An Investigation of Effects of Electronic Procurement Systems on Organizational Performance of Freight Firms in Mombasa County, Kenya

Abstract

The application of electronic procurement systems immensely influences the performance of businesses especially in the freight sector. However, with existing challenges such as the vertical segmentation of the industry that allows big players to enjoy a market share of clients, smaller firms suffer as they remain to serve the few clients they can manage. Therefore, the purpose of this study was to investigate the effect of the electronic procurement system on the organizational performance of freight firms in Mombasa County. Specific objectives of the research were to investigate the effect of electronic marketplace, electronic tendering, electronic sourcing, and electronic material management on the organizational performance of freight firms in Mombasa County. The study further employed a descriptive design and stratified sampling procedure that selected samples to represent the population. The study sampled 254 employees including general managers and departmental heads from 80 freight firms in Mombasa County. Electronic mail questionnaires were the appropriate method of data collection methods and procedures. In addition, descriptive statistics of frequencies, means, standard deviation and variance were used as the data analysis techniques and procedures. Inferential statistics of Pearson correlation and linear regression was also used as the analysis methods, with the statistical package for social sciences (SPSS) as the analytical tool. Findings revealed that correlation analysis of electronic procurement systems positively and significantly affected the organizational performance of freight firms in Mombasa County with regression analysis showing a weak positive and significance p-value of 0.02. Moreover, the electronic marketplace had a standardized coefficient of 0.183 with a higher t-value of 3.165 and a p-value of 0.002 that was statistically significant. In addition, there was a weak positive and significant correlation between the electronic marketplace system and organizational performance (r = 205, p = 0.002). Electronic tendering showed a weak positive and significant correlation against returns on assets (r = 0.157, p = 0.020).  Electronic sourcing had a statistically insignificant and negative effect on the transparency with there was a weak positive and insignificant correlation between electronic sourcing and organizational performance (r = 0.22, p = 0.743). The study therefore recommended more emphasis by policymakers in the standardization and streamlining of electronic processes across distinct departments since they are inter-linked with the procurement systems in most of these freight firms.