The Challenges of Global Sourcing Practices in Relation to Procurement Performance: The Case of Ethio telecom

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Addis Ababa University


The main purpose of this study was to assess the challenges of global sourcing practices and to evaluate their impact on procurement performance of ethio telecom. The study used both primary and secondary data sources. Primary data was collected through close and open ended questionnaires and semi-structured interviews. Questionnaires were distributed for purposefully selected 50 respondents from ethio telecom’s supply chain division. Interviews were conducted with 5 middle level managers and supervisors who participated directly or indirectly in the global sourcing practices of the company. Data was analyzed through descriptive statistical methods such as percentages, frequencies, mean and standard deviation. Inferential analyses were also used in relation to bivariate correlation and linear regression to show the relationships of variables. Major findings of the study indicated that foreign currency shortage and fluctuation, incomplete and unplanned purchase requests, delay of letter of credit at bank, delay in delivery from supplier, limited logistical facilities, and high customs tariff were the main challenges that seriously impacted the global sourcing practices and procurement performance of the company. Study findings also showed that challenges of global sourcing had negative and significant effect on procurement performance. Finally, from the above findings the study concluded that the global sourcing practices and procurement performance of ethio telecom have been impacted by several challenges of global sourcing practices with predictive ability of 18.2 percent variation on procurement performance (R squared =0.182). Thus, to solve these challenges, the study recommended the company to find immediate solutions for the above mentioned challenges in cooperation with concerned stakeholders through creating awareness and also through engaging in SLA & OLA with end users, suppliers and all other stakeholders.



Global Sourcing, Challenges of Global Sourcing, Procurement Performance