Effect of Procurement Planning on Organizational Performance in the Case of Ethiopian Grade One Building Contractors (BC1)

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Addis Ababa University


Procurement planning is one key functions of procurement. It has a huge potential to untapped strategic importance of procurement function to the organizational performance. At the same time, procurement planning is the most neglected area of procurement activity. The study was carried out to investigate the effect of procurement planning on the organizational performance of BC1 contractors in Ethiopia. In order to analysis the effect of planning on performance five predictor variables of procurement planning identified, these are completeness of procurement planning, time horizon for procurement planning, efficiency of procurement planning, flexibility of procurement planning and commitment of procurement planning. Both descriptive research, causal research design were used. Data were collected from respondents through questionnaire and analyzed using descriptive and inferential statistics with the help of SPSS software.In addition, close-ended questions were administered to collect data from respondents. Accordingly, questionnaires were distributed to respondents from the target population; and the responses were 83%. According to the findings, out of the five independent variables three, time horizon of procurement panning, efficiency of procurement planning and commitment of procurement panning have significant effect on the organizational performance of BC1 contractors. Moreover, more than 70% of the respondents have strongly agreed that procurement planning affects BC1 contractors organizational performance in large extent. Further, it was identified that most BC1 contractors have no organized procurement department and formally prepared procurement manual when requested for review. Hence, the study recommended that BC1 contractors should increase execution commitment of in procurement planning, develop effective procurement time horizon at least for 1 year and adopting efficient procurement planning system



Procurement, performance, organizational performance