Influence of Sourcing Ethics on Procurement Performance of State Corporations in Kenya

Abstract

The main objective of this study was to find out the influence of sourcing ethics on procurement performance of Kenyan state corporations. Specifically, it sought to determine whether supplier selection ethics, ethical policies and codes, procedural justice and supplier diversity influence the procurement performance in Kenyan state corporations. It also sought to determine the moderating effect of organizational size on relationship between sourcing ethics and procurement performance. The inadequacy of literature on sourcing ethics, little attention in terms of research and the unethical behaviours witnessed in the Kenyan public procurement system provided the gap for this study. The main limitations of the study were that some of the respondents were unwilling to give the required information, and the study covered only state corporations leaving out county governments which are also considered public. Theories used were the theory of justice, Kantian ethics and the theory of planned behavior. The Guy’s model at the work place and the Hunt-Vitell Ethical models were also used to support the study. The study employed a mixed research design and the study population was the procurement managers in the state corporations’ procurement departments. A census study of all state corporations in Kenya was carried out. The study used a pragmatic research philosophy which is deemed to be most appropriate for the mixed methods research design adopted by the study. Data was collected using questionnaires which were self-administered by the researcher. Cronbach’s alpha (α) reliability test was used to assess internal consistency of measurements. Data was collected from all the 170 procurement heads in all Kenyan state corporations. Descriptive statistics such as standard deviations and means were used and the inferential statistics used included Pearson correlation, analysis of variance, and ordinal regression analysis. Findings of the study showed that supplier selection ethics, ethical policies and codes, procedural justice and supplier diversity had significant and positive effect on procurement performance of the Kenyan state corporations. The regression results showed that procurement performance was significantly influenced by sourcing ethics. The study rejected the first four null hypotheses and concluded that the state corporations should adopt ethical sourcing practices to improve procurement performance. It was established that organizational size does not significantly moderate the relationship between sourcing ethics and procurement performance. The study recommends that state corporations should regularly assess child and forced labour, ensure fairness in the sourcing processes, establish supplier appraisal audit policies and corruption prevention committees, adopt ethical guidelines by regulatory and professional bodies, ensure ethical use of information technology in procurement, as well as investing in the right information technology infrastructure to boost fairness and transparency in the procurement processes. The study also gave suggestions for further research.