CHAPTER TWO

LITERATURE REVIEW

2.0 Chapter Introduction

This chapter examines the current literature in order to comprehend the function of the role of
procurement procedures in achieving business goals. It includes explanations of words as well as
an assessment of some of the supporting viewpoints in order to place the work in the right
abstract factor. In addition, actual studies related to the current topic were evaluated to aid in the
identification of the research space. Finally, the chapter goes through the study's representational
structure.

2.1 Concept of Procurement

In the literature of the following articles (Dasari & Subrahmanyam, 2019; Kakwezi & Nyeko,
2019; Larbi et.al., 2019; Schapper et.al., 2017), procurement is centered on systematic processes
which involves identification and obtaining of goods and services. This is due to the numerous
varied definitions offered by various scholars, academics, and organizations based on their
individual points of view. As a result, there appears to be no actual agreement in the literature on
the definition of procurement. The numerous terms associated with buying, purchasing, sourcing,
and supply chain, strategic sourcing, and commissioning, to name a few, are a good illustration.
While Flammer, (2018) defines procurement as the acquisition of high-quality goods and
services at a cost-effective rate, others define procurement as the process of evaluating products
at a cheap cost (Adu-Fosu, 2016; Buor,2019; Larbi et. al.,2019; Schapper et.al.,2017). Taking a
close look at the aforementioned procurement explanations, one would conclude that
procurement and purchase are the same thing. Although many people confuse the terms purchase
and procurement and believe they mean the same thing, the two are distinct and have separate
meanings. To begin with, procurement entails the selection of vendors, the establishment of
payment terms, strategic vetting and selection, contract negotiation, and the actual purchase of
goods. According to the preceding, procurement is essentially a catch-all term for purchase.
Whether purchasing is a subset of procurement is a point of contention.
In reality, Dasari and Subrahmanyam (2019) believe that procurement is distinct from
purchasing since procurement is a broad function that encompasses all activities and procedures
related to the acquisition of products and services (purchasing). As a result, the two concepts are
fundamentally distinct. Purchasing is a part of procurement that deals with the receiving of goods
and services, whereas procurement agreements pledges are broad and include the process of
producing necessary requirements, sourcing activities, assume market research, estimating
suppliers, negotiating, and contract management. This explains why it is disputed that
procurement processes move in several directions, such as the requirement to properly identify
the desired goods or services, the process of selecting suppliers, the act of replacing orders, and
the evaluation of the entire procurement process (Ibrahim et.al.,2017; Kakwezi & Nyeko,2019;
Morledge & Smith,2013; Rasheed,2019; Thai,2017; Wang et.al.,2019).

According to Thai (2017), procurement includes the practices and methods of vendor selection,
establishing amount conditions, planned survey research and selection, contact arbitration, and
actual goods acquisition. Procurement is also defined by the Business Dictionary as "the wide
task of the procedure required to buy products and services" (Business Dictionary, 2011). As a
result, procurement is the acquisition (procurement) of commodities, work, and services that are
critical to the organization's success. Procurement is a critical job and a major cost center inside
the organization that manages the purchase of all goods as well as the exchange of materials for
financial resources processing. In this light, procurement is defined as a process that leads to the
achievement of organizational objectives (Buor, 2019; Dasari & Subrahmanyam, 2019;
Flammer,2018).

Furthermore, procurement is the process of locating, obtaining, and purchasing relevant goods,
services, or employment from outside sources at the lowest feasible cost in order to meet the
needs of acquirers in terms of quality, quantity, time, and location (Ibrahim et.al., 2017).
Furthermore, the Chartered Institute of Procurement and Supply (2013) defines procurement as
the corporate management function in charge of identifying, procuring, and managing the
external resources that an organization needs to meet its strategic objectives.
2.2. Functions of the Procurement practices

The function of the procurement practices is prefaced on 4 key principles which are; Fair
completion, Integrity, Transportation and Non-discrimination in procurement.

When looking at procurement processes from a historical perspective, it appears that there is
some amount of enhanced consistency in procurement practices, particularly in the operations of
public sector companies. Private sector organizations, on the other hand, do not expect to follow
the provision of the public procurement Act in their daily operations. Procurement activities in
Ghana's private sector are less well-known, as is the case with Mckeown Catering Services.

As a result, the purpose of this research is to look into Mckeown Catering Service' procurement
actions and how they affect the company's success. Procurement's main goal is to ensure that
goods and services are delivered in a methodical, cost-effective, and value-for-money way. Its
purpose is to ensure that resources are used efficiently, transparently, and fairly (Majtan,2013).

2.2.1 Types of Procurement

There are other types of procurement, but the literature identifies six (6) significant ones: single,
stock, vendor managed inventory, just in time, just in sequence, and ship to line procurement
(Grandia, & Voncken,2019; Gruneberg & Hughes,2004; Heiserich et.al., 2011). To begin with,
single procurement is a sort of procurement where by unique clients place orders for specific
operations in a supplier's production process.

Second, when products are restored based on a threshold level, stock procurement happens.
When a designated lowest level of stock is achieved, the Organization will procure. The stock
procurement type is seen to be crucial in assisting the organization in meeting expected client
requests. However, it is thought to be pricey (Grandia,& Voncken . 2019; Gruneberg & Hughes,
2004; Heiserich et.al.,2011).

Finally, vendor managed inventory (VMI) is a type of procurement method where by the vendor
oversees the entire procurement process. VIM is beneficial because it establishes a framework
for a more developed production process, fewer costs, and more openness (Arnold,2009). In
addition, just-in-time procurement is focused on supplying goods while stock levels are low.
This procurement style is advantageous since it lowers costs and ensures a more balanced
approach. Furthermore, just in sequence procurement is also based on delivery of essential
commodities to a corporation in a certain order at a given time. Finally, ship to line procurement
is the type of procurement in which products and services are dispatched from the supplier to the
client with fewer logistical steps (Grandia, & Voncken, 2019; Gruneberg & Hughes, 2004;
Heiserich et al., 2011). Other researchers, on the other side, have recognized two types of
procurement activities: direct and indirect procurement. Direct procurement focuses on
procurement actions that directly affect an organization's production process, whereas indirect
procurement focuses on an organization's operating resources (Caswell & Davies, 2009; Lewis &
Roehrich 2009).

2.2.2 Categories of Procurement

According to the literature, procurement activities can be divided into two categories: direct
expenditure or production-related procurement and indirect spend or non-production-related
procurement. The term "direct expenditure" refers to procurement activities linked with
production-related tasks, such as raw materials, components, and parts. It is proposed that the
direct spend procurement activity focuses mostly on supply chain management activities, which
universally have a direct impact on manufacturing enterprises' production processes. Indirect
procurement activities, on the other hand, are primarily focused with the acquisition of resources
that enable organizations to run efficiently. Indirect procurement effectively entails the
acquisition of a wide range of goods and services, such as heavy equipment, consumables,
consulting, and other services that have the ability to supplement an organization's operations
(Grandia & Voncken, 2019; Gruneberg & Hughes, 2004; Heiserich et al., 2011).

2.3 Procurement Process

The procurement cycle demonstrates the steps involved in a typical procurement. It is the point at
which an organization recognizes the need for products, services, and labor. Once the need has
been recognized, the organization may need to consult with a wide number of stakeholders to
clearly describe the risks and breadth of the requirements. Equipment, components, finished
goods, raw materials, and consulting services, among other things, may be required.
The major goal of this stage of the procurement process is to accept the entire business demand
and to gain full support from all stakeholders involved. (Adu-Fosu, 2016; Bienhaus & Haddud,
2018; Glas, 2018; Thai, 2017; Wang et al., 2019) The next step in the procurement process is to
publicize the need for prospective suppliers to submit quotations.

To ensure that the promotion stage is implemented effectively, it is recommended that the
organization accepts the idea of team formation and market research with the goal of clearly
defining the target, objective, or purpose of the requirement (Adu-Fosu,2016; Bienhaus &
Haddud,2018; Glas,2018; Thai,2017; Wang et.al.,2019). The media and the internet can be
utilized to advertise the demand in a variety of ways. Depending on the relevance and extent of
the request, the tender could be open to all potential suppliers or restricted to a few. The primary
goal of stage two of the procurement process is to promote competitive bidding, assert value for
the money, and plan the full purchase.

The expression of interest stage of the third stage of the procurement process. This stage allows
all possible bidders to express their interest in participating in the procurement process based on
the established specifications. The stage permits all suppliers, vendors, or contractors capable of
delivering the interest to come up with a shortlist of prospective suppliers or vendors capable of
delivering the interest (Adu-Fosu,2016; Bienhaus&Haddud,2018; Glas,2018; Thai,2017; Wang
et.al.,2019).

In the fourth stage, all potential bidders must submit all required supporting documents to the
tendering entity for inspection and verification. In most situations, submitted documents are
evaluated against a set of criteria, which may include environmental, sustainability, ethical, and
demographic concerns. The review and selection of tenders is the next step in the process. The
bidders are evaluated, screened, rated, and pre-qualified here. The selection is mostly based on
cost, efficiency, and effectiveness. The stage's outcome is to notify the pre-qualified tenderer
who best meets the user's demands and requirement based on factors such as price, quality,
service and delivery (Adu-Fosu,2016; Bienhaus & Haddud,2018; Glas,2018;Thai,2017; Wang
et.al.,2019 ).

Contract awarding and negotiation is the next quadrant of the steps. This is where the contract is
awarded to the most cost-effective tenderer. Negotiation is an important aspect of this step. This
is when the purchasing entity and the tenderer debate the costs, risks, and other factors that are
relevant to the requirement.

The contract implementation stage and contract management are the final two steps of the
procurement process. During the contract implementation stage, the purchasing entity attempts to
monitor the tenderer's performance on a regular basis to ensure compliance.

To get the most value for money invested, the buying firm and the supplying company must have
a mutually beneficial partnership. Regular follow-up by the purchasing organization will enable
the supplier to be notified if they are deviating from the specifications.

2.3.1 Improving Procurement Processes

It is proposed that organizations should organize and implement effective procurement

processes in order to increase their efficiency, output, and bottom line. In a time where
information technology skills are constantly improving, one area where organizations can
improve procurement procedures is through the use of e-procurement solutions. This capability
could aid organizations in streamlining their procurement processes, maintaining a centralized
list of preferred and approved vendors, raising, sending, and tracking purchase orders
electronically, completing 3-way matching quickly, avoiding spending budget overruns,
implementing effective, transparent procurement and purchasing protocols, eliminating
paperwork, and maintaining adequate transaction records.

2.4 Procurement Cycle in Organizations

This capability could aid organizations in streamlining their procurement processes, maintaining
a centralized list of preferred and approved vendors, raising, sending, and tracking purchase
orders electronically, completing 3-way matching quickly, avoiding spending budget overruns,
implementing effective, transparent procurement and purchasing protocols, eliminating
paperwork, and maintaining adequate transaction records (Wang et.al.,2019).
2.4.1 Planning of procurement in an organization

Planning is the first step in a successful procurement process (Adu-Fosu,2016; Bienhaus &
Haddud,2018; Glas,2018; Lynch,2012; Thai,2017; Wang et.al.,2019). It is believed that because
procurement is the process through which organizations select what, when, how, and where to
buy, planning is essential for it to be successful. Organizations can use procurement planning to
define the specific things that are necessary, when they are required, how they should be
obtained, and where they should be purchased from at any particular time.

Effective procurement planning, it is said, is crucial since it allows organizations to save time,
money, and ensure efficient resource utilization. It also guarantees that regulatory policies are
followed and gives a framework for the procurement process to follow. Furthermore, with the
use of procurement strategy for procuring each requirement, good procurement planning serves
as a route to accomplishing Organizational objectives and helps procurement planners to control
how practical procurement expectations are.

2.4.2 Procurement sourcing in an organization

Procurement sourcing is the second stage of the procurement cycle, and it involves determining
how and where items and services are procured. The step of the procurement cycle where
organizations try to discover suppliers of goods and services is known as sourcing. According to
Wallace and Xia (2014), sourcing is a procurement technique in which the Organization's
business needs are matched with the supplier market. Sourcing should be based on a thorough
understanding of both the organization and the supplier market, as well as their spending
patterns, in order to be effective. Identification and pre-qualification of prospective suppliers,
preparation and distribution of tender documents, requests for quotations or proposals, evaluation
and selection of successful tenderer(Adu-Fosu,2016; Glas,2018; Ibrahim et al., 2017; Ohene-
Addae,2012; Thai, processes enable organizations to get the best out of suppliers and to
promulgate best practices (Adu-Fosu,2016; Glas,2018; Ibrahim et al., 2017; Ohene-Adda (Adu-
Fosu,2016; Glas,2018; Ibrahim et. al., 2017; Ohene-Addae,2012; Thai,2017; Wang et. al., 2019).

2.4.3 Contracting and contract management

The procurement cycle's next two steps are contracting and contract management. On the one
hand, contracting guarantees that the buying Organization and the provider form a law
enforcement agreement. Its purpose is to ensure that both parties can negotiate in their best
interests, ensuring that the purchasing organization gets a fair and acceptable price for the quality
offered, and encouraging the supplier to completely comply with the contract terms as defined
contract management, on the other side, is the process of ensuring that both parties to a contract
keep their promises and achieve the contract's objectives (Adu-Fosu,2016; Bienhaus &
Haddud,2018;).

2.4.4 Storage, distribution, disposal and evaluation

The purchasing cycle continues with the phases of storage, distribution, disposal, and evaluation.
It is advised that, once the supplier has delivered the items in accordance with the contract terms,
the purchasing organization guarantees that the goods purchased, especially those that are easily
damaged, are adequately preserved to avoid damages or losses. The processing of goods and the
control of stock levels are the two main activities in storage. The cycle's distribution stage
ensures that things are made available to end-users on demand and in a timely and accurate way
(Adu-Fosu,2016; Glas,2018; Ibrahim et. al., 2017; Ohene-Addae,2012; Thai,2017; Wang et. al.,
2019). Finally, evaluation is a means of determining whether or not the procurement cycle is
viable. It ensures that pertinent lessons can be learned in the future to improve procurement
processes.

2.5 Procurement Policy

Procurement policies are a lay down rules, protocols, and regulations guiding an organization's
procurement operations. Procurement policies that control the acquisition of vital products and
services are supported for all organizations, corporate, public, and civil society. It's possible that
various organizations have distinct procurement policies. According to the research, the size of
the organization, the availability of suppliers, and the cash inflow requirements are some of the
elements that may be significant and necessary in creating procurement policies (Adu-
Fosu,2016; Glas,2018; Ibrahim et. al., 2017; Ohene-Addae,2012; Thai,2017; Wang et. al., 2019).

2.5.1 Procurement tools

Turner (2011) listed five significant methodologies as critical for an excellent and successful
procurement: Price analysis, total cost analysis, total cost of ownership analysis, end-of-life cost
analysis, and financial analysis. Price analysis is the process of comparing pricing between
providers and external benchmarks. It allows companies to compare their chosen suppliers'
performance to that of best-in-class industry players in order to discover areas for improvement.
The total cost analysis tool allows businesses to evaluate the total cost of obtaining goods,
services, or works, including transportation, tariffs, import barriers, packaging, storage, and the
quality control procurement process. The next technique is total cost of ownership analysis,
which considers an object's overall cost value across its useful economic life. The charge of
control study involve two costs: the purchase price and the acquisition cost. After that, there will
be a cost study of the end-of-life options. It considers the costs incurred when a product has
reached the end of its useful life and must be disposed. The financial analysis looks into the
financial competence and expertise of the supplier. It can be done by reviewing the balance
sheet, which depicts the entry and exit of cash, as well as previous budgetary report and the
fourth-juncture strategy. Finally, the technical analysis looks at the physical attributes of the item
or service in order to increase dependability, lead time, and meet basic organization needs.

2.5.2 Procurement management

Procurement management is a vital strategic activity that ensures that businesses have enough
materials and services on hand at all times to run smoothly and efficiently (Bolton,2014).
Procurement management, according to Hardcastle (2007), involves a variety of interrelated
procedures such as purchase or acquisition planning, contracting planning, seller response
request, seller selection, contract administration, and contract closing. Similarly, procurement
management demands amicable relationships among all actors involved in the procurement
process, which includes both suppliers and purchasers (Dixit, 2004). Procurement management is
believed to encompass law, finance, accounting, risk management, and politics (Tookey et al.,
2001). Effective procurement management, it is said, can help companies improve their
performance (Azeem,2007) As a result, good procurement management supports companies in
their value-adding and networking efforts, providing them a leg up on their competitors.

2.5.3 Procurement evaluation in an organization

After a supplier has performed a service or delivered a product, the buying organization must
assess the supplier's performance in order to assess operational effectiveness and determine
whether the process' value for money was accomplished. Procurement evaluation is simply a
control activity that compares planned operations to actual activities in order to discover
discrepancies and initiate corrective action. As a result, if a supplier's performance is deemed to
be unsatisfactory, the purchasing organization must determine the root of the problem and design
appropriate ways to address it. Procurement review is necessary to ensure that procurement
processes contribute to the strategic goal of boosting organizational productivity and profitability
(Adu-Fosu,2016; Glas,2018; Ibrahim et. al., 2017; Ohene-Addae,2012; Thai,2017; Wang et. al.,
2019).

2.6 Importance of Procurement

Procurement is relevant cost center that contributes to the organization's strategic goals by
providing a variety of services (Turner,2011). Seven core procurement benefits are listed by the
Charted Institute of Purchasing and Supply, including the ability to:

 Supply assurance in terms of raw materials and finished goods

 less production costs
 minimize risk
 improve product quality
 enhance value addition
 increase efficiency
 improve innovation (CIPS, 2013).

If the appropriate procurement strategy is used, according to Moreledge and Smith (2013), good
procurement processes have the potential to cut project capital costs by an average of 5%. It is
stated that procurement can assist firms in achieving a better profit margin and advantage over
their rivals by handling the ordering, receipt, reviews, and approval of commodities received
from suppliers (CIPS 2013; Turner 2011). Procurement, as a business function, is said to have
the power to influence corporate profitability in a variety of ways, particularly when it operates
at a strategic level inside a company.

This is why, according to Dasari & Subrahmanyam (2019), no business can operate effectively
without efficient procurement. Procurement is critical in the operations of an organization
because it is responsible for purchasing specific resources from the external part of the business
that are required by internal operations. It enables businesses to manage resources and suppliers
more effectively and competitively. As a result of its ability to search, line up, and attend internal
requirements to external resources in order to meet Organization aims, procurement assists
organizations in gaining a competitive advantage in volatile marketplaces. (Wang et al., 2019;
Thai, 2017). Procurement is important in today's dynamic and competitive business world since
it assists businesses in gaining and maintaining a competitive advantage. Procurement is in
charge of procuring the proper number and quality of supplies at the right time in order to keep
the firm running (Rasheed,2019; Schapper et.al.,2017).

Procurement, for example, is viewed as a strategic activity in the private sector that collaborates
with other departments to increase organizational profitability. Procurement is considered as
assisting in the streamlining of operations, the reduction of raw material prices and costs, and the
identification of better supply sources. Procurement, in general, aids private organizations in
improving their performance. Furthermore, while profit maximization is not the primary goal of
public sector organizations, procurement invariably aids them in efficiently utilizing resources
and maximizing output for the benefit of the general public. As a result, it's no surprise that many
governments throughout the world have enacted procurement legislation to guide their
procurement operations and promote openness, transparency, and non-discriminatory practices.

This may explain why many procurement laws include clearly defined procurement requirements
for products, services, and works that surpass a certain value threshold set forth in the
regulations. These items are advertised and tendered in line with published criteria. Indeed, it is
argued that public procurement is critical because it ensures the timely and cost-effective award
of contracts to qualified contractors, suppliers, and service providers for the provision of goods,
work, and services to support government and public-sector operations, in accordance with the
principles and procedures established in public procurement acts. Procurement is vital since it
allows businesses to keep tabs on their expenditures and operating costs. According to data,
organizations spend more than two-thirds of their income on procurement, so even tiny cost
savings can have a significant impact. Procurement efficiency has the ability to reduce
corruption. It is estimated that corruption adds roughly 25% to the cost of procurement contracts,
especially in poor nations, and can account for up to 10% of global corporate expenditures in
some situations. (Adu-Fosu,2016; Glas,2018; Ibrahim et. al., 2017; Ohene-Addae,2012;
Thai,2017; Wang et. al., 2019).

As a result, effective procurement has the ability to reduce an organization's overall operational
expenditures. Furthermore, effective procurement practices aid in the protection of an
organization's brand and image by assisting in the prevention of reputational damage, the
elimination of corruption, and the correction of unethical practices.

2.7 Procurement Performance Indicators

Time, prices, quality, reliability, and technology are the five primary performance characteristics
of procurement processes identified by Turner (2011). The cost performance indicator assesses a
procurement process' capacity to deliver goods, works, and services at a reasonable cost. The
time indicator, once again, refers to the procurement process' lead time, or the time between
placing orders and receiving them. In addition, the quality indicator evaluates how well the
procurement process meets customer needs and is suitable for purpose. In addition, the
technological size considers how well technological innovations are incorporated into
procurement processes.

2.8 Performance and Performance Measurement

General, performance is the process of accomplishing a goal, task, or function. It's the process of
comparing an activity, a process, or a system's efficiency, effectiveness, and capability to a set of
goals. Cooper, Ezzamel, and Qu, 2017; Kaplan & Norton, 2006; Kaplan, Norton, & Rugelsjoen,
2010; Keyes,2016;Niven,2002; Quesado, Aibar, & Lima, 2018). As a result, performance
measurement in organizations is the process through which companies determine whether or not
their objectives have been met. As a result, the agent's stewardship is primarily responsible for
organizational performance measurements. It's important to remember that, in most
circumstances, firm ownership is outside the managers' control. This is due to the fact that, while
shareholders typically own private sector enterprises, they rarely manage them.

As a result, most firms are controlled by managers who have little to no ownership involvement.
Similarly, public sector organizations are owned by the government but managed by persons
who are not direct proprietors. The structure has helped to strengthen the principal-agent (owner-
manager) relationship by requiring agents or managers to report on the efficient use of the
principal's resources. This is where performance evaluations come into play. Performance
measurement is the practice of comparing the efficiency, effectiveness, and capability of an
action, process, or system to a set of norms or targets (Kaplan, Norton, & Rugelsjoen 2010;
Keyes,2016). It is suggested that an organization's ability to effectively monitor its performance
is crucial to its survival and long-term viability. As a result, a number of performance
management indicators have been proposed.

2.9 Challenges of Procurement Practices in MCKEOWN CATERING SERVICES

Ghana's procurement procedures are plagued with problems (Anane, & Kwarteng 2019;
Asante,2017; Boatemaa-Yeboah & Tamakloe,2019). Poor planning, accountability, frauds,
dishonesty, improper monitoring and assessment, unethical conduct, and too much
decentralization of the procurement system are just a few of the difficulties cited.

2.9.1 Lack of proper knowledge, skills and capacity

Inadequate professional capability is a major issue with Ghana's procurement operations. It has
been discovered that there are currently insufficient procurement professionals with the
necessary knowledge and abilities to effectively deliver procurements. The situation has been
made worse by the GoG's decentralization strategy, which mandates that all 275 districts have
competent procurement workers. Despite the fact that there are already a large number of
procurement graduates, the majority of them lack the necessary abilities to effectively manage
procurement operations. As a result, procurement efforts inside district assemblies are
occasionally handled by substandard individuals who lack the necessary knowledge, skills, and
aptitude to perform traditional value for money procurement processes (Hardcastle,2007).

2.9.2 Non-compliances with policies and regulations

Another problem is actors' non-compliance with procurement practices. The current system in
Ghana is that political appointees govern many public sector institutions, including district
assemblies. This administration's appointees conspire with appointed district chief executives to
implement most procurement projects in their favor (Anane, & Kwarteng2019; Asante,2017;
Boatemaa-Yeboah & Tamakloe,2019). Many press reports provide evidence of the large
number of documents that were produced in clear violation of procurement norms and
regulations. As a result, harsher penalties are needed to penalize government officials who assist
politicians and their friends in circumventing procurement norms and procedures.

2.9.3 Inadequate planning

Another issue with procurement is a lack of planning. The importance of planning in all aspects
of life cannot be overstated, and it is unfortunate to notice that most procurement functions
within Ghana's public sector are carried out with insufficient planning. As a result, suitable
preparations are rarely provided for evaluating the capability and competencies of suppliers prior
to contract granting.

2.9.4 Inadequate Measures for Monitoring and Evaluating

According to Hunja (2003), in order for a procurement process to be sound and effective, it must
have strong structures in place to support effective monitoring and evaluation (M&E) of the
various stages of the procurement management process. Azeem (2007) will command the
illusion of an effective M&E throughout the procurement processes, namely from the requisition
stage through the pre-bidding stage to the opening of bid documents, contract award, contractor
mobilization, and the like, all of which require monitoring to minimize nepotism, improve
fairness, and ensure target levels are met. Unfortunately, most public projects lack the necessary
M&E framework, resulting in major compromises in the public sector's procurement
management services.

2.9.5 Accountability fraud and corruption

According to Hawking and Stein (2004), another flaw in public procurement management
practices is accountability, fraud, and corruption. According to Matthew (2006)'s interview, the
situation is significant, particularly in some developing economies where, due to poor income
and numerical levels, some procurement officials cut corners to boost their pay packages. The
lack of an M&E framework encourages such unethical behavior, resulting in a significant
compromise on the value for money premise. There is evidence that there is a high rate of over
voicing in many public procurement attempts. It's been reported that some accounting and
procurement professionals collude with vendors to take advantage of the company. In certain
cases, geese supplies are not even paid for. It also occurs in some procurement exercises, where
stock is siphoned off for sale. Some vendors were able to persuade officials to discreetly leak
competitor quotations, allowing them to quote lower prices in order to secure contracts. Some
dishonest officials smuggle late submissions for personal advantage. All of this will wreak havoc
on procurement management processes in a variety of government agencies.

2.9.6 Unethical behavior

Unethical behavior is another setback for procurement management techniques in public

organizations. Serving procurement officers, according to Hardcastle (2007), neglect
professionalism and collude with suppliers to win contracts at all costs. High-ranking officials
have been accused of twisting procurement authorities' arms in order to ensure that their
preferred candidates receive bid contracts.

It is also a typical unethical practice for some procurement officials to reveal information about
bid quotations to their preferred vendors in order to assist them in quoting more favorable prices
and thereby winning the contract. Procurement officials' judgment is often clouded by their drive
to earn cash, compromising professional ethics.
2.9.7 Too much decentralization of the procurement system

Procurement, like other value chain management tasks, necessitates professional expertise and
should only be handled by qualified individuals. Unfortunately, with decentralized firms
managing their own procurement activities, there are too many unskilled hands executing
procurement responsibilities, resulting in procurement administration that is mediocre at best.
Ghana, for example, has a National Procurement Agency; sadly, its functions have been
restricted to importing rice and salad oil for public sale. Over-decentralization of the
procurement system has undoubtedly imported a slew of criminals and miscreants into the
system, jeopardizing procurement management's value-for-money component. (Cooper,
Ezzamel, & Qu,2017; Kaplan & Norton,2006; Kaplan, Norton, & Rugelsjoen 2010; Keyes,2016;
Niven,2002; Quesado, Aibar, & Lima 2018).

2.10 Public sector and private sector procurement compared

Procurement in the commercial and governmental sectors is nearly identical. They are both the
means of procuring products and services to meet a specific entity's demands. While
procurement of goods and services for public sector organizations is focused on serving the
public, procurement for private sector organizations is focused on a private enterprise. However,
there are a few key differences between the two. The issue of ownership is one of the most
important distinctions. The government owns or controls the public sector, and individuals own
or control the private sector. The procurement processes of private and public sector firms differ
in several respects as a result of these ownership distinctions. One example is the level of
transparency required. Because public sector organizations are supervised by a higher level of
government, everything they do, including procurement activities, is and must be visible to the
general public. A separate audit trail, as well as clear and accessible information, are required.
Contract opportunity, contract award, pricing, and timing are all included in the reports, which
are generated at regular intervals. Any entity seeking to do business with the government and
meeting the standards must be given an equal chance. As a result, bid openings are open to the
public.
Because public institutions are controlled by governments and are primarily funded by tax
income, fines, and tariffs, among other sources, the underlying concern is resource allocation in
the public interest that maximizes value for money. This means government agencies have less
overall influence over the procurement process. They must wait for the funding institution to
collect the required revenue and disburse it properly before engaging in procurement activity.

The Institution may need to postpone payment or adjust its procurement policies if payment
delays are the result of greater background checks on potential suppliers, tighter contract
negotiating tactics, and other investigations and research. Furthermore, Public Organizations
may fall under numerous jurisdictions, requiring multiple government bodies to approve their
procurement methods (e.g. city and state, state and federal, etc.).

As a result, there may be few ways to save time in the public domain. Furthermore, public bodies
are allowed to hire "preferred suppliers," or vendors with a good reputation with the government.
On the surface, these vendors appear to be more expensive, yet they save time during the
investigation phase of the procurement process. The higher cost of the Vendor might be offset by
saving time and money on background checks and other stages. On the other hand, the level of
transparency required by private sector organizations in their procurement activities is extremely
low and not readily apparent. While private enterprises must provide total transparency, they are
not compelled to provide equal chance to bidding suppliers and frequently withhold information
that is not required. They are not required to approach every company, nor are their contract wins
required to be published in the same year as those of public entities.

Private businesses produce revenue through sales, investments, and other business-related
activities. Their money are more centralized, which makes the purchasing process go faster.
Privately owned firms have more time and money to shop around for the best deal since they
have more time and money. They are more concerned with conserving money and doing tasks
quickly.

Preferred vendors will continue to be used by private organizations for the same reasons that
preferred suppliers are used by public organizations. While private organizations may not take
nearly as much time to research as public corporations, they do a thorough job of understanding
their surprise before signing a contract by conducting simple reference and credit checks, site
visits, and sample evaluations. You look to be preferred vendors, and renewing the contract is a
simple way to speed up the procurement process. Examples include supply chain management,
supplier relationship management, inventory management, supplier segmentation, and other
private-sector techniques. These methods help the private sector become more self-motivated,
but they also contribute to a volatile environment. There should be more race analysis because of
the high-risk, high-reward nature of private procurement processes. Public businesses may be
more secure and stable economically, but private firms often generate more growth than public
ones.

2.11 The balance scorecard model

Prior to the advent of the Balance Scorecard model, traditional measures of an organization's
performance were mostly focused on financial metrics. Organizational performance was
primarily analyzed and tracked using traditional financial accounting measures such as
profitability, liquidity, gearing, investors, and performance indicators throughout that time
period. Managers' performance was primarily determined by these financial measures (Cooper,
Ezzamel, & Qu,2017; Kaplan & Norton,2006; Kaplan, Norton, & Rugelsjoen 2010; Keyes,2016;
Niven,2002; Quesado, Aibar, & Lima 2018).

However, the only use of financial indicators has been criticized throughout time as being one of
the most significant, short-term in nature, discouraging long-term planning, and incompatible
with the dynamism of modern-day company reality. As a result, Kaplan and Norton devised a
more comprehensive, all-encompassing, and balanced performance measurement methodology.
The Balanced Scorecard Model is designed to take into account both the financial and the non-
financial factors.

The balanced scorecard is a strategic management tool that assists managers in translating
organizational strategy into operational goals and putting them into practice. The framework
examines the strategy from four angles: financial, customer, internal company process, and
learning and growth (Cooper, Ezzamel, & Qu,2017; Kaplan & Norton,2006; Kaplan, Norton, &
Rugelsjoen 2010; Keyes,2016; Niven,2002; Quesado, Aibar, & Lima 2018). It aids management
in clarifying strategy and ensuring that it is conveyed to all personnel in order to be implemented
effectively. Aside from being a strategy, the balance also functions as a vital organizational
performance management tool.

The BSC model promotes businesses to evaluate their performance from four different angles:
customer, financials, internal processes, and learning and growth. First and foremost, the
customer viewpoint is to assess an organization's relationship with its customers. Customers'
demands and expectations, such as time, quality, pricing, and service assessment for possible
improvement, were measured by the customers. Second, the internal business processes
perspective focuses on all of the organization's activities and procedures that are required to
deliver the intended value to consumers. Finally, the learning and growth (innovation)
perspective assesses employees' knowledge, skills, creativity, and ability to adapt to varied
environmental and technological changes and processes. Finally, the financial perspective
assesses an organization's financial stability (Cooper, Ezzamel, & Qu,2017; Kaplan &
Norton,2006; Kaplan, Norton, & Rugelsjoen 2010; Keyes,2016; Niven,2002; Quesado, Aibar, &
Lima 2018).

Organizational financial performance can be measured in a variety of ways, including using

absolute members, trend analysis, and ratio analysis. The financial perspective, in most
circumstances, measures profitability, liquidity, gearing, and investor indicators. The profitability
ratio is defined as a measure of a company's overall efficient and effective asset usage as well as
the level of control over its expenses in order to create and account for rates of return.Cooper,
Ezzamel, and Qu (2017); Kaplan & Norton (2006); Kaplan, Norton, & Rugelsjoen (2010); Keyes
(2016); Niven (2002); Quesado, Aibar, & Lima (2018). The liquidity indicators, once again,
evaluate an organization's ability to create liquid funds in order to meet its obligations when they
are due. The term "gearing" refers to the use of an owner's equity or capital to fund a company's
borrowing. The ability of an organization to make returns for its owners that are commensurate
with the risk is referred to as an investor indicator.

2.11.1 Perspectives of balance scorecard

As previously stated, the BS model has four viewpoints that can be utilized to measure
organizational performance holistically. Financial, customer, internal business operations, and
learning and growth are the four viewpoints.

2.11.1.1 The financial perspective

The financial viewpoint is concerned with an organization's financial performance.

Organizational revenue and profit targets, as well as budget and cost-cutting targets, are usually
discussed. It might be argued that an organization's financial health is an important metric for
managers to monitor. It's worth noting that strong financial performance is almost always the
result of strong performance in the other three scorecard dimensions. Indicators of profitability,
liquidity, risk, investor, and performance are all included in financial views (Cooper, Ezzamel, &
Qu,2017; Kaplan & Norton,2006; Kaplan, Norton, & Rugelsjoen 2010; Keyes,2016;
Niven,2002; Quesado, Aibar, & Lima 2018).

2.11.1.2 The customer perspective

Customers and the market are at the center of the customer perspective, which focuses on
performance targets. It usually includes client segments and service objectives, as well as market
share and branding goals. Customer happiness, service level, net promoter score, market shares,
and brand awareness are examples of typical metrics and key performance indicators (KPIs) in
this context (Cooper, Ezzamel, & Qu,2017; Kaplan & Norton,2006; Kaplan, Norton, &
Rugelsjoen 2010; Keyes,2016; Niven,2002; Quesado, Aibar, & Lima 2018).

2.11.1.3 Internal processes perspective

Internal process perspectives are concerned with internal operational goals and objectives as they
relate to the major processes required to meet customer goals. Organizations explain internal
business procedures in this section, which is important because the organization must function
effectively internally in order to push performance. Process improvements are a good example of
a measure and a key performance indicator. capacity utilization and quality improvement
(Cooper, Ezzamel, & Qu,2017; Kaplan & Norton,2006; Kaplan, Norton, & Rugelsjoen 2010;
Keyes,2016; Niven,2002; Quesado, Aibar, & Lima 2018).

2.14.10 The learning and growth perspective

The three aspects of the learning and growth method are human capital (skills, abilities, and
knowledge), information capital (databases, information systems, network and technology
infrastructure), and organizational capital (culture, leadership, employee alignment, teamwork
and knowledge management). Staff management, skills evaluation, performance management
scores, and company culture audits are examples of typical example measurements and key
performance indicators (Cooper, Ezzamel, & Qu,2017; Kaplan & Norton,2006; Kaplan, Norton,
& Rugelsjoen 2010; Keyes,2016; Niven,2002; Quesado, Aibar, & Lima 2018).

2.11.2 Benefits of Balance Scorecard

The balanced scorecard allows the board to analyze all aspects of the firm, both financial and
non-financial terms. Rather than focusing solely on the financial aspect, it considers how each
component influences the others. A balance scorecard, according to Cooper, Ezzamel, and Qu
(2017), encourages improved performance after it is implemented. Solid feedback improves
performance at all levels and across all organizational units, it is undeniable. Employees perform
better when they know how they are performing and where they can improve. He also mentioned
that using a balancing scorecard can help with organizational alignment. The balanced scorecard
allows a business to better match its organizational structure with its strategic goals.
Organizations must guarantee that business units and support functions are working toward the
same goal in order to execute a strategy effectively. (Cooper, Ezzamel, & Qu,2017; Kaplan &
Norton,2006; Kaplan, Norton, & Rugelsjoen 2010; Keyes,2016; Niven,2002; Quesado, Aibar, &
Lima 2018).

One of the advantages of using a balance Court card is that it helps to improve management
information. Management is encouraged to establish key performance indicators for their various
strategic objectives using the balanced scorecard approach. This guarantees that businesses are
measuring the right things. Companies that use the balanced scorecard test report improved
managerial information and more effective strategic decision-making.
2.11.3 Criticism of the Balance Scorecard

Although the balanced scorecard has numerous advantages, it is not without drawbacks or critics.
The over-reliance on measures is one of the accusations leveled against the balanced scorecard
Model. This is especially true when metrics are tied to employee performance and bonuses.
Bonuses for Citibank branch managers in California, for example, are linked to balanced
scorecard criteria.

Despite the fact that the company's manual clearly states that in the absence of an objective
indicator for people's performance, assessment and incentives will be based on the branch
manager's subjective judgment is superior, each division manager's effectiveness was rated as
"below par," "par," or "above par." Cooper, Ezzamel, and Qu (2017); Kaplan & Norton (2006);
Kaplan, Norton, & Rugelsjoen (2010); Keyes (2016); Niven (2002); Quesado, Aibar, & Lima
(2018).

According to Keyes (2016), such techniques should be avoided, citing a comparable balance
scorecard implementation at a financial institution where the branch manager's superior's
evaluation was handled through quarterly meetings where they merely sat and spoke for half an
hour. A branch manager who did teach and help his team members progress was given a “par”
rating because he failed to maintain talent in his team. The branch manager was angered by the
appraisal, as he couldn't understand how his performance could be classified as "average" when
he was aggressively grooming talent across the division. As a result of such measurement,
employee morale, happiness, and loyalty may decrease.

Furthermore, over-reliance on any type of measurement might suffocate the application of tacit
knowledge and insight. Management's use of tacit knowledge is constrained when measurements
are strictly regulated, as it must defend its decisions with numbers. These problems can be
avoided simply by not attempting to link performance to metrics and instead using metrics as a
guide rather than a shackle. On the other side, the issues with the balanced scorecard paradigm
are more serious. Another criticism of the balanced scorecard approach is its complexity, as well
as the time and money required to implement it in comparison to its "poor ease of use." The
complexity and difficulty arise from the selection of relevant measures. It may be argued that in
order for performance metrics to be effective, they must be compatible with the unit's actions as
well as the organization's short and long-term goals (Cooper, Ezzamel, & Qu,2017; Kaplan &
Norton,2006; Kaplan, Norton, & Rugelsjoen 2010; Keyes,2016; Niven,2002; Quesado, Aibar, &
Lima 2018). Finding metrics that are particular to the unit but general enough to reflect the
Organization's aim and that take into account both the long and short term looks to be unduly
optimistic. Consider the example of the branch manager who, despite losing talent on his team,
was developing human capital for other divisions and the organization as a whole. This could
explain why the balancing scorecard model's creators stress that the model should be used as a
guide rather than a full-fledged strategy.

2.12 Empirical Review

Glover (2014) used the MCKEOWN catering services as a study case for a study on procurement
management as a strategic tool for achieving organizational goals. The research looked at how
procurement management may be used as a strategic instrument for accomplishing corporate
objectives. The study also aimed to investigate the strategic procurement practices used by
organizations to achieve their organizational goals, investigate the effectiveness of the supply
base that enables them to achieve their organizational goals, determine the adequacy of human
capital used to drive their procurement functions towards meeting organizational goals, and
identify the constrasting factors. The researcher used purposive sampling or judgemental
procedures to obtain the necessary information from authorities and management members
whose primary responsibilities include carrying out various types of procurement activities.

The researcher used the questionnaire technique as a study tool, and Statistical Package for
Social Science(SPSS) was applied to evaluate information gathered in this field. The study found
that when procurement policies ensure that value for money is always attained in the
organization's procurement activities, procurement management can help the company achieve
its goals. The survey also stated that procurement can help companies gain a competitive
advantage by lowering transaction costs related with procuring products and services as well as
their prices.

According to the study, MCKEOWN catering services should continue to increase procurement
officials' and suppliers' capacity on the development of the Procurement Law in order to
strengthen their competence and capacities in carrying out their procurement tasks. In this way,
responsible procurement actions can be carried out, allowing organizations to use their
procurement function to meet business goals. Musau (2015) also performed research to evaluate
the factors that influence procurement functions and their impact on organizational success.
Respondents were given questionnaires and a case study research design was applied. The study
included 45 Moi Teaching and Referral Hospital workers (MTRH). Employees were first
assigned to their departments, from which they were picked at random. Data was coded, then
processed and displayed in a table with percentages and frequencies. The study found that 47
percent of employees referenced the type of management as the most determinant factor of
procurement function, 19 percent referenced the availability of enough financial resources, and
17 percent cited the nature of the service offered by the organization, with the same percentage
citing the market structure of the suppliers. The proper use of resources was mentioned by 36
percent of the 45 employees. Unpopular stock cutbacks accounted for 24% of costs, while 19%
noted just or no Scraps, 13% stated no cheap input, high output, and 9% cited on shorter
operations and production kinds. Concerning the issues facing the procurement function, 48
percent identified a lack of the correct material input, 10% cited poor resource utilization, 14%
cited a lack of professionally qualified and experienced workers, and finally 28% highlighted
technology change. According to the findings, the organization should choose the appropriate
material input in order to boost efficiency, and they should also learn to adapt to any
technological changes as technology improves the company's efficiency. They are both empirical
studies that have discovered procurement flaws in businesses and the procedures or
recommendations that can be taken to address them. The current study, on the other hand, looks
at procurement from the perspective of a private business or individual, with the goal of
duplicating effective procurement methods in the private sector.

2.13 Conceptual Framework

The establishment of a conceptual framework, or a narrow notion that a researcher used in a

study, is an important component of research. It's an analytical tool with numerous forms and
contexts that can be used in a variety of fields where a comprehensive image is required. It's
utilized to arrange concepts and make conceptual distinctions (Adom et. al., 2018; Eizenberg &
Jabareen, 2017; Framework,2018; Solar & Irwin, 2010). It is mostly centered on the study's
major concepts and variables, and it serves as a researcher proposal to address the research
problem. It is made up of interconnected notions that describe the relationship between them and
how the researcher claims to solve the research topic.
It is a framework that demonstrates how to perform a logical hard reset in a car. Its goal is to
encourage the development of theory that will be useful to practitioners in the field (Adom et. al.,
2018; Solar & Irwin, 2010). In effect, a conceptual framework is a model created by the
researcher to describe the relationship between the study's major factors. It determines the
optimal age for presenting the specific study topic that drives the reported investigations based
on the problem statement (McGaghie et. al., 2001). It can also be a researcher's adaption of a
model from an existing theory to suit and attain a resource goal. A conceptual framework is a
logical structure used by researchers to better explain how concepts in a study or the
phenomenon under study could be examined, ideally with the use of a visual display or narration
(Grant & Osanloo, 2014; Camp,2001; Eizenberg & Jabareen,2007). Perhaps this is why
Huberman and Miles (2002) believe that conceptual frameworks can be graphical or narrative in
nature, displaying the essential variables or constructs to be researched as well as their
hypothesized relationships.

It is basically, a researcher’s way of explaining how a research probity is a researcher's way of

describing how a research problem will be investigated in order to reach the study goal. As a
result, a conceptual framework provides an integrated approach to a research subject (Adom et.
al., 2018; Solar & Irwin, 2010). It mostly connects the researcher's concepts and theories and
shows the sequence of actions the researcher intends to take in a research to achieve the
research's goal. The framework makes it easier for the researcher to clarify and define the
concept within the study's problem. It is stated that a conceptual framework provides numerous
advantages to a research project. For example, it aids researchers in identifying and constructing
their worldview on the phenomenon being studied (Grant & Osanloo, 2014). It allows
researchers to express their accepted solutions to the problem investigated in the most
straightforward manner feasible (Adom et. al., 2018; Eizenberg & Jabareen, 2017;
Framework,2018; Solar & Irwin, 2010). It emphasizes the reasons why a research issue is
worthwhile to investigate.

Effective procurement practices within organizations, according to the researchers, could help
improve all aspects of their performance and vice versa. This suggests that implementing
appropriate procurement practices could help organizations improve their financial performance
by lowering operational costs, increasing sales, and, in turn, increasing profitability. The
researcher also claims that effective procurement practices can help organizations improve their
level of innovation, particularly as procurement and other officers work to come up with new
ways of procuring and conducting business. In addition, the researchers suggest that procurement
has the potential to help improve the internal processes of organization and satisfy/delight
customers.

As a result, the researchers believe that adopting and implementing effective and efficient
procurement methods within firms could help them improve their overall performance. As a
result, it will aid in the improvement of antenna processes as well as the assistant of innovation
and its associated innovation ways of doing things differently in a positive way. This will finally
assist the firm in continually providing the appropriate goods and services to its customers'
satisfaction. All of these enhancements are expected to result in enhanced customer loyalty,
increased sales, increased market share, lower costs, and improved profitability.

2.14 Theoretical review

The theoretical background of the study has been embedded in the learning literature to
investigate the need for procurement practices in private organization. The study was guided by
two theories that is: the stakeholder theory and the institutional theory respectively. The sub-
sections below provide a brief review of these theories.

2.14.1 Stakeholder theory

The central tenet of the stakeholder theory draws on the stakeholder concept. A stakeholder is
any group or individual who can affect or is affected by the achievement of an organization’s
objectives (Freeman, 2016). Stakeholder theory suggests that companies produce externalities
that affect many parties (stakeholders) which are both internal and external to the firm.

2.14.2 The Institutional Theory

The institutional theory is concerned with the processes by which structures, routines, rules and
norms become established as the guidelines for an acceptable behaviour. Organizations act in a
way that fulfils both customer and legal requirement. Institutional theory for procurement
practices is especially pertinent as there are views that not all procurement practices are
conducive for generating competitive advantages for enterprises and are necessary due to
pressures from stakeholders (Günther and Scheibe, 2005).

2.15 Chapter Summary

Procurement procedures are strategic operations aimed at improving a company's profitability,

identifying more desirable suppliers, as well as lowering resources expenditure. Lean
procurement improves the overall performance of small and medium-sized organizations.
Customer happiness, quality, profitability, and market share are all factors to considered that can
be utilized to link organizational performance to procurement best practices. Customer
requirements are becoming more complex in the supply chain. Procurement must be proactive in
order to react to this development and capture new possibilities before the competition does A
lean purchasing method is necessary to keep better to the competition.