among other things the mission
and vision of the corporate, the values beliefs and behavioral norms and expectations
shared by the organizational members who directly influence the organization appraisal
system and satisfaction and sores levels.

2.5 Conceptual Framework

A conceptual framework is a diagrammatical research tool intended to assist the
researcher to develop awareness and understanding of the situation under scrutiny and to
communicate. The independent variables were examined in relation to how they are
affected by the dependent variable.

Figure 2.1 Conceptual Framework

Independent Variables Dependent Variable

Cost
Commitment
Quality
Supplier Selection among
Competition International NGOs in Kenya

Technology

Organizational Culture

Source: Author (2015)

2.5.1 Cost
The most obvious benefit to a company planning to contract a function is cost reduction.
This achieved on several fronts, instead of having to hire your own workers complete
with benefit you only pay services rendered by third party contractor, without workers to
directly employ, you will not have to spend on infrastructure costs.

25
2.5.2 Technology
Due to the fast changing technology, the existing product may be rendered absolute.
Companies should therefore always be informed on such changes of dong work
and ordering of raw materials. Information technology has created major advantages by
increasing efficiency in accuracy of supplier selection among the international non-
government organization.

2.5.3 Competition
Competition is the effort of two or more parties acting independently to secure the
business of third party by offering the most favorable terms to gain competitive
advantage. He further said that competition is the pillar of capitalism and that it may
stimulate innovations, encourage efficiency or drive down process.

2.5.4 Quality
Quality can be thought as the extent to which a product or services achieves
customer satisfaction. Companies have to offer quality services in order to win their
customers. The need for the good quality of end product that satisfy customer has greatly
led to a lot of considerations when procuring raw materials equipment service. Due to
this, supplier selection among the international non-government organizations cannot be
achieved without quality and equipped workforce to execute the job.

2.5.5 Organization Culture

Organizational culture is achieving a new way of thinking a focused change in the
underlying corporate cultural values and norms. Changing cooperate culture
fundamentally shifts whose work is done in a public organizations and generally leads to
renew commitment and empowerment of employee and stronger bond between the
organizations and its employees and managements. The flexibility of the organizational
culture contributes greatly to the effectiveness of among international non-governmental
organizations in Kenya.

26
 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 Introduction
This chapter covers the following sub sections: the research design, the target population,
sample design which contains sampling techniques, data collection instruments and pilot
test, and data analysis and presentation.

3.2 Research Design

A research design is the plan and structure of investigating so conceived as to obtain
answers to research questions (Kothari, 2004). A research design functions as the
research blue print for measurement and analysis of data (Creswell, 2003). As such, it
issued to show how the major parts of the research project i.e. the samples, measurement
of variables, treatments or controls, and methods of assignment work together to try to
address the core research questions.

The purpose of this study being to describe the factors affecting supplier selection,
it means it seeks to describe the phenomena as it exists. Therefore, descriptive
research design will be used as it is deemed to be the most appropriate. Various
authors recommend the use of descriptive design (Orodho, 2004; Dane, 2000) to produce
information that is of interest to policy makers even in business. Even Jackson (1994)
contends that all research is partly descriptive in nature, so far as the descriptive aspect
defines and describes the researches who, what, when, where, why, and how, which are
exactly some of the questions raised in the study. The descriptive research design will
also help save time and money.

3.3 Target Population

A population is the total collection of elements about which inferences are made
and refers to all possible cases which are of interest for a study (Sekaran, 2003). The
target population for the study was 347 employees of World Food Programme based in
Nairobi South C. The study targeted the chief procurement and logistics officers in this
organization as the unit of analysis. This is selected because it is the ones tasked with the
responsibility of sourcing for supplies of goods and services to their organizations.

27
Table 3.1 Target Population
Category Target Population Percentage

Top Management 11 3

Middle Management 24 7

Support Staff 312 90

Total 347 100

Source: Author (2015)

3.4 Sampling Design

Sampling refers to the systematic selection of a limited number of elements out of a
theoretically specified population of elements. The rationale is to draw conclusions about
the entire population. According to Kothari (2004), the ultimate test of a sample design is
how well it represents the characteristics of the population it purports to. The reason for
sampling in this study is to lower cost, accessibility of study population and the greater
speed of data collection. A sample size of 30% of the population will be taken to give a
total sample of 20 employees of WFP. This is informed by the principle that if the
elements of a population are quite similar, only a small sample is necessary to accurately
portray the characteristics of interest (Kothari 2004).

Stratified random sampling will be used where the sample size of 30% shall be
taken from each of the three categories (strata) of the population. Stratified random
sampling will be used because it ensures a greater statistical efficiency, and reduce
sampling error. Kothari (2003) supports random sampling as it satisfies the law of
statistical regularity „if a sample is chosen at random, on average it has the same
characteristics and composition as the population.

28
Table 3:2 Sample Size
Table 3.2 Sample Size
Department Target Sample Size of 30 % Percentage
Population of Target Population

Top Management 11 3 3

Middle Management 24 7 7

Support Staff 312 94 90

Total 347 104 100

Source: Author (2015)

3.5 Data Collection Instruments and Pilot Test

The overall aim of the study is to establish the factors affecting the supplier
selection among international organizations, specifically the UN agencies (WFP) in
Kenya. The bulk of data collected will therefore be primary in nature. The questionnaire
will be the main instrument, alongside face to face interviews. The use of questionnaires
for primary data collection has been supported by many scholars among them; Mugenda
(1999), and Peil (1995). A questionnaire is easier to administer, less costly, and ensures
greater depth of response, according to Mugenda (1999). A questionnaire also helps
capture factual information effectively. For the purpose of this study, the questionnaire
will be used for the mainly economical, and appropriateness reasons. A pilot study shall
be conducted using questionnaires to be administered to respondents from four UN
organizations. Those questions that will not be clear or are ambiguous will be revised so
as to collect the desired information.

3.5.1 Administration of Questionnaires

The researcher first asked permission from the authority after explaining the intention of
the study from KIM. The researcher administered questionnaire personally and make
follow up to ensure the information was obtained from the respondents in good time. The
respondents were given enough time to give out their views regarding the problem under
investigations.

29
3.5.1 Validity and Reliability of Data Collection Methods
The researcher obtained permission from relevant departmental authority to circulate
questionnaire. To ensure reliability and validity the researcher tested the questionnaire on
ten respondents. These respondents were not included in the final study. The
questionnaires were then corrected before the final distribution.

3.6 Data Analysis Methods

After the data collection and before analysis all the questionnaire schedule, they
were adequately checked for reliability and validity. The data was analyzed using
qualitative technique and quantitative technique, which involved creating descriptive
statistics manually, percentages and frequencies. The data was given in percentages
and frequencies. The data was also presented by use of table and figures. According to
Billy, (1984) data analysis procedure includes the process of designed the collected
information putting in order and that the finding can be easily and influence their
communication. After the fieldwork, before analysis, all questionnaires were adequately
checked for reliability and validity. Editing coding and tabulation was carried out.

30
 CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND INTERPRETATION OF FINDINGS
4.1 Introduction
This chapter gives the data analysis of the study findings which were collected and
analyzed by the researcher by use of quantitative and qualitative methods to enable better
understanding of study findings.

4.2 Presentation of Findings

4.2.1 Response Rate
Table 4.1 Response Rate
Response rate Frequency Percentage

Response 90 87

No Response 14 13

Total 104 100

Source: Author (2015)

Figure 4.1 Response Rate
14%

Response
No Response

87%

Source: Author (2015)

The table 4.1 and the Figure 4.1 indicate the response that was got from the field. The
87% responded to the questionnaires and they gave back their questionnaires. The 14%
did not respond to the questionnaires given to responds at the organization, the majority
gave back their questionnaires.

31
4.2.2 Gender Response
Table 4.2 Gender Response
Response Rate Frequency Percentage

Male 80 89

Female 10 11

Total 90 100

Source: Author (2015)

Figure 4.2 Gender Response

11%

Male
Female

89%

Source: Author (2015)

The table 4.2 and the figure 4.2 indicate the response that was received on the issue of
gender. In this matter it was indicated that 89% are male respondents who had the
majority response. On the other hand responses of 11% which indicate the minority
response were the female gender. This response indicates that the male gender has the
majority response.

32
33
4.2.3 Age Analysis
Table 4.3 Age Analysis

Response rate Frequency Percentage

18 – 30 25 28

31 – 40 40 44

41 – 50 18 20

Above 50 7 8

Total 90 100

Source: Author (2015)

Figure 4.3 Age Analysis

50
45 44%
40
Parcentage

35 18-30
30 28%
31-40
25
20% 41-50
20
15 above 50
10 8%
5
0
Age

Source: Author (2015)

The table 4.3 and figure 4.3 indicate the response of the age brackets of the employees of
the institution. The responses of the employee who are 18 – 30 years were 28%. The
responses of the employee who are 31-40 years were 44%. There was a response of who
are aged between 41-50 who responded by 20%. Finally there was a response from those
who are above 50years of age who responded by 8% thus indicated that the majority
respondents are aged between 31-40 years since it occupied half of the response.

34
4.2.4 Highest Education Level
Table 4.4 Highest Education Level
Response rate Frequency Percentage

Primary 0 0

Secondary 5 6

College 55 61

University 30 33

Total 90 100

Source: Author (2015)

Figure 4.4 Highest Education Level

70
61%
60
50
parcentage

Secondary
40
33% College
30
University
20
10 6%
0
education level

Source: Author (2015)

The table 4.4 and the figure 4.4 indicate the response on the highest education level
qualifications. In this area of study it was found that the organization lacked the category
of primary level of education since this category had only 0% response. There was a
response of 5% which indicated the secondary level of education. There was a response
of 61% which represented the college level of education and finally there was a response

35
of 33% response which indicated the university level of education. It was indicated that
the majority works in the organization was the college level.

4.2.5 Work Experience

Table 4.5 Work Experience
Response Rate Frequency Percentage

Below 1 year 5 6

1-4 years 25 27

5-10 years 50 56

Above 10 years 10 11

Total 90 100

Source: Author (2015)

Figure 4.5 Work Experience

45
40 37%
Percentage

35
below 1 yr
30 29%
1-4 yrs
25 24%
5-10yrs
20
above 10yrs
15
10%
10
5
0
years

Source: Author (2015)

The table 4.5 and the figure 4.5 indicate the response that was got on the work experience
of employees. There was a response of 10% which indicated the experience of less than
one year. There was a response of those who have worked in the organization between 1-
4 years who responded by 29%. There was a response of those who have worked for the
duration ranging from 5-10 years who gave a response of 37%. Finally there was a

36
response of those who have worked for the organization for the duration exceeding 10
years. This was responded upon by 24% of the total response. This indicates that there
was a good experienced worker in the organization who could be able to bring about
effective performance in the organization.

4.2.6 Effect of Cost on the Supplier Selection

Table 4.6 Effect of Cost on the Supplier Selection
Response rate Frequency

Yes 85 94

No 5 6

Total 90 100

Source: Author (2015)

Figure 4.6 Effect of Cost on the Supplier Selection

6%

yes
no
94%

Source: Author (2015)

The table 4.6 and the figure 4.6 above indicate the response on whether the cost affects
the supplier selection among international NGOs in Kenya. The 94% response forming

37
the majority indicated that the cost affects supplier selection the supplier selection among
international NGOs in Kenya. On the other hand the 6% indicated that cost of production
does not affect supplier selection the supplier selection among international NGOs in
Kenya. This enables the conclusion that it affects the supplier selection.

38
4.2.7 Rating Cost on the Supplier Selection
Response rate Frequency Percentage

Very High 68 76

High 20 22

Moderate 2 2

Low 0 0

Total 90 100

Table 4.7 Rating Cost on the Supplier Selection

Source: Author (2015)

Figure 4.7 Rating Cost on the Supplier Selection
80 76%
70
Percentage

60
great
50
moderate
40 low
30 No effect
22%
20
10
2% 0%
0
Effects

Source: Author (2015)

The above table 4.7 and the figure 4.7 indicate the rating of cost on the supplier selection
the supplier selection among international NGOs in Kenya. The rating of effects as being
very high got a 76% response which was the majority while the response contributed to
the rating of effects as being high by responding by 20%. The rating of effects of being
moderate was 2%. Finally there was 0% which the effect of being low. By comparing the
responses it can be concluded that the effect is very high.

39
4.2.8 Effects of Quality on the Supplier Selection
Table 4.8 Effect of Quality on the Supplier Selection

Response rate Frequency Percentage

Yes 84 93

No 6 7

Total 90 100

Source: Author (2015)

Figure 4.8 Effect of Quality on the Supplier Selection

7%

yes
no

93%

Source: Author (2015)

The table 4.8 and the figure 4.8 represent the response on the issue of whether the quality
is a factor affecting the supplier selection the supplier selection among international
NGOs in Kenya, The majority response of 93% indicated that the quality is a factor
affecting the supplier selection the supplier selection among international NGOs in
Kenya, while the response of 7% indicated that the supplier selection is not affected by
quality. In this matter it can be noted that quality affects supplier selection to a great
extent.

40
4.2.9 Rating Quality on the Supplier Selection
Table 4.9 Rating Quality on the Supplier Selection

Response rate Frequency Percentage

Very high 17 19

High 60 67

Moderate 9 10

Low 2 2

Poor 2 2

Total 90 100

Source: Author (2015)

Figure 4.9 Rating Quality on the Supplier Selection

80
67%
70
60 very high
50 high
Percentage

40 moderate
30 low
19%
20 poor
10%
10 2% 2%
0
Rating

Source: Author (2015)

The table 4.9 and the figure 4.9 indicated the response that was got on the issues of rating
of effect of quality to the supplier selection the supplier selection among international
NGOs in Kenya. The rating of effect as very high was 19% while the rating of effect as
high by the employees was 67%. There was a response of rating of effect as moderate
which was 10%. There was response of rating of effect as low which was 2%. Finally
there was response of 2% on the category of poor.

41
4.2.10 Effects of Competition on the Supplier Selection
Table 4.10 Effects of Competition on the Supplier Selection

Response rate Frequency Percentage

Yes 88 98

No 2 2

Total 90 100

Source: Author (2015)

Figure 4.10 Effects of Competition on the Supplier Selection
2%

yes
no

98%

Source: Author (2015)

The table 4.10 and the figure 4.10 indicate the response on whether competition affects
the supplier selection the supplier selection among international NGOs in Kenya. The
majority response of 98% indicated that the competition affects the supplier selection the
supplier selection among international NGOs in Kenya. On the other hand the minority of
2% indicated that the competition does not affect the supplier selection the supplier
selection among international NGOs in Kenya. By comparing the two responses it was
noted that the competition affect supplier selection.

42
4.2.11 Rating Competition on the Supplier Selection
Table 4.11 Rating Competition on the Supplier Selection

Response rate Frequency Percentage

Very high 16 18

High 65 72

Moderate 6 7

Low 3 3

Total 90 100

Source: Author (2015)

Figure 4.11 Rating Competitions on the Supplier Selection

80 72%
70
60 very much
Percentage

50 much
40 moderate
30 minimum
18%
20 no effect
7%
10 3% 0%
0
Rating

Source: Author (2015)

The table 4.11 and the figure 4.11 indicate the response on the rating of competition
effect on the supplier selection the supplier selection among international NGOs in
Kenya. The response of effect is very high was 18%, the rating of effect is being high
was 72% which was the majority where by the response of the effect as moderate was
7%. Finally there was a response effect as being low whereby those who responded to
that category were 3%. This indicates that the competition effect the supplier selection
the supplier selection among international NGOs in Kenya to high extent.

43
4.2.12 Effect of Technology on the Supplier Selection
Table 4.12 Effect of Technology on the Supplier Selection

Response rate Frequency Percentage

Yes 80 89

No 10 11

Total 90 100

Source: Author (2015)

Figure 4.12 Effect of Technology on the Supplier Selection

90 89%
80
70
Percentage

60
50 Yes
40 No
30
20 11%
10
0

Effects

Source: Author (2015)

The response from the above table 4.12 and the figure 4.12 indicate analysis of whether
technology is affecting the supplier selection the supplier selection among international
NGOs in Kenya. The 89% indicated that the technology is a factor affecting the supplier
selection the supplier selection among international NGOs in Kenya, while 11% indicated
that technology has no effect on supplier selection. The study findings indicated that

44
technology affects the supplier selection the supplier selection among international NGOs
in Kenya to a great extent.

4.2.13 Extent of Technology on the Supplier Selection

Table 4.13 Extent of Technology on the Supplier Selection

Response rate Frequency Percentage

Very high 20 22

High 60 67
Moderate 8 9

Low 2 2
Total 90 100
Source: Author (2015)

Figure 4.13 Extent of Technology on the Supplier Selection

80
67%
70
60
very high
Percentage

50
high
40
moderate
30 22%
low
20
9%
10 2%
0
Rating

Source: Author (2015)

The table 4.13 and the figure 4.13 indicate the response on the extent to which the effect
of technology the supplier selection the supplier selection among international NGOs in
Kenya. In this matter it was indicated by the response of 22% that technology has the
great effect on the supplier selection the supplier selection among international NGOs in
Kenya. There was a response of rating of effect as moderate which gave a response of
67% which was the majority. The response of effect as moderate was 9%. Finally there

45
was a response effect as being low whereby those who responded to that category were
2%. This indicated that it must have high impact since the majority response rated the
effect as high impact since the majority response rated the effect as great.

4.2.14 Effect of Organization Culture on Product Quality

Table 4.14 Effect of Organization Culture on Product Quality

Response rate Frequency Percentage

Yes 78 87

No 12 13

Total 90 100

Source: Author (2015)

Figure 4.14 Effect of Organization Culture on Product Quality

90 87%
80
70
Percentage

60
50 Yes
40 No
30
20 13%
10
0
Effects

Source: Author (2015)

The response from the above table 4.14 and the figure 4.14 indicate analysis of whether
organization culture is affecting the supplier selection the supplier selection among
international NGOs in Kenya. The 87% indicated that the organization culture is a factor
affecting the supplier selection among international NGOs in Kenya, while 13% indicated

46
that organization culture has no effect to the supplier selection the supplier selection
among international NGOs in Kenya. The study findings indicated that the organization
culture affects the supplier selection the supplier selection among international NGOs in
Kenya to a great extent.

4.2.15 Extent of Organization Culture on the Supplier Selection

Table 4.15 Extent of Organization Culture on the Supplier Selection

Response rate Frequency Percentage

Very high 18 20

High 62 69

Moderate 8 9

Low 2 2

Total 90 100

Source: Author (2015)

Figure 4.15 Extent of Organization Culture on the Supplier Selection

80
69%
70
60
Percentage

Very high
50
High
40
Moderate
30
20% Low
20
9%
10
2%
0
Effects

Source: Author (2015)

The table 4.15 and the figure 4.15 indicate the response on the extent to which
organization culture affects the supplier selection among international NGOs in Kenya. In

47
this matter the response of effect is very high was 20%, the rating of effect as high was
69%, the rating of effect is being moderated where by the response was 9%. Finally there
was a response effect as being low whereby those who responded to that category were
2%. This indicated that it must have great impact since the majority response rated the
effect as great impact since the majority response rated the effect as great.

4.3 Summary of Data Analysis

4.3.1 General Information
The 87% responded to the questionnaires & they gave backs their questionnaires. The
13% did not respond to the questionnaires. It was indicated that 89% are the male
respondents who had the majority response. On the other hand responses of 11% which
indicate the minority response were the female gender. The response of the employees
who are 18-30 years was 28% .who were 31-40 years was 44%. There was a response of
those who are aged between 41-50 who responded by 20%. Finally there was a response
from those who are above 50 years of age who responded by 8%. The organization has
the category of primary level education 0% response. There was a response of 6% which
indicated the secondary level of education. There was a response of 61% which indicated
the collage level of education, and finally there was a response of 33% response which
indicated the University level of education. It was indicated that the majority worker in
the organization were University level of education.

4.3.2 Costs
The response of 94% indicated that cost of production affects the supplier selection the
supplier selection while 6% indicate that it does not affect. The cost of production was
said to be among the factors which affect the supplier selection among international
NGOs in Kenya. In this case the respondents indicated that the organization for it to
affect supplier selection services it was to consult with the Central Government officers
in order for it to be given the mandates of what need to be done when and why. For an
organization to prosper, the cost is considered. The higher the cost, the high chances of
having quality suppliers, Small business operations are mainly affected by fluctuation in
the prices of resources and labour.

4.3.3 Quality

48
The study sought to know the extent to which the quality affects the supplier selection
among international NGOs in Kenya. From the findings majority 93% of the
respondents indicated that quality is factor affecting the supplier selection among
international NGOs in Kenya to a very great extent while 7% of the respondents
indicated that quality do not affects the supplier selection among international NGOs in
Kenya to a great extent. It was indicated that quality can be thought as the extent to which
a product or services achieves customer satisfaction. Organizations have to offer quality
services in order to win their customers.

4.3.4 Competition
The response of 98% indicated that competition affects supplier selection while 2%
indicate that it does not affect. From the research, 98% of the respondents rated the effect
of competition on the supplier selection among international NGOs in Kenya as very
great. In this case there was no industry leader and companies would compete to
distinguish themselves from their rivals. In organizations where organization were of
different national origins culture and goals competition was likely to be high and this
competition intensifies among existing NGOs when there were humorous ox equally
balanced companies (Drummond, 2001).

4.3.5 Technology
The study sought to know the extent to which the technological advancement affects the
supplier selection among international NGOs in Kenya. From the findings majority
(89%) of the respondents indicated that technological advancement factor affecting
the supplier selection among international NGOs in Kenya to a very great extent, while
(11%) of the respondents indicated that technological advancement have no affects to
the supplier selection among international NGOs in Kenya to a great extent. This
concurred with Dutton and Starbuck (2002) who indicated that investments in technology
facilitate service assessment and improvement process is essential.

4.3.6 Organization Culture

The response of 87% indicated that organizational culture affects the supplier selection
among international NGOs in Kenya while 13% indicate that it does not affect the
organizational culture was found from the majority respondents to be among the key

49
determinants of the effectiveness in the supplier selection among international NGOs in
Kenya. In this regard the respondents indicated that the NGOs existing culture is the one
which gives way in which things need to be done either pertaining supplier selection. The
NGOs should have good plan on the improvement of the organizational culture which
will enhance improvement in the supplier selection among international NGOs in Kenya.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Introduction
The chapter has presented the summary of the finding the conclusion & the
recommendation of what need to be done to improve the supplier selection; finally the
suggestion for further research has been given in order to shed light on the key areas
which need more research to be conducted to bring about economic growth in the
country.

5.2 Summary of Findings

5.2.2 How does cost affect the supplier selection among international NGOs in
Kenya?
The majority of respondents said that cost is among the factor affecting the supplier
selection among international NGOs in Kenya. In this matter the rating of cost on the
supplier selection among international NGOs in Kenya was rated as follows, the rating of
effects as being very high got a 76% response which was the majority while the response
contributed to the rating of effects as being high by responding by 22%. The rating of
effects of being moderate was 2%. Effects of being low were 2%. Finally there was 0%
which the effect of being poor. By comparing the responses it can be concluded that the
effect is high.

5.2.3 To what extent does quality affect the supplier selection among international
NGOs in Kenya?
The respondents said that quality has a great effect on the supplier selection among
international NGOs in Kenya. The response that was got on the issues of rating of effect
of quality to the supplier selection among international NGOs in Kenya was rated as

50
follows; the rating of effect as very high was 19% while the rating of effect as high by the
employees was 67%. There was a response of rating of effect as moderate which was
10%. There was response of rating of effect as low which was 2%. Finally there was
response of 2% on the category of poor.

5.2.4 What is the effect of competition on the supplier selection among international
NGOs in Kenya?
From the research, the respondents rated the effect of competition on the supplier
selection among international NGOs in Kenya as very great. The major reason leading to
existence of high competitions is the fact that we live in a world of scarcity where
resources are not enough for each of us. Due to this reason, the response on the rating of
competition effect on the supplier selection among international NGOs in Kenya was as
follows; The response of effect is very high was 18%, the rating of effect is being high
was 72% which was the majority where by the response of the effect as moderate was
7%. Finally there was a response effect as being low whereby those who responded to
that category were 3%. This indicates that the competition effect the supplier selection
the supplier selection among international NGOs in Kenya to high extent.

5.2.5 What is the effect of technology on the supplier selection among international
NGOs in Kenya?

The respondents said that technology has a great influence on supplier selection among
international NGOs in Kenya. The response on the extent to which technology effect the
supplier selection among international NGOs in Kenya was as follows; it was indicated
by the response of 63% which was the majority response that technology has the great
effect on the supplier selection among international NGOs in Kenya. There was a
response of rating of effect as moderate which gave a response of 25%. The response of
effect as low was 12% on the category of no effect there was no response. This indicated
that it must have great impact since the majority response rated the effect as great impact
since the majority response rated the effect as great.

51
5.2.6. What is the effect of organization culture on the supplier selection among
international NGOs in Kenya?
Organization culture was seen by the big number of respondents who said that
organization culture is one of the key factors in enabling affecting the supplier selection
among international NGOs in Kenya. In this regard the response on the extent to which
organization culture affects the supplier selection among international NGOs in Kenya
was as follows; In this matter the response of effect is very high was 20%, the rating of
effect as high was 69%, the rating of effect is being moderated where by the response
was 9%. Finally there was a response effect as being low whereby those who responded
to that category were 2%. This indicated that it must have great impact since the majority
response rated the effect as great impact since the majority response rated the effect as
great.

5.3 Conclusion
In this paper, cost in the supplier selection among international NGOs in Kenya was
reviewed. It is evident from this study that efficiency in service delivery is paramount in
supplier selection practice. Effectiveness in the running of the private organization as a
whole depends on the level of effectiveness in the factors affecting supplier selection. A
fair price will give a reasonable profit and motivates a customer to buy the commodity
compared to other firms. Price should be observed as closely as possible to match the
value of the product being distributed and also with the cost a foregone during the
construction process.

From the findings the study concluded that NGOs should improve the level of
quality and willingness to invest and advance in modern technology in order to
facilitate service assessment, improve process and communication which are essential for
effective and efficient in quality among international NGOs in Kenya. TQM demands
that our focus be on the processes that create output rather than the output itself. Since
processes create output, a logical focus is on the process of creation itself rather than
result. An emphasis on process rather than product demands that suppliers provide
evidence of process capacity on regular basis. Product quality service is a process that
encompasses all stakeholders.

52
Indeed the study found out that competition is a major factor that influences product
supplier’s selection. Without competition, supplier selection is undoubtedly out of
business. Competition includes the entire actual and potential rival offering and
substitutes that buyer might consider. There are four levels of competition where on the
degree of production substitutability. These levels include; brand competition where a
organizations sees its competitors as other company offering similar products and
services to the same customers at similar prices, industry competition where a company
sees its competitors as all companies making same product or class of product, from
competition where a company sees its competitors supply the same products.

From the findings the study concluded that NGOs should improve the level of
adoption of technology and willingness to invest and advance in modern technology in
order to facilitate service assessment, improve process and communication which are
essential for effective and efficient the supplier selection among international NGOs in
Kenya. Technology adoption in private organization would enable the provision of high-
quality services to customers, reduce time in services in getting imaging results, ensure
the resulting system meets the needs of clients and improve the accessibility of relevant
information efficiently and effectively.

The conclusion in regard to training, it can be concluded that training is a key component
in the supplier selection in private organization in Kenya. It increases employees'
involvement in service delivery and interactions with clients. Employee training has also
been established to improve the employee confidence in rendering the service, as well as
the confidence of clients in the standards of services rendered by private organization. To
enhance product quality and competence in service delivery, therefore, continuous
training is essential.

5.4 Recommendations
5.4.1 Cost
The NGOs management should ensure that there is appropriate cost that motivates
employee to work effectively to the key goals sets for them to accomplish in the whole
issue. This prices setting are of two categories (internal and external). Internal factors are
those factors that affect organization directly cost and objectives while external factors

53
that affect indirectly i.e. demand and competition. In regard to this NGOs management
should be keen on these internal and external factors to enable the industry to learn
smoothly.

5.4.2 Quality
The NGOs should be keen on modern technological changes and try to their best adapt to
those changes in regard to product quality. Technology adoption in private sectors
should be encouraged to enable high-quality services to customers, reduce time in
services in getting imaging results, ensure the resulting system meets the needs of clients
and improve the accessibility of relevant information efficiently and effectively.

5.4.3 Competition
From the findings and conclusion, the study recommends that NGOs should adopt
modern technology so as to facilitate high competition, improve process and
communication, provide high-quality services to customers, Competition is the effort of
two or more parties acting independently to secure the business of third party by offering
the most favorable terms to gain competitive advantage. Competition should be used as a
pillar of capitalism and that it may stimulate innovations, encourage efficiency or drive
down process.

5.4.4 Technology
The NGOs should be keen on modern technological changes and try to their best adapt to
those changes in regard to supplier selection. Technology adoption in private sector
should be encouraged to enable high-quality services to customers, reduce time in
services in getting imaging results, ensure the resulting system meets the needs of clients
and improve the accessibility of relevant information efficiently and effectively.

5.4.5 Organizational Culture

The NGOs should have an understanding of the current organizational culture before it
engages on matters of supplier selection. Management of the institutions should be very
keen to ensure the existing culture in the institution is the one which can support the
process effectively.

5.5 Suggestion for Further Study

54
The study need to be carried out on this particular area of the factors effecting the
supplier selection among international NGOs in Kenya since the researchers concentrated
on a few factors and did not tackle others. It was important to carry out study on the
effect of leadership style, organizational structure and the effect of competency on the
supplier selection among international NGOs in Kenya.

55
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