Effects of procurement risk management strategies on public procuring entities' performance

Authors

DOI:

https://doi.org/10.16930/2237-766220243497

Keywords:

Keywords: Risk Management Strategies, Procurement Risks, Investment, Performance.

Abstract

Organizations implement risk management to mitigate the effects of unforeseen events in their operation settings. The current study aims to investigate the relationship between procurement risk-management strategies and the performance of public higher-learning institutions registered by the National Council for Technical Education and Vocation Training in Tanzania. The findings of the study provide valuable insights that can influence the risk management strategies and performance management policies of public procuring entities. The Principal-Agent Theory guided the study. A convergent parallel mixed-method design was employed, utilizing a census method that included all 16 public high-learning institutions in Dar es Salaam as the sample. Primary data were collected through structured questionnaires and interviews. Quantitative data analysis involved descriptive statistics to compute percentages and means of school respondents. Multiple Regressions was employed for inferential statistics analysis. Qualitative data analysis was conducted using thematic analysis. The study identified risks affecting the performance of PEs including non-compliance risks, planning risks, managerial risks, contract management risks, and project delays. To address these challenges, the study recommends that entities should develop and adhere to their procurement plans, invest in capacity building to strengthen ethical practices to avoid unethical behavior, and address non-compliance issues. Entities should use a combination of strategies based on internal policies, experience, and the preferences of the procurement assignment.

References

ADB. (2021). Procurement Risk Framework (Issue December). http://dx.doi.org/10.22617/TIM210527-2 DOI: https://doi.org/10.22617/TIM210527-2

Ali, I., Arslan, A., Chowdhury, M., Khan, Z., & Tarba, S. Y. (2022). Reimagining global food value chains through effective resilience to COVID-19 shocks and similar future events : A dynamic capability perspective. Journal of Business Research, 141, 1-12. https://doi.org/10.1016/j.jbusres.2021.12.006 DOI: https://doi.org/10.1016/j.jbusres.2021.12.006

Amoah, C., & Nkosazana, H. (2023). Effective management strategies for construction contract disputes. International Journal of Building Pathology and Adaptation, 41(6). https://doi.org/10.1108/IJBPA-01-2022-0004 DOI: https://doi.org/10.1108/IJBPA-01-2022-0004

Amoah, C., & Steyn, D. (2023). Barriers to unethical and corrupt practices avoidance in the construction industry. International Journal of Building, 41(6), 85-101. https://doi.org/10.1108/IJBPA-01-2022-0021 DOI: https://doi.org/10.1108/IJBPA-01-2022-0021

CIPS. (2013). Risky business: An introduction to Procurement Risk Management - CIPS Australasia.

Cronbach, L. J. (1951). Coefficient Alpha and the Internal Structure of Tests. Psychometrika, 16(3), 297–334. https://doi.org/10.1007/BF02310555 DOI: https://doi.org/10.1007/BF02310555

Ebekozien, A. (2023). Unravelling the encumbrances in procurement management of Nigeria ’ s infrastructure development : pitfalls and prospects of projects. Property Management, 41(1), 20-40. https://doi.org/10.1108/PM-11-2021-0103 DOI: https://doi.org/10.1108/PM-11-2021-0103

EU. (2010). Risk management in the procurement of innovation - Concepts and emperical evidence in the European Union. Publications Office of the European Union. https://doi.org/10.2777/92030

Fozia, N. (2022). Risk Identification and Supply Chain Performance in Construction Industry in Kenya. International Journal of Science and Business, 12(1), 81-96. https://doi.org/10.5281/zenodo.6983001

Hong, Z., Lee, C. K. M., & Zhang, L. (2018). Procurement risk management under uncertainty: a review. Industrial Management and Data Systems, 118(7), 1547-1574. https://doi.org/10.1108/IMDS-10-2017-0469 DOI: https://doi.org/10.1108/IMDS-10-2017-0469

Hopkin, P. (2017). Fundamentals of risk management (4th ed.). Kogan Page Limited.

Kothari, C., & Garg, G. (2014). Research methodology (3rd ed.). New Age International (P) Ltd.

Kutsch, E., Hall, J., & Stodolsky, F. (2020). Improving Public Procurement Risk Management.

Laryea, S. (2018). Procurement strategy and outcomes of a new universities project in South Africa. Engineering, Construction and Architectural Management, 26(9), 2060-2083. https://doi.org/10.1108/ECAM-04-2018-0154 DOI: https://doi.org/10.1108/ECAM-04-2018-0154

Manu, P., Asiedu, R. O., Mahamadu, A., Olomolaiye, P. O., Booth, C., & Manu, E. (2021). Contribution of procurement capacity of public agencies to attainment of procurement objectives in infrastructure procurement. Engineering, Construction and Architectural Management, 28(10), 3322-3345. https://doi.org/10.1108/ECAM-05-2020-0375 DOI: https://doi.org/10.1108/ECAM-05-2020-0375

Manuj, I., & Mentzer, J. T. (2008). Global supply chain risk management strategies. International Journal of Physical Distribution & Logistics Management, 38(3), 192-223. https://doi.org/10.1108/09600030810866986 DOI: https://doi.org/10.1108/09600030810866986

Nokwazi, N., & Prunella, P. (2017). Evaluation of the Current Procurement Planning Process in a District Municipality. Public Policy and Administration Research, 4, 19-34. https://api.semanticscholar.org/CorpusID:203443070 DOI: https://doi.org/10.18488/journal.74.2017.41.19.34

Nyamah, E. Y., & Ewusi, M. (2022). Procurement process risk and performance : empirical evidence from manufacturing firms. Benchmarking: An International Journal, February, 1463-5771. https://doi.org/10.1108/BIJ-06-2021-0306 DOI: https://doi.org/10.1108/BIJ-06-2021-0306

OECD. (2019a). Government at a Glance 2019. OECD Publishing. https://doi.org/10.1787/8ccf5c38-en DOI: https://doi.org/10.1787/8ccf5c38-en

OECD. (2019b). Organisation for Economic Co-operation and Development (OECD) Government at a Glance. OECD Publishing.

OECD. (2022). Public Procurement in Lebanon: Towards a Risk Management Approach (No. 16).

Okonjo, E. A., Magutu, P. O., & Nyaoga, R. B. (2016). Procurement risk management practices and supply chain performance among mobile phone service providers in Kenya. International Journal of Industrial Engineering Computations, 6(January), 141-156. https://doi.org/10.5267/j.msl.2015.12.007 DOI: https://doi.org/10.5267/j.msl.2015.12.007

Omar, O. A., Sell, D., & Rover, A. J. (2017). The Information Asymmetry Aspect of Agency Theory in Business Compliance Contexts: A Systematic Review. International Congress of Knowledge and Innovation-Ciki, 1(1), 1-10. https://proceeding.ciki.ufsc.br/index.php/ciki/article/download/305/185

Owuor, O. J., Obura, J., & Odondo, A. J. (2018). Relationship between procurement risk management strategies and procurement performance of sugar firms in Kenya. International Journal of Management and Commerce Innovations, 6(1), 5-14.

Panya, K. O., & Awour, E. (2023). Public Procurement Reforms in Africa: Challenges, Constraints and Improvement Opportunities. Strategic Journal of Business & Change Management, 10(2). https://doi.org/10.61426/sjbcm.v10i2.2676 DOI: https://doi.org/10.61426/sjbcm.v10i2.2676

Parast, M. M., & Subramanian, N. (2020). An examination of the effect of supply chain disruption risk drivers on organizational performance: evidence from Chinese supply chains. Supply Chain Management, 26(4), 548-562. https://doi.org/10.1108/SCM-07-2020-0313 DOI: https://doi.org/10.1108/SCM-07-2020-0313

PPRA. (2021). Public Procurement Regulatory Authority (PPRA). Annual Procurement Report 2020/2021.

Ramasamy, G., Dhanya, R., Nagappan, K., & Santhosh, S. (2017). a Case Study on selection of appropriate procurement system for small scale construction indistry. II International Conference on Engineering and Technology Systems, 13-18.

Saunders, M., Lewis, P., & Thornhill, A. (2009). Research Methods for Business Students (5th ed.). Prentice Hall. https://doi.org/10.1007/s13398-014-0173-7.2

Sharma, A., Adhikary, A., & Bikash, S. (2020). Covid-19 ′ s impact on supply chain decisions : Strategic insights from NASDAQ 100 firms using Twitter data. Journal of Business Research, 117(May), 443-449. https://doi.org/10.1016/j.jbusres.2020.05.035 DOI: https://doi.org/10.1016/j.jbusres.2020.05.035

TVET. (2021). TVET Indicators Report.

Uswege, S. I., & Yamlinga, B. G. (2021). Perceived Robustness and Efficacy of Procurement Risk Controls: a Tanzanian Public Sector Context. Journal of Logistics, Management and Engineering Sciences, 03(2), 53-61. http://41.93.71.3:8080/xmlui/handle/123456789/142

World Bank. (2021). Enhancing Government Procurement Systems. A Strategy for Sustainable Development.

Downloads

Published

2024-09-03

How to Cite

Mwalukasa, B. E., & Sallwa, A. A. (2024). Effects of procurement risk management strategies on public procuring entities’ performance. Revista Catarinense Da Ciência Contábil, 23, e3497. https://doi.org/10.16930/2237-766220243497

Issue

Section

Articles