Supplier Relationship Management Strategies and Procurement Performance in Nigerian Government Agencies
Abstract
This correlational research aimed to investigate the relationship between Supplier Relationship Management (SRM) strategies and procurement performance in Nigerian government agencies. Adopting a correlational research design, data were collected from a sample of 120 respondents through a structured questionnaire. The survey encompassed aspects of SRM, communication with suppliers, and overall procurement performance. The study utilized SPSS27 for data presentation and analysis, employing descriptive statistics, multiple regression, correlation analysis, and ANOVA. The research findings revealed unexpected negative correlations between the implementation of SRM strategies and improved procurement performance. Despite this, communication and collaboration with suppliers did not exhibit a significant negative impact on procurement performance. A well-defined and structured SRM framework was found to contribute positively to the reduction of procurement costs within Nigerian government agencies. The hypotheses were tested using ANOVA, indicating significant relationships between SRM strategies, communication with suppliers, SRM framework, and procurement performance. These findings necessitate a reevaluation of existing SRM strategies and a focus on enhancing communication channels and robust SRM frameworks. In conclusion, the study contributes to the understanding of the dynamics between SRM and procurement performance in the context of Nigerian government agencies. Recommendations include reassessing SRM strategies, enhancing communication channels, developing robust SRM frameworks, investing in training, promoting supplier evaluation, integrating technology solutions, encouraging ethical procurement practices, and facilitating knowledge exchange. In summary, this study highlights the complexities of SRM in Nigerian government agencies, offering valuable insights for practitioners and policymakers. Further research is recommended to explore additional factors influencing SRM in diverse organizational settings, contributing to the ongoing discourse on effective procurement practices.
CHAPTER ONE
INTRODUCTION
Background Information
Supplier Relationship Management (SRM) has gained paramount importance in the realm of global procurement practices, serving as a linchpin for effective and sustainable sourcing strategies. The critical role of SRM is underscored by Akenroyeet and Aseka (2022), who delve into the supplier selection criteria and its impact on the performance of manufacturing firms. This heightened focus on suppliers is particularly pertinent in the context of Nigerian government agencies, where procurement holds a central position in public administration. Al-Abdallah et al. (2022) reinforce this perspective, emphasizing the impact of supplier relationship management on the competitive performance of manufacturing firms. The symbiotic relationship between government agencies and suppliers forms a complex web that significantly influences the efficiency, transparency, and overall effectiveness of procurement processes.
In the context of Nigeria, a country experiencing constant evolution as an emerging economy, the dynamics of supplier relationships within government agencies play a pivotal role in shaping governance and resource allocation strategies. The studies conducted by Kosgei and Gitau (2016) and Mungai (2022) highlight the effect of supplier relationship management on organizational performance, with a specific focus on Kenya Airways Limited and the real estate industry in Kenya, respectively. As Nigerian government agencies are major consumers of goods and services, the effective management of relationships with suppliers becomes imperative for fulfilling their mandates. The study by Kiplagat and Kiarie (2021) on the effect of supplier management practices on supply chain performance among state corporations in Kenya further underscores the relevance of supplier management in the broader African context.
In the pursuit of socio-economic development, Nigerian government agencies navigate a complex landscape where supplier relationships are integral to the success of procurement processes. Understanding the intricacies of these relationships is crucial for ensuring that procurement aligns with governmental objectives and contributes positively to the nation’s development. The study by Odero and Machuki (2021) on public procurement ethics and performance within the Kakamega County Government in Kenya provides insights into the ethical considerations that can impact the procurement process. Such considerations are pertinent for Nigerian government agencies aiming to enhance governance and optimize resource allocation.
Forkmann et al. (2016) bring attention to the concept of Supplier Relationship Management capability, suggesting that a well-defined and structured framework is essential for successful supplier management. The capability to effectively manage supplier relationships is paramount for Nigerian government agencies, as highlighted by Mwangi and Muli (2022) in their exploration of the influence of Supplier Relationship Management on the performance of food and beverage manufacturing firms in Kenya. The complexities involved in managing relationships with suppliers require a sophisticated approach, and insights from studies such as these contribute to the development of robust SRM frameworks.
The challenges faced by Nigerian government agencies in managing relationships with suppliers are multifaceted. The study by Selebwa and Moronge (2018) on the influence of procurement management practices on the performance of county governments in Kenya provides a contextual understanding of challenges that may be relevant to Nigerian agencies as well. Such challenges may include issues related to communication, negotiation strategies, and the absence of comprehensive SRM frameworks. Courtsen and Felde (2015) contribute to this discussion by presenting a structured methodology for supplier selection and evaluation in a supply chain, emphasizing the need for a systematic approach to overcome challenges in supplier relationships.
To address the identified challenges and enhance the efficiency of procurement processes, it becomes imperative to examine the current Supplier Relationship Management practices employed by Nigerian government agencies. This examination forms the first specific objective of this study. The literature suggests that understanding the existing practices is a critical first step towards implementing improvements. The insights from studies such as Owalla (2022) on the management of devolved funds in Kisumu Municipality and Meyer and Rowan’s (2021) exploration of creating lean suppliers provide valuable perspectives on the practical aspects of supplier management that Nigerian government agencies can consider in their context.
As Nigeria aims for comprehensive governance and effective resource allocation, the impact of Supplier Relationship Management strategies on procurement performance becomes a focal point for exploration. The second specific objective of this study aligns with the findings of Mitra and Datta (2022), who conducted an exploratory study on the adoption of green supply chain management practices and their impact on performance in Indian manufacturing firms. Understanding the correlation between effective SRM strategies and improved procurement performance is crucial for Nigerian government agencies seeking to enhance their overall efficiency. The hypothesis proposed by the study posits a positive correlation between the implementation of effective SRM strategies and improved procurement performance, aligning with the broader discourse on the significance of robust supplier relationships.
Problem Statement
The effective management of Supplier Relationship Management (SRM) is essential for the success of procurement processes within Nigerian government agencies (Akenroyeet & Aseka, 2022). However, existing literature reveals several gaps that warrant comprehensive investigation to inform evidence-based strategies for enhancing procurement efficiency. One key gap is the absence of dedicated research on the specific SRM strategies employed by Nigerian government agencies. While studies explore supplier selection criteria and practices in manufacturing firms, there is a need for tailored insights into the public sector’s unique challenges and objectives (Al-Abdallah et al., 2022).
Another gap lies in the lack of a dedicated assessment of challenges faced by Nigerian government agencies in managing relationships with suppliers. Although challenges in county governments in Kenya are explored by Selebwa and Moronge (2018), a focused examination of obstacles hindering effective SRM in Nigerian government agencies is necessary, encompassing communication issues, negotiation strategies, and the absence of comprehensive SRM frameworks. This gap is particularly significant in the context of public procurement, where intricate relationships with suppliers impact overall procurement efficiency.
Moreover, there is a notable gap in understanding the direct impact of SRM on procurement performance within the Nigerian government context. While studies investigate the influence of SRM on the performance of specific industries, a comprehensive analysis of how SRM strategies contribute to or hinder procurement performance in the public sector is essential (Mwangi & Muli, 2022). This knowledge is critical for shaping effective SRM strategies tailored to the government’s objectives and challenges.
Ethical considerations within supplier relationships constitute another gap that requires attention. While public procurement ethics in a Kenyan county government are touched upon by Odero and Machuki (2021), a comprehensive examination of ethical dimensions within supplier relationships in Nigerian government agencies is necessary. This includes transparency, fairness, and adherence to ethical standards in supplier selection and contract management.
Additionally, there is a scarcity of research addressing the integration of performance management processes within the supplier relationship context in Nigerian government agencies. Understanding how performance management is integrated into the supplier relationship framework within the government context is crucial for evaluating the effectiveness of procurement strategies and ensuring accountability (Forslund, 2021).
By addressing these gaps, the study aims to contribute valuable insights specific to the Nigerian public sector, informing policies and practices that enhance the efficiency and effectiveness of procurement processes within government agencies.
Objectives
The primary objective of this research is to investigate the relationship between Supplier Relationship Management strategies and procurement performance in Nigerian government agencies. To achieve this overarching goal, the following specific objectives guided the study:
- Examine the current Supplier Relationship Management practices employed by Nigerian government agencies.
- Assess the impact of Supplier Relationship Management strategies on procurement performance.
- Identify the challenges faced by Nigerian government agencies in managing relationships with suppliers.
Hypotheses
To guide the empirical investigation, the following hypotheses were tested:
Null Hypotheses(H0):
- There is no positive correlation between the implementation of effective Supplier Relationship Management strategies and improved procurement performance in Nigerian government agencies.
- Inadequate communication and collaboration with suppliers do not negatively impact procurement performance in Nigerian government agencies.
- A well-defined and structured Supplier Relationship Management framework does not contribute to the reduction of procurement costs in Nigerian government agencies.
Alternative Hypotheses(H1):
- There is a positive correlation between the implementation of effective Supplier Relationship Management strategies and improved procurement performance in Nigerian government agencies.
- Inadequate communication and collaboration with suppliers negatively impact procurement performance in Nigerian government agencies.
- A well-defined and structured Supplier Relationship Management framework contributes to the reduction of procurement costs in Nigerian government agencies.
Justification of the Study
This research holds considerable significance across multiple dimensions. Firstly, it makes a valuable contribution to the academic discourse on procurement and supplier management, offering a nuanced understanding of the specific challenges encountered by Nigerian government agencies. Through the identification of gaps in existing practices, the study serves as a foundational step towards shaping future research endeavours. The intention is to inspire a more comprehensive exploration of Supplier Relationship Management (SRM) strategies, not only within the Nigerian context but also in other developing economies facing similar procurement challenges. This scholarly contribution aims to enrich the existing literature and pave the way for a more informed and contextualized approach to SRM in diverse settings.
Secondly, the practical implications of the research findings are substantial, reaching beyond academia to impact policymakers, procurement professionals, and government officials involved in decision-making processes. The insights derived from this study into effective SRM strategies hold the potential to guide the formulation and implementation of policies aimed at optimizing procurement performance. By providing a practical framework, the research contributes to the development of strategies that promote transparency, streamline processes, and ultimately result in cost savings in public expenditures. Policymakers and professionals involved in public procurement can leverage these insights to enhance the effectiveness and efficiency of their operations.
Moreover, the timeliness of this study aligns with the contemporary emphasis on good governance, accountability, and transparency in the public sector. As global expectations for responsible and transparent governance rise, a well-managed procurement system emerges as a linchpin for achieving these objectives. The study recognizes the interconnectedness of effective SRM with overall government efficiency, emphasizing how a streamlined procurement process can foster public trust in the allocation and utilization of public resources. In an era where citizens demand accountability from their governments, the research underscores the pivotal role of a well-functioning procurement system in meeting these expectations.
In essence, this research contributes not only to academic knowledge but also offers actionable insights for real-world applications. By addressing the specific challenges faced by Nigerian government agencies, the study provides a foundation for refining SRM strategies, which can be adapted and implemented in other developing economies. The practical implications extend to those directly involved in procurement decision-making, guiding them towards strategies that optimize performance, ensure transparency, and contribute to responsible resource allocation. Furthermore, the study aligns with contemporary ideals of good governance, highlighting the instrumental role of efficient procurement systems in building public trust and meeting the demands for accountability in the public sector. As a result, this research stands as a timely and impactful endeavour with implications for both scholarly pursuits and practical advancements in procurement practices within government agencies.
Scope of the Study
The scope of this study encompasses Nigerian government agencies involved in procurement activities. The focus will be on understanding the current Supplier Relationship Management practices employed by these agencies and their impact on procurement performance. The study considered various types of government procurements, including the acquisition of goods, services, and works.
Geographically, the study will cover different regions of Nigeria to ensure a representative sample of government agencies. The research will utilize a combination of qualitative and quantitative methods, including surveys, interviews, and document analysis, to gather comprehensive data.
References
- Cropanzo, R., & Mitchell, M. (2021). Social Exchange Theory: An Interdisciplinary Review. Journal of Management, 874-900.
- Easterby-Smith, M., Thorpe, R., & Jackson, P. R. (2018). Management and Business Research. Sage.
- Eisenhardt, K. M. (2015). Building Theories From Case Study Research. Academy of Management Review, 14(4), 532-550.
- Emmerson, R. (2018). Social Exchange Theory. Annual Review of Sociology, 335-362.
- Forkmann, S., Henneberg, S. C., Naude, P., & Mitrega, M. (2016). Supplier relationship management capability: a qualification and extension. Industrial Marketing Management, 57, 185-200.
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