Report Noukeu Valerie V2

The Impact Of The Procurement Function On The Performance Of An Organization” case of the
National Hydrocarbons Corporation

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PEACE-WORK-FATHERLAND PAIX-TRAVAIL-PATRIE
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MINISTRY OF HIGHER EDUCATION MINISTERE DE L’EDUCATION SUPERIEUR
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UNIVERSITY INSTITUTE OF THE TROPICS UNIVERSITE DES TROPICS
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CERTIFICATION
This is to certify that the Research Project entitled “The Impact Of The Procurement Function On The
Performance Of An Organization” case of the National Hydrocarbons Corporation has been accepted for
NOUKEU NJEUDJI AGATHE VALERIE to meet the requirement governing the award of a higher
national diploma in Logistics and Transport Management.
ACADEMIC SUPERVISOR
MR. BATCHANGA John Signature………………
Date…………………………….
PROFESSIONAL SUPERVISOR
Mr. ESSOH Armel Loïc Signature…………………….
Date………………………….
PRESIDENT OF JURY
Name…………………………
Signature……………………...
MEMBER OF JURY ONE

Name…………………………
MEMBER OF JURY TWO

Name…………………………
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WRITTEN AND PRESENTED BY NOUKEU NJEUDJI AGATHE VALERIE
DEDICATION
To
NJEUDJI FAMILY
ii
ACKNOWLEDGEMENT
My gratitude goes to all the following people and even more for their encouragements and support either
materially or morally for this work and the internship to be a success.
• My utmost gratitude goes to Mr. Adolphe Moudiki, Executive General Manager of the
National Hydrocarbons Corporation for granting my internship request.
• My Academic supervisor, M. John Batchanga for his advices, effort and corrections.
• I equally thank Dr. Enow Baiye and Mm. Mbu Glory for their encouragement and their
support for the accomplishment of this piece of work.
• Mr. Armel Loic Essoh, my Professional supervisor for his advices and challenging questions
so as to step up our level of practicality.
• To the staff and administration of University of Institute of the Tropics
• To the staff of the Procurement department Tina, Nadège and Mme Vanessa Belinga for the
friendliness and willingness to share their knowledge.
• To my parents for the encouragements and support they gave me
• To my friends and also intern comrades for their collaboration, support and encouragements.
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ABSTRACT
Procurement is the process of obtaining a good or service in any way, including borrowing, renting and
even force or plunder. For decades, the performance of the procurement sector has attracted great
attention from practitioners and researchers due to low levels of performance. This work examines “The
Impact of the procurement function on the performance of an organization”. The overall objective of the
study is to assess the impact of the procurement function on the performance of an organization with a
particular case of the National Hydrocarbons Corporation. Theories were used to add strength to the
research. These theories like the Agency theory, Bloom’s taxonomy of learning theory, Procurement
capability reviews assessment model and the Resource Based theory. The research data was collected
using the combination of qualitative and quantitative methods giving a mixed research approach. Our
findings showed that the procurement function has an impact on organizational performance. On the
basis of this conclusion, the study recommends the employment of agents possessing a professional
qualification in procurement or the regular training of the employees. It also recommends to the
acceleration of reforms within the Department to automate activities and operations. Also, the use of
procurement software and record management systems shall be of great value.
Keywords : Procurement, Procurement function, Organisational performance
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LIST OF ABBREVIATIONS /ACRONYMS
CHC - Cameron Hotels Corporation
CNIC – Cameroon Shipyard and Industrial Engineering Ltd
COTCO – Cameroon Oil Transportation
COTSA – Cameroon Oil Terminal
Ha-Alternative Hypothesis
Ho-Null Hypothesis
HYDRAC – Hydrocarbures Analyses Contrôles
ICT – Information And Communication Technology
ISTAG- Institut Supérieur de Technologie Appliquée et des Gestion
KPI – Key Performance Indicators
NHC - National Hydrocarbons Corporation
PCRM-Procurement Capability Reviews Assessment Model
RMS – Record Management System
SCDP –Cameroon Company of Petroleum Depots
SNH – Société Nationale Des Hydrocarbures
SWOT- Strenght, Weaknesses, Opportunities And Threats
TRADEX – Société De Trading Et D’exportation De Pétrole Brut Et De Produits Pétroliers
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TABLE OF CONTENS
CERTIFICATION.......................................................................................................................................i
DEDICATION............................................................................................................................................ii
ACKNOWLEDGEMENT.........................................................................................................................iii
ABSTRACT..............................................................................................................................................iv
LIST OF ABBREVIATIONS /ACRONYMS............................................................................................v
TABLE OF CONTENS.............................................................................................................................vi
CHAPTER ONE: INTRODUCTION.........................................................................................................1
1.1 BACKGROUND TO THE STUDY.................................................................................................1
1.1.1 Historical Background...............................................................................................................1
1.1.1.2 Historical Background of the National Hydrocarbons Corporation.......................................2
1.1.2 Theoritical background..............................................................................................................2
1.1.3 Conceptual background.............................................................................................................4
1.1.4 Contextual background..............................................................................................................4
1.2 PROBLEM STATEMENT...............................................................................................................5
1.3 OBJECTIVES OF THE STUDY....................................................................................................6
1.3.1 General Objective......................................................................................................................6
1.3.2 Specific Objectives....................................................................................................................6
1.4 RESEARCH QUESTIONS...........................................................................................................6
1.4.1 General Research Questions......................................................................................................6
1.4.2 Specific Research Questions....................................................................................................6
1.5 HYPOTHESIS OF THE STUDY...................................................................................................6
1.5.1 General Hypothesis....................................................................................................................6

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1.5.2 Specific Hypothesis Hypothesis..............................................................................................7
1.6 SIGNIFICANCE OF THE STUDY.................................................................................................7
1.6.1 Significance to the Company......................................................................................................7
1.6.2 Significance to the Researcher....................................................................................................7
1.6.3 To Feature Researchers...............................................................................................................7
1.7 JUSTIFICATION OF THE STUDY.................................................................................................7
1.8 SCOPE OF THE STUDY.................................................................................................................8
1.8.1 Geographical Scope...................................................................................................................8
1.8.2 Time Scope................................................................................................................................8
1.8.3 Thematic Scope..........................................................................................................................8
CHAPTER TWO: LITERATURE REVIEW.............................................................................................9
2.1 THEORETICAL REVIEW..............................................................................................................9
2.1.1 Agency Theory..........................................................................................................................9
2.1.2 Bloom’s Taxonomy of Learning Theory.................................................................................10
2.1.3 Procurement Capability Reviews Assessment Model.............................................................11
2.1.4 Resource Based Theory...........................................................................................................11
2.1.5 Approach by Objectives...........................................................................................................12
2.2 CONCEPTUAL REVIEW.............................................................................................................13
2.3 EMPIRICAL REVIEW..................................................................................................................14
2.3.1 Procurement and organizational performance.........................................................................14
2.3.2 Procurement Performance........................................................................................................15
2.3.4 Information and Communication Technology and Procurement Performance.......................19
2.3.6 Staff Qualifications and Procurement Performance................................................................22
ACTIVITIES....................................................................................................................................23
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2.4.1 Presentation of the organization...............................................................................................23
2.4.2. Organizational structure of NHC............................................................................................26
2.4.4 INTERNSHIP ACTIVITIES a. Establishment of Purchase Orders;.......................................29
d. Archiving.......................................................................................................................................29
2.4.5. SWOT ANALYSIS OF THE NATIONAL HYDROCARBONS CORPORATION.............30
CHAPTER THREE: METHODOLOGY..................................................................................................32
3.1 RESEARCH DESIGN.....................................................................................................................32
3.1.1 Research approach...................................................................................................................32
3.2 POPULATION OF THE STUDY..................................................................................................32
3.3 SAMPLE SIZE OF THE STUDY..................................................................................................32
3.4 SAMPLING TECHNIQUE OF THE STUDY...............................................................................32
3.5 SOURCES OF DATA COLLECTION.......................................................................................33
3.5.1 Primary Source of Data Collection..........................................................................................33
3.5.2 Secondary Source of Data Collection.....................................................................................33
3.6 VALIDITY AND RELIABILITY OF THE RESEARCH INSTRUMENTS..........................33
3.7 Construction of Research Instrument.........................................................................................33
CHAPTER FOUR: PRESENTATION ANALYSIS AND......................................................................35
INTERPRETATION................................................................................................................................35
Introduction...........................................................................................................................................35
4.1 PRESENTATION OF FINDINGS.................................................................................................35
4.1.1 Response Rate..........................................................................................................................35
4.1.2 Distribution of Respondents by Gender...................................................................................36
4.1.3 Distribution of Respondents by Age........................................................................................37
4.1.4 Distribution of Respondents by Academic Qualifications.......................................................37
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4.1.5 Distribution of Respondents by Work Experience..................................................................38
4.2 HYPOTHESIS TESTING..............................................................................................................39
4.2.1 The Procurement function has an impact on organizational performance..............................43
4.2.2 Records Management Systems and Information Communications Technology impact the
performance of an organization........................................................................................................44
4.2.3 Staff qualifications contribute to the procurement performance of an organization................44
4.2.4 Procurement procedures affect the performance of an organization........................................45
CHAPTER FIVE: DISCUSSIONS OF FINDINGS, CONCLUSION AND RECOMMENDATION.....46
5.1 SUMMARY OF FINDINGS...........................................................................................................46
5.1.1 Records Management System and Information Communications Technology......................46
5.1.2 Staff Qualifications..................................................................................................................46
5.1.3 Procurement Procedures..........................................................................................................47
5.2 CONCLUSION...............................................................................................................................47
5.3 RECOMMENDATIONS................................................................................................................48
5.4 DIFFICULTIES ENCOUNTERED...............................................................................................48
Limited Number of photocopy machines.............................................................................................48
5.5 SUGGESTED AREAS FOR FURTHER RESEARCH.................................................................49
REFERENCES.........................................................................................................................................50
APPENDIX ..................................................................................................................................................
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QUESTIONNAIRE ..................................................................................................................................
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CHAPTER ONE: INTRODUCTION
This chapter introduces the topic of the work. It contains the different backgrounds to the study, the
problem statement, research objectives, research questions and hypothesis of the study. It also contains
the significance, justification and scope of the study.
1.0. BACKGROUND TO THE STUDY
Historical Background
Historical Background of Procurement
Procurement and the Pyramids
The first traces of procurement can be seen throughout ancient history, including the Egyptians in 3,000
BC. Though there was no designated procurement function, materials management aided in the building
of the pyramids. The Egyptians used scribes to manage the supply for these massive projects. Scribes
played a clerical role, recording the amounts of materials and workers needed on papyrus rolls. These
scribes would track orders through fulfillment and were one of the first known in history to be in the
procurement profession.
Procurement Revolution
Procurement’s organizational role was not truly recognized until the 1800s. One of the earliest
acknowledgements of the procurement function can be found in Charles Babage’s 1832 book, On the
Economy of Machinery and Manufactures. He points to the need for a ‘materials man’ in the mining
sector who selects, purchases and tracks goods and services required. Essentially, Babbage called for a
centralized procurement officer.
During the Industrial Revolution, procurement solidified its importance. Marshall Kirkman’s 1887 book
The Handling of Railway Supplies - Their Purchase and Disposition, detailed procurement’s strategic
contributions to the railroad industry, specifically in acquiring goods from developed parts of the
country and bringing them south and west. In 1886, the Pennsylvania Railroad gave departmental status
to the procurement function, referring to it as the ‘Supplying Department.’
Procurement Shifts Again
Unfortunately, the World Wars forced procurement initiatives to shift back away from a strategic role to
strictly clerical. Due to the scarcity of materials during war, procurement revolved heavily around order
placement. During wartime and the depression, the objective was to obtain enough raw materials,
services, and supplies to simply keep the economy running.
It was not until the mid-1960s that procurement once again took on managerial role, on a widescale. The
concept of material management became the focus during this period. Procurement professionals
emphasized competitive bidding, with price becoming the determining factor for most contracts. An
increase in trained professionals during this time period helped procurement on its way to regaining
departmental status.
The 1980s saw a significant increase in supplier competition. This gave organizations the luxury of
putting more focus on supplier quality and dependability. Supplier management became an important
factor in procurement and remains so today. By the late 1990s, the role of procurement had begun its
WRITTEN AND PRESENTED BY NOUKEU NJEUDJI AGATHE VALERIE 1
transition into strategic sourcing. Procurement officials looked at supplier as partners and long-term
contracts were encouraged. This was the beginning of procurement’s modern day evolution.
Procurementlearning.nd.Sourcesuite.www.sourcesuite.com/procurementlearning/purchasing-articles/
history-ofprocurement.jsp
1.1.1.2 Historical Background of the National Hydrocarbons Corporation

The National Hydrocarbons Corporation (SNH) is a public company with a share capital of eight billion
(8,000,000,000) FCFA wholly owned by the State of Cameroon. Its headquarter in Yaoundé. It is an
industrial and commercial company with legal personality and financial autonomy. Created on the 12th
of March 1980, its objectives are to promote and give value to the national mining domain and manage
State interests in the hydrocarbons sector. SNH is also empowered to carry out all financial operations,
in conjunction with the Ministry of Finance.
Oil prospection began in Cameroon in 1947. The first commercial discoveries were made in the Rio del
Rey basin in 1972, but it was not until 1977 that the country became an oil producer, with the first ton of
oil produced from the Kole field. Production reached the record level of 186 000 barrels/day in 1985.
From 1986, year of the «oil price collapse», it began to decline. Faced with this situation, the
government introduced incentives to boost exploration/production. Thanks to these measures and the
efforts made by SNH to curb this decline, which was notably linked to ageing fields, a renewed interest
of international oil companies in Cameroon’s mining domain was observed. As at 1 st June 2020, this
mining domain, which covers an area of 31 839.82 km 2, comprises 04 prospecting permits and/or
exclusive prospecting authorizations, 21 concessions and/or exclusive exploitation authorizations, 02
blocks under negotiation and 09 free blocks. As concerns gas, production was launched in 2012. And
since 2018, Cameroon has been an exporter of liquefied natural gas (LNG). In fact, gas resources, which
remained for a long time on hold in the absence of a promising market, are now finding outlets through
various projects conducted by SNH and international companies.
1.1.2 Theoritical background
A. Agency Theory
According to Jensen and Mackling (1976) an agency relationship is “a contract under which one or more
persons (principals) engages another person (the agent) to perform some service on their behalf which
involves delegating some decision-making authority to the Agent. When executing the tasks within the
principal-agent relationship, the agent must choose actions that have consequences for both the principal
and the agent. Since these outcomes can be either negative or positive for each of the actors, the chosen
action of the agent affects the welfare of both. The principal-agent relationship is often forged because
the agent possesses a greater abundance of the needed skills, abilities, and/or time to perform the desired
activities.
The Agency theory can be applied to employer-employee and buyer-supplier relationships, facilitated by
ICT and legal framework. Procurement involves several parties with different competing goals. Internal
stakeholders, such as departments exist; with conflicting goals, adding complexity to the procurement
performance.

B. Bloom’s Taxonomy Of Learning Theory
Bloom’s Taxonomy is a system of hierarchical models (arranged in a rank, with some elements at the
bottom and some at the top) used to categorize learning objectives into varying levels of complexity
(Bloom, 1956). In the mid-1950s, Bloom worked in collaboration with Max Englehart,
Edward Furst, Walter Hill, and David Krathwohl to devise a system that classified levels of cognitive
functioning and provided a sense of structure for the various mental processes we experience
(Armstrong, 2010).This model helps teachers identify the key learning objectives they want a student to
achieve for each unit because it succinctly details the process of learning. The taxonomy explains that;
1) Before you can understand a concept, you need to remember it.
2) To apply a concept, you need to first understand it.
3) To evaluate a process, you need to first analyze it.
4) To create something new, you need to have completed a thorough evaluation (Shabatura, 2013).
This hierarchy takes students through a process of synthesizing information that allows them to think
critically. Students start with a piece of information and are motivated to ask questions and seek out
answers. Not only does Bloom’s Taxonomy help teachers understand the process of learning, but it also
provides more concrete guidance on how to create effective learning objectives.
C. Procurement Capability Reviews Assessment Model
The Procurement Competency Framework can be used by individuals to assist their personal
development through skills assessment, identification of training and development needs and career
planning. It can also supplement the organization’s existing staff development programs, resource and
succession planning initiatives. A study done by the Australian Procurement and Construction Council
(APCC), found that procurement skills are not well organized nor at a sufficient capacity or level of
capability for the size, complexity, and risk exposures associated with the sector’s increasing
expenditure. An effective procurement function contribute to the continuity of the organization’s
primary business activities ,control and reduce all procurement related costs , reduce the organization’s
risk exposures in relation to its supply markets, and contribute to innovation that improves service
delivery(Mueller, 2003). The reviews challenge departmental procurement activities at a strategic and
structural level, covering the widest definition of procurement from commodities through to complex
projects. They assess how far government procurement in each Department meets the demanding
standards required to achieve value for money now and in the future. The outcomes from the reviews
will drive improvements in procurement capability where the greatest impact can be achieved. PCRs are
intended to provide an overall assessment of departmental performance in procurement, based on the
underpinning PCR Assessment Model, which aims to assess against world class procurement standards
and practice. The procurement policy and standards framework feeds into and is aligned with the PCR
assessment model. The model guides the reviewers when they assess the capability of each department
and supports the key requirements contained in the policy and standards framework. The PCR model is
based on three key areas of capability, and nine more specific indicators; it is structured as follows:
visibility and impact of leadership, vision, aspirations, business and policy alignment, stakeholder and
supply base confidence levels, effective resourcing of procurement activity, "Intelligent client"
capability, Governance and organization, strategic and collaborative approach to market engagement
and sourcing, effective use of procurement and PCR tools and techniques, knowledge and performance
management. D. Resource Based Theory
Resource based theory identifies and analyzes an organization’s strategic advantages that will in turn be
a source of competitive advantage. These competitive advantages may be organizational, human or
financial and their advantages are conferred based on their rareness, uniqueness and value. Resource
Based Theory emphasizes that competitive advantage in organizations is determined through proper
planning and functioning of procurement. Peteraf and Barney (2003), states two assumptions used in
analyzing competitive advantage using this theory; one, firms within the same industry may have
diverse resources and the other, believes this dissimilarity in resources may continue for a long duration.
A resource becomes a competitive advantage when it is inimitable
1.1.3 Conceptual background
1) Procurement; Procurement includes sourcing and purchasing and covers all the activities
involved in the product/service sourcing, purchasing and delivery from supplier to the customer
(John, Chandra, Tim, 2008). Also, procurement is the process of obtaining good or service in
anyway including borrowing, leasing and even force or pillage (Lysons et al , 2006)
2) Performance; Performance is a particular result obtained in management , economics,
marketing etc. that prints features of competitiveness , efficiency and effectiveness of the
organization and its procedural and structural components ( Verboncu , zalman , 2005).
Also, according to Kane, performance can be defined at the level of each individual within the
organization or at organization level, perceived as an understanding of results.
3) Organizational Performance; According to Wikipedia, organizational performance comprises
the actual output or results of an organization as measured against its intended outputs.
Organizational performance also the success or fulfilment of the organization at the end of
program or projects as it intended.
4) Records Management System; this is the management of records for an organization
throughout the records lifecycle, the activities in this management include the systematic and
efficient control of the creation, maintenance and destruction of the records along with the
business transactions associated with them. David, R. (2005).
5) Information and Communication Technology: This is the digital processing and utilization of
information by the use of electronic computers. It comprises the storage , retrieval , conversion
and transmission of information (Ifueko Omoigui Okauru, 2011).Also, it can be defined as a
branch of engineering dealing with the use of computers and telecommunications equipments to
store, retrieve , transmit and manipulate data (Daintith, John, ed , 2009).
6) Staff Qualification; It means an individual who is competent whether by education, training, or
experience, to make the particular decision at issue.
1.1.4 Contextual background
This research topic is the impact of the procurement function on the performance of an organization
which affirms the fact that it the research falls within the transport and logistics milieu that therefore
contributes to the global supply chain. However, in the procurement department of the National
Hydrocarbons
Corporation, there are four major activities taking place, namely;
i. Selection of Suppliers;
In the National Hydrocarbons Corporation, the selection of new suppliers is based on the supplier with
the lowest possible cost all tax inclusive. This is done so as to maximize profits and minimize cost, but
however , it is said that the supplier with the lowest price may not always be the best because other
factors need to be taken in to consideration which are ; quality , delivery time ,packaging, payment
modes and other after sale services. ii. Establishment of Purchase Orders;
The procurement department of the National Hydrocarbons Corporation is in charge of providing the
company and her various sites (GAZODUC, Mvia, Bipaga etc.) with working equipment’s and services
depending on their needs. By so doing, after the identification of the need and the establishment of a
request and the selection of the best supplier from all the possible suppliers there is an establishment of a
Purchase Order. A Purchase Order is an official document issued by a buyer committing to pay the
seller for the sale of specific products or services to be delivered in the future. For a purchase order to be
established in favor of a supplier, the supplier has to provide a Proforma invoice which shows the
designation, quantity, prices of the goods requested, mode of payment and other conditions. This
purchase order is produced in three copies, one for the supplier, and one as a proof of evidence of
contract between the National Hydrocarbons Corporation and the supplier and the last for
documentation to be used at the end of year by the Budgeting department. iii. Bill Payment Requests
Also called a Voucher or a bill, is a form that includes all of the supporting documents showing the
money owed and any payments to a supplier or vendor for an outstanding payable. It is recorded in a
Voucher Register. The procurement department of the National Hydrocarbons Corporation is in charge
of its establishment. It establishes it with the help of the following documents; A request order from the
department in need or a letter ordering the establishment of a purchase order, the original copy of the
purchase order signed and stamped by the supplier, the final bill or invoice, the delivery note and an up
to date certificate of non-royalty. Upon establishment of this voucher it is then sent further to the
financial department for payment. iv.Request for Funds
This is a document which permits the disbursement of funds for the purchase or rendering of a particular
service.
It is done on the exceptional occasions which are;
• Request by a department in need and has proof
• Reimbursement of expenses incurred by the employees which needs to be accompanied
by supporting documents or receipts
• Payment to suppliers who expressively request to be paid cash in hand.
From all this, we see that the procurement department is part of the global supply chain
and plays a vital role in the acquisition of goods and services required for the proper
functioning of the national Hydrocarbons corporation and her sites.
1.1 PROBLEM STATEMENT
The National Hydrocarbons Corporation’s purchasing department remains under pressure to achieve
financial savings and deliver quality goods and services to her fellow departments depending on their
needs through efficient and coordinated service delivery. It goes through significant pressure as a result
of globalization, innovations, technological changes, cost pressure, and regulatory compliance which has
forced the procurement function to focus only cost reduction and attaining more value for money. The
inefficiency and incompetence of overall administration and management of procurement function in the
organization contributes to loss. Despite all the reforms in the procurement department, it still suffers
from poor performance characterized by slow with a lot of bureaucracy ,overspending ,poor planning,
poor project monitoring , need for more transparency and accountability , addressing collusion in the
tender evaluation and award, inadequate training of the procurement officers especially on the technical
fields
Also, the improper implementation of recommended performance standards results in unnecessarily
high operation costs, uncoordinated business activities, inability to achieve domestic policy goals, and
failure to attract and retain professionals.
Organizations are nowadays increasing their professionalism and efficiency in the procurement process
for which the National Hydrocarbons Corporation is still left out. Furthermore, the National
Hydrocarbons Corporation does not embrace the use of procurement practices such as electronic
procurement and the employment of professionals and do not focus on achieving competitive advantage.
The National Hydrocarbon’s Corporation has not yet embraced its full Organizational performance as
adequate Information Technology is partially implemented in procurement. This is due to; employee
resistance to change, failure by top management to employ competent staff and to allocate the required
resources for employee training and orientation and lack of finances.
OBJECTIVES OF THE STUDY
A research objective describes what your research is trying to achieve and explain why you are pursuing
it. (Eoghan Ryan, 2022).
General Objective
The main objective of the study is to establish the Impact of the procurement function on the
performance of an organization.
1.3. Specific Objectives
The specific objectives of the study were:
i. To evaluate the extent to which Records Management Systems and Information Communications
Technology impact procurement performance of an organization.
ii. To determine the contribution of staff qualifications to procurement performance of an
organization.
iii. To determine how procurement procedures affect the performance of an organization.
1.4 RESEARCH QUESTIONS
1.4.1 General Research Questions

How does the procurement function impact the performance of an organization?
1.4.2 Specific Research Questions

i. To what extent do Records Management Systems and Information Communications Technology
impact procurement performance of an organization?
ii. What is the contribution of staff qualifications to procurement performance of an organization?
iii. How do procurement procedures affect the performance of an organization?
1.5. SCOPE AND LIMITATION OF THE STUDY

Geographical Scope
The geographical scope of study was carried out at the National Hydrocarbons Corporation, situated in
Yaoundé.
Time Scope
This internship was done in a period of three months from the 1 st of August 2022 to the 30th of
September 2022.
Thematic Scope
This research topic is the impact of the procurement function on the performance of an organization
which affirms the fact that it falls within the transport and logistics milieu that therefore, contributes to
the global supply chain.
1.6. ORGANIZATION OF THE STUDY
This piece of work is divided into five chapters; chapter one is made of the introduction, chapter two the
literature review, chapter three research methodology, chapter four is the presentation, analysis and the
interpretation of data and chapter five is based on discussion, recommendation and conclusion.

CHAPTER TWO: LITERATURE REVIEW
2.0. INTRODUCTION
In this chapter we shall review the theories outlined in the presiding chapter by expanding on their view and
relating them to warehouse management, review by concept, and review by objectives and the presentation
of the internship activities.
2.1 THEORETICAL REVIEW
Agency Theory
According to Jensen and Mackling (1976) an agency relationship is “a contract under which one or
more persons (principals) engages another person (the agent) to perform some service on their behalf
which involves delegating some decision-making authority to the Agent. When executing the tasks
within the principal-agent1relationship, the agent must choose actions that have consequences for both
the principal and the agent. Since these outcomes can be either negative or positive for each of the
actors, the chosen action of the agent affects the welfare of both. The principal-agent relationship is
often forged because the agent possesses a greater abundance of the needed skills, abilities, and/or time
to perform the desired activities. Inevitably, however, there are several problems for the principal in
governing the relationship with the agent, the first of which involves choosing an appropriate agent.
Consistent with the tenets of agency theory, the view adopted here assumes that agents, purchasing
officials, are rational, selfinterested utility maximizers. However, it is not assumed that these agents
behave selfishly and do so with craftiness.
In other words, slightly contrary to Williamson’s (1985) transaction cost economics framework,
although it is assumed that people are opportunistic in the sense that they may avoid in a self-interested
manner by trying to minimize effort if it fulfills their needs, it is not assumed that they will willingly
misrepresent or lie about that effort. More to the point, it is merely assumed that the principal and agent
do not share the same levels of information, and as such, the agent can opportunistically take advantage
of the situation, sometimes to the detriment of the principal. This latter situation is known as moral
hazard and is often the result of asymmetric information.
Asymmetric information agency theory in economics has long been concerned with the issues of
control that arise as a result of information asymmetries between agents delegated to maximize the
welfare of the principals who contracted with them (Trionfetti, 2000). In general, all principalagent
relationships are plagued by uncertainty not only in the level of an agents knowledge, skills and abilities,
but also in both the way the agent’s action gets transformed into the output and whether or not the agent
is acting in the principal’s best interest. This uncertainty is the result of the advantageous differential in
knowledge held by the agent about his their own actions in serving the principal (Ross, 1973). This
difference is information asymmetry, and it is a third problem for the principal in governing the
relationship with the agent. Although under normal circumstances both the Principal and the Agent can
observe the outcome, it is often the case that the principal cannot or does not observe the agent’s specific
action, effort, or capacity to perform all of which are supposed to obtain the outcome favored by the
principal. However, one must be cognizant that the agent not only observes her own action, but also may
have knowledge not possessed by the principal about other factors that lead to the outcome.

This Information asymmetry describes the inability of the principal to properly assess the extent to
which the agent chooses an action that coincides with the principal’s best interests. As such, there can be
little doubt that asymmetric information permeates the principal-agent relationship. The agency theory is
widely used in procurement, Cliff Macure and Eric Prier did a study on using agency theory to model
cooperative public purchasing and the operational linkages between government organizations, their
purchasers and their suppliers are vied as important contributors to the success of government policy and
decision-making. Although cooperative purchasing has been a topic of study for many years (Wooten,
2003), researchers revisited issues related to cooperative public purchasing (CPP) in search of more
clarification on with respect to its theoretical underpinnings (Aylesworth, 2003). Perhaps due to little
theoretical direction and few standards to guide practice, to inform on concisely about what comprises
cooperative procurement and its implications for public purchasing. Indeed, John Ramsay and Nigel
Caldwell (2004) make a strong case that metaphors so often used can lead to misunderstanding the
nature of interesting phenomenon. It is no different in public purchasing, as slight misconceptions about
institutional goals and to whom one is accountable may in fact have significant organizational
consequences. Since CPP can be thought of as a chain of agency relationships similar to the contractual
relations found within the economic firm, valuable questions arise as to the best way to organize the
stakeholder relationships in public procurement. RonaldCoase (1937) was the first to reformulate the
notion of the firm in orthodox economic theory from that conceived as a “black box” that transforms
inputs (resources) into outputs (production).
Instead, he conceived it as the neoclassical economics perspective of a system of relationships
which directs production. This implies that a firm is more efficient at aligning resources with outputs
than is the market. procurement can be arranged through the market and regulated by the price
mechanism with all of its attendant hidden costs to the procurement official, or the exchange
transactions of procurement can be vertically integrated and ordered through the firm in a hierarchy
where purchasing is integrated with the needs for the same products by other principals (Harold
Demsetz,1983). Thus agency theory can expose the motivations of stakeholders in public procurement.
Agency theory generally assumes that actions and efforts are normally unverifiable, while outcomes are
generally known and confirmable (Dixit, 2002). In terms of CPP, the effort of the procurement official is
verified only when the outcome (the purchase) is obtained However, it will be shown that the action, as
opposed to the outcome, may not be readily distinguished by the stakeholders.
Consider that although the procurement official might believe that the actual purchase is an
outcome,” the purchase is merely considered an “action” from the viewpoint of the stakeholder for
whom the purchase was made. In other words, the level of analysis is important in determining what
behavior is an “action” as opposed to an “outcome.”
Another reason why agency theory is a fruitful method for modeling public purchasing is that it helps to
identify the various incentives of the stakeholders. By clarifying the opportunities and constraints they
face, there is hope that efficiency, effectiveness and accountability will be increased.
Bloom’s Taxonomy of Learning Theory

Bloom (1956) produced a taxonomy of learning theory which is helpful in identifying different
cognitive skills. He identified six levels in this scheme; knowledge, comprehension, application,
analysis, synthesis and evaluation. Movement from level 1 to level 6 represents an increase in the level
of sophistication of cognitive ability. From strategic thinking perspective, higher demands is be made of
the skills associated with analysis, synthesis and evaluation. At operational and tactical level;
knowledge, comprehension and application may be more heavily utilized. There are implications with
this theory for the ability to learn; from the point of view of attributes in relation to personnel issues with
regard to staffing, training and education. Sophisticated levels take on greater importance when
analyzing situations in terms of relevant factors and the relationships between them, or developing,
through synthesis, a picture of the wider system and its functioning as a whole as a result of the inter-
dependency of its parts. An example in procurement is the ability to understand each stage of activity in
the process, as one side of the coin, but also to appreciate how the stages interrelate and to consider the
performance of the system as a whole. Learning is not attempting to transfer a body of knowledge as if it
were an inert commodity to be regurgitated in an exam and then promptly forgotten. It should serve
more useful purpose to enhance procurement performance through embracing best practice.
Because it is hierarchical, the higher levels of the pyramid are dependent on having achieved the
skills of the lower levels.
The individual tiers of the cognitive model from bottom to top, with examples included, are as
follows: Knowledge: recalling information or knowledge is the foundation of the pyramid and a
precondition for all future levels → Example: Name three common types of meat.
Comprehension: making sense out of information → Example: Summarize the defining characteristics
of steak, pork, and chicken.
Application: using knowledge in a new but similar form → Example: Does eating meat help improve
longevity?
Analysis: taking knowledge apart and exploring relationships → Example: Compare and contrast the
different ways of serving meat and compare health benefits.
Synthesis: using information to create something new → Example: Convert an "unhealthy" recipe for
meat into a "healthy" recipe by replacing certain ingredients. Argue for the health benefits of using the
ingredients you chose as opposed to the original ones. Evaluation: critically examining relevant and
available information to make judgments → Example: Which kinds of meat are best for making a
healthy meal and why?
2.1.3 Procurement Capability Reviews Assessment Model
The model stipulates that the Centre of expertise work with public bodies within its respective sectors to
assess procurement capability. This is done by interviews and by reviewing evidence prepared in
advance by the organization. The centers of expertise will, in consultation with their sector develop an
action plan, agree a timetable and address any issues that their sector may have about the process. It is
proposed that the PCAs take place annually to ensure ongoing and continuous improvement of
procurement activities right across the public sector. The Assessment Levels are on: non-conformance,
Conformance, Improved Performance and Superior Performance the Procurement Competency
Framework can be used by individuals to assist their personal development through skills assessment,
identification of training and development needs and career planning. It can also supplement the
organization’s existing staff development programs, resource and succession planning initiatives. A
study done by the Australian Procurement and Construction Council (APCC), found that procurement
skills are not well organized nor at a sufficient capacity or level of capability for the size, complexity,
and risk exposures associated with the sector’s increasing expenditure. An effective procurement
function contribute to the continuity of the organization’s primary business activities ,control and reduce
all procurement related costs , reduce the organization’s risk exposures in relation to its supply markets,
and contribute to innovation that improves service delivery(Mueller, 2003).
Resource Based Theory
Resource based theory identifies and analyzes an organization’s strategic advantages that will in
turn be a source of competitive advantage. These competitive advantages may be organizational, human
or financial and their advantages are conferred based on their rareness, uniqueness and value. Resource
Based Theory emphasizes that competitive advantage in organizations is determined through proper
planning and functioning of procurement. Petered and Barney (2003), states two assumptions used in
analyzing competitive advantage using this theory; one, firms within the same industry may have
diverse resources and the other, believes this dissimilarity in resources may continue for a long duration.
A resource becomes a competitive advantage when it is inimitable. If all organizations in an industry
have the same resources there would not be any competitive advantage available Cool et al (2002).
Resource efficiency enables procurement achieve more with less. According to Barney (1991),
resources enable firms improve efficiency and save on unnecessary costs. Procurement practices should
be uncommon and difficult to imitate, for example sourcing processes. Both operational and
organizational functioning are incorporated in Resource Based View. Organizations that purchase
internationally, function well at the business level. Uncommon resources keep away the competition and
enable organizations achieve higher profits. ERP systems are expensive to install and not all companies
have embraced their use, this means that companies that have already installed it are a step ahead of the
competition. Effective Collaboration contributes to sourcing performance by capturing additional value
for end users through effective collaboration with suppliers and supplier involvement in the
development of product specifications. Sourcing positively impacts procurement by enabling better
performance. This is achieved by casting the net wide enough so as to achieve the best possible deal. As
products mature and value shifts innovation takes place.
2.1.5 Approach by Objectives
1. “To establish the Impact of the procurement function on the performance of an organization.”
“To evaluate the extent to which Records Management Systems and Information
Communications Technology impact procurement performance of an organization.”

Agency Theory
As mentioned above, the agency theory is widely used in procurement, Cliff Macure and Eric Prier
did a study on using agency theory to model cooperative public purchasing and the operational linkages
between government organizations, their purchasers and their suppliers are vied as important
contributors to the success of government policy and decision-making. RonaldCoase(1937) was the first
to reformulate the notion of the firm in orthodox economic theory from that conceived as a “black box”
that transforms inputs (resources) into outputs (production). Instead, he conceived it as the neoclassical
economics perspective of a system of relationships which directs production. This implies that a firm is
more efficient at aligning resources with outputs than is the market. procurement can be arranged
through the market and regulated by the price mechanism with all of its attendant hidden costs to the
procurement official, or the exchange transactions of procurement can be vertically integrated and
ordered through the firm in a hierarchy where purchasing is integrated with the needs for the same

products by other principals (Harold Demsetz,1983). Thus agency theory can expose the motivations of
stakeholders in public procurement. Agency theory generally assumes that actions and efforts are
normally unverifiable, while outcomes are generally known and confirmable (Dixit, 2002). Agency
theory can be applied to employer-employee and buyersupplier relationships, facilitated by ICT and
legal framework. Procurement involves several parties with different competing goals. Internal
stakeholders, such as departments exist; with conflicting goals, adding complexity to the procurement
performance.
2. “To determine the contribution of staff qualifications to procurement performance in an

organization”
Bloom’s Taxonomy of Learning Theory
Bloom (1956) produced a taxonomy of learning theory which is helpful in identifying different
cognitive skills. He identified six levels in this scheme; knowledge, comprehension, application,
analysis, synthesis and evaluation. Movement from level 1 to level 6 represents an increase in the level
of sophistication of cognitive ability. Sophisticated levels take on greater importance when analyzing
situations in terms of relevant factors and the relationships between them, or developing, through
synthesis, a picture of the wider system and its functioning as a whole as a result of the inter-dependency
of its parts. An example in procurement is the ability to understand each stage of activity in the process,
as one side of the coin, but also to appreciate how the stages interrelate and to consider the performance
of the system as a whole.
PROCUREMENT CAPABILITY REVIEWS ASSESSMENT MODEL (PCRM)
The model stipulates that the Centre of expertise work with public bodies within its respective
sectors to assess procurement capability. This is done by interviews and by reviewing evidence prepared
in advance by the organization. The centers of expertise will, in consultation with their sector develop an
action plan, agree a timetable and address any issues that their sector may have about the process. It is
proposed that the PCAs take place annually to ensure ongoing and continuous improvement of
procurement activities right across the public sector. The Procurement Competency Framework can be
used by individuals to assist their personal development through skills assessment, identification of
training and development needs and career planning. It can also supplement the organization’s existing
staff development programs, resource and succession planning initiatives. Second objective
3. “To determine how procurement procedures affect the performance of an organization” Resource
Based Theory Resource based theory identifies and analyzes an organization’s strategic advantages
that will in turn be a source of competitive advantage. These competitive advantages may be
organizational, human or financial and their advantages are conferred based on their rareness,
uniqueness and value. Resource Based Theory emphasizes that competitive advantage in organizations
is determined through proper planning and functioning of procurement. A resource becomes a
competitive advantage when it is inimitable. If all organizations in an industry have the same resources
there would not be any competitive advantage available Cool et al (2002). Resource efficiency enables
procurement achieve more with less.
According to Barney (1991), resources enable firms improve efficiency and save on unnecessary costs.
Procurement practices should be uncommon and difficult to imitate, for example sourcing processes.
Third objective.

2.3 EMPIRICAL STUDY
2.3.1 Procurement and organizational performance

Organizational performance is measured by how an organization realizes its objectives, including
increasing productivity and reduction of inventory in the short-run and increasing market share in the
longer duration. Performance in procurement is linked to resources having naturally different levels of
efficiency that enable firms to deliver in a better way to their customers at a given cost or have the same
benefit at a lower cost, Barney (2003). Organizational performance here is compared to performance of
other organizations in the same industry. Organizational performance can be measured using return on
investment and increase in market share. Specifications and procurement highly depend on each other.
Poor specifications lead to many pitfalls and obstacles for the purchasing department. Quality
specifications should include the minimum basic requirements for the consumer, transparent
procurement process, assessment of goods to ensure they meet the minimum standards and fair award at
the lowest possible cost, Edvardsson (1998). Identifying the minimum basic requirements of the end
user, allows for a transparent process of procuring products or services and assessment to ensure
specifications are met are the least possible total cost. Savings in procurement are achieved through
better supply chain management and professionalization of the procurement function within
organizations. Procurement activities anticipate requirements, source and monitor supplies and this in
turn contributes to better organizational performance. Successful procurement practices are those that
meet the end user’s requirement and value with the available resources. Manpower with effective
management skills who follow ethical purchasing procedures and guidelines will ensure successful
quality and service delivery to all the stakeholders; for this to be achieved, objectives have to be clear
and highest quality standards maintained. Proper qualifications of staff in the procurement department
assists in the drafting of correct specifications, this in turn will ensure the organization receives the
better quality products, Lysons and Gillingham, (2003).
2.3.2 Procurement Performance
A procurement system is also a really vital part of a company's supply chain system. Typically, an
organizations procurement performance is split into strategic and operational processes since activities
and priorities in these two areas are entirely fully completely different (Turban, 2000), supplier
management, the pooling of purchase requisitions and procurance-oriented development are tasks that
are typically appointed to strategic procurement. Delaney and Huselid (2006) propose that
organizational performance is usually evaluated by quality service and products, satisfying customers,
market performance, service innovations, and employee relationships. On the other hand, (Hoque and
James, 2000) in their study of organizational performance supported balanced scorecard, declared that
structure performance area unit typically appraised by come of investment, margin on sales, capability
utilization, client satisfaction and product quality at intervals a similar approach, (Green and Inman,
2007) known that return on investment, sales and market growth, and profit are necessary factors which
can be measured by organizational performance. Altogether these performance measures, procurance
practices have a positive relationship or usually have a control on the extent of organizational
performance
Smith and Conway (1993) identified seven key success factors which influence procurement, namely; a
clear procurement strategy, effective management information and control systems, development of

expertise, a role in corporate management, an entrepreneurial and proactive approach, co-ordination and
focused efforts. An eighth is fundamental; communicate the key success factors to all levels of the
organization and set out a procurement strategy to achieve continuous improvement in value for money.
This should be based on total cost, quality, and enhancement of competitiveness of suppliers using best
procurement practice. Supplier performance has an impact on procurement performance. According to
Leenders and Fearon (2002), decisions to buy instead of make to improve quality, lower inventories,
integrate supplier and buyer systems, and create co-operative relations underline need for good supplier
performance. Recent trends are to fewer suppliers; long-term contracts, e-procurement, and continuing
improvement in quality, price, and service require closer co-ordination and communication between key
procurement partners. Supplier switching for lower prices may not result in the best long-term value.
Sharing information and assisting suppliers to improve performance is a necessity for world-class
performance. There is need to have coherent methods of performance in the procurement function in
PEs. Lardenoije, van Raaij and van Weele (2005) asserted that basing on financial performance and
neglecting non-financial performance cannot improve the procurement operations because only partial
performance is considered. Realization of procurement goals is influenced by internal and external
forces. Interactions between various elements; professionalism, staffing levels and budget resources,
procurement organizational structure, regulations, rules, and guidance, and internal control policies, all
need attention and influence procurement performance. Christopher (2005) distinguished features of a
responsive organization. Major transformations are; from functions to process, profit to performance,
products to customers, inventory to information, and transactions to relationships. Critical measures of
procurement performance need to be continuously monitored. The idea of ‘Key Performance Indicators’
(KPI) framework suggests that whereas there are many measures of procurement performance to be
deployed in an organization, only a small number of critical dimensions contribute more than
proportionately to success or failure. A balanced scorecard can provide guidance on critical areas where
action may be needed to ensure achievement of goals. Three key outcomes of success are: better, faster,
and cheaper. The goals combine customer-based measures of performance in terms of total quality with
internal measures of resource and asset utilization. Benchmarking helps identify current best practice
and then focuses on how processes could be reengineered and managed to achieve excellence in critical
procurement areas. Emphasis should be on search for strategies that provide superior value in the eyes of
customers seeking greater responsiveness and reliability. Van Weele (2006) maintained that there is a
link between procurement process, efficiency, effectiveness and performance. Procurement performance
starts from purchasing efficiency and effectiveness in the procurement function in order to change from
being reactive to being proactive to attain set performance levels in an entity. Performance provides the
basis for an organization to assess how well it is progressing towards its predetermined objectives,
identifies areas of strengths and weaknesses and decides on future initiatives with the goal of how to
initiate performance improvements. Procurement performance is not an end in itself but a means to
control and monitor the procurement function. For any organization to change its focus and become
more competitive, performance is a key driver to improving quality of services. Batenburg and
Versendaal (2006) noted that use of inappropriate means can be a barrier to change and may lead to
deterioration of procurement operations. Organizations which do not have performance means in their
processes, procedures, and plans experience lower performance and higher customer dissatisfaction and
employee turnover. Measuring procurement performance yields benefits to organizations such as cost
reduction, enhanced profitability, assured supplies, quality improvements and competitive advantage.
Electronic processes have replaced physical and paper-based processes. E-procurement moves
tendering, negotiation and purchasing processes to websites. Improvement to a PE’s procurement
performance can be realized through reduced costs and wider choice availed.
Therefore, a good procurement system is significant to an effective organization's supply chain
system. The sign to system performance in meeting its supposed goals in service sector is characterized
by adequate management of the procurement function. Best procurement practices improve efficiency
and effectiveness of a company that interprets to an improvement of its overall performance. Essential
Procurement KPIs What are procurement KPIs?
Procurement KPIs are a type of performance measurement tool that are used to evaluate and monitor the
efficiency of an organization’s procurement management. These KPIs help an organization optimize and
regulate spending, quality, time, and cost.
Additionally, procurement KPIs help businesses keep pace with their overall process goals, procurement
strategies, and business objectives.
Why measure the efficiency of your procurement process?
The saying “If you cannot measure it, you cannot improve it” holds as true as ever. Measuring the
efficiency of a procurement process is important, as it plays a critical role in the supply chain in the case
of an economic downturn. A great way to improve procurement efficiency is to automate.
While cost savings are an obvious objective of procurement performance, it is not just restricted to that.
By measuring the performance of a procurement process, organizations can find answers to other
important questions like:
What needs to be improved?
How do we compare with other organizations?
Are we improving or declining?
Depending on their purpose, these procurement KPIs can be split into three major categories: ensure
quality, improve delivery, and deliver savings. All three categories are interdependent, so focusing on
just one category might harm the other two and decrease the process sustainability. 1. Quality KPIs:
Ensure quality
a) Compliance rate
Contractual and policy compliance are pivotal to ensuring legal security. If these compliance rates dip
down, they can spike up indirect and maverick spend. A foolproof purchasing contract with clearly
defined penalties can improve the compliance rate Metrics to note:
The ratio of disputed invoices to total invoices
The total difference between the price paid and the price quoted
Supplier defect rate
Supplier defect rate is used to evaluate a supplier’s individual quality. Measuring supplier defect rates
and breaking them down based on the defect type will offer actionable insights into a supplier’s
trustworthiness. Supplier defect rates are usually measured in defects per million.
Supplier defect rate= Number of substandard products/Total number of units tested c)
PO accuracy

Low PO accuracy hikes up operating costs. Procurement KPIs are measured across supply categories,
buyer segments, and more. This metric will help businesses ensure whether suppliers are delivering
what was ordered and if it was delivered at the right time.
d) Indicators to track:
The ratio of product/service delivered outside the pre-defined service target

% of erroneous delivery over the total number of purchase orders in a period of time
2. Delivery KPIs: Improve delivery

a) Rate of emergency purchases
Emergency purchases are those unplanned orders which are acquired to prevent the shortage of
products/services. This metric is measured with the ratio of emergency purchases to the total number of
purchases over a fixed period of time.
By lowering the rate of emergency orders, organizations can:
Save costs
Improve procurement plan
Reduce supply risks
Ensure continuity
Supplier lead time
Supplier lead time is the amount of time that elapses between the time a supplier receives an order and
the time when the order is shipped. This KPI is often measured in days. Vendor lead time starts with
availability confirmation and ordering and ends with the delivery of goods.
Supplier lead time = Delivery time (Goods and receipts delivery) – Order time (PO acceptance) c)
Purchase order cycle time
Purchase order cycle time is measured in hours or days from the time a purchase requisition is submitted
to the time when it is transmitted to a vendor or contractor. This KPI covers the end-toend ordering
process which makes up the whole purchase order cycle. d) Vendor availability
Vendor availability is used to measure a vendor’s capacity to respond to emergency demands. This
procurement KPI helps organizations determine the degree of reliability they can place on a vendor.
Vendor availability (%) is measured by the ratio of the number of time items available on a vendor’s
side to the number of orders placed with the supplier.
3. Cost-Saving KPIs: Receive savings
a) Cost per invoice and purchase order side

The cost spent per invoice and purchase order can vary from one organization to another depending on
the factors that are included in this calculation. An organization that follows a manual approach will
have higher processing costs when compared to other organizations that use an automated process.
Spend under management
Spend under management is the percentage of procurement spend that is regulated or controlled by the
management. As an organization’s spend under management rises up, its ability to optimize cost and
forecast expense increases with it.

SUM = Total approved spend (i.e., direct, indirect, and service-related cost) – Maverick spend c)
Procurement ROI
Procurement ROI is used to determine the profitability and cost-effectiveness of the procurement
investment. This metric is best suited for internal analysis. Procurement ROI = Annual cost savings /
Annual procurement cost
d) Price competitiveness
Little to no competition among vendors can lead to a place where a few suppliers enjoy a monopoly.
This can lower quality over the long run. Here the emphasis is placed on shortlisting vendors that offer
the buyer a distinct competitive advantage.
Price competitiveness can be measured by comparing the price paid with the published market prices
listed on procurement market intelligent sites like Beroe Inc.
It also gives procurement leaders the ability to create custom reports that show key metrics like PO cycle
time, the rate of emergency purchases, and the annual procurement savings to annual procurement costs.
Records Management Systems and Procurement Performance
Records, asserted Thurston (2002), are critical to the operations of any organization. No entity can
operate successfully if it relies on human memory alone to keep trail of her transactions. Procurement
records are a vital resource to any organization that strives to conduct operations effectively.
Organizations need accurate and accessible records that are tamper-free, original, reliable and able to
reveal institutional memory for informed decision making. PEs should strictly comply with
documentation, recording, minuting and filing requirements. The documentation should be kept in
orderly, accessible and clean conditions. Sound RMS is a vital aspect of ensuring transparency,
accountability and responsibility in the procurement process. It can reducevulnerability to legal
challenge on financial loss and promote efficiency in terms of human and space resources through
greater coordination of the information use, maintenance and control. Procurement RM aims at
addressing weaknesses and provides guidance and direction for best practices. David (2005) opined on
the future of managing electronic records, which is complex and goes beyond the procurement of a
RMS. He contended that firms need an understanding of current ICT trends and business processes and
must accept that records systems are products of the moment. The future lies in electronic systems that
are more recent in business logic and more useful in business support. Management of electronic records
must not be confused with the procurement of document management systems. For any positive
contribution to procurement performance, PEs must ensure that records are available to provide
documentary evidence of conformity to the requirements of an effective management system.
Procurement Procedures and Procurement Performance

Procedures are operating instructions detailing functional duties or tasks. According to Saunders
(1997), the division between public and private sectors creates two different worlds, requiring different
approaches to procurement. Public ownership imposes obligations with regard to public accountability,
leading to prescribed procedures and policies. All steps of the procurement cycle must be properly
documented with each step being approved by the designated authority. Baily, Farmer, Jessop and Jones
(2005) argued that public procurement procedures tend to be characterized by high levels of bureaucracy
independent of order value; poor communications and focusing on unit price rather than long-term

relations. Procurement perceptions are affected by the existing organizational structure, quality of
internal communication system, past experience and resources available. A procurement policy may
define the approval process for contracts of varying cost levels and may include role of purchasing,
conduct of procurement staff, buyer-seller relationships, and operational issues. Without elaborate and
effective procurement procedures Government policy objectives would fail to meet the desired
objectives. Lysons (2006) defined tendering as a purchasing procedure whereby potential suppliers are
invited to make a firm and unequivocal offer of the price and terms, which on acceptance shall be the
basis of the subsequent contract. Organizations need standard procurement procedures which cover all
aspects of the procurement cycle, including supplier selection, contract negotiations, order placement
and payment. These are used to control spending activity, ensure appropriate approvals are in place and
reduce the risk of overpayment. An appropriate approval process involves a separation of tasks and the
involvement of senior managers for transactions that cost more than a specific price for enhanced
procurement performance. Nicholas, Michael and Simone (2008), explored whether opportunities for
fraud and corruption might be reduced or increased by rules governing public procurement. They
focused on specific European legislation – Procurement Directive 2004/18 on the coordination of
procedures for the award of contracts for public works, public supply and public services by public
bodies within all EU Member States. They concluded that fraud risks in public procurement may be
summarized in terms of insider-driven specifications, low visibility of procurement processes, and
ample opportunities for renegotiation of terms. Risks may be increased by innovative procurement
practices that have the effect of extending the maneuvering between tenderers and public bodies, such as
competitive dialogue. Thus, traditional procedures are becoming obsolete in modern organizations.
Procedures provide guidance that staffs follow in performing activities, put constraints on behavior and
show how the procurement function should work to achieve strategic objectives.

CHAPTER THREE: METHODOLOGY

AND INTERNSHIP ACTIVITIES
This chapter provides an overview of the choices made regarding the research approach, strategy
and method for this work. A detailed description of the data collection and analysis process for gaining
empirical material is presented. In the end, the quality of the present study is evaluated.
3.1 METHOD OF DATA COLLECTION
In accomplishing this research work, both the primary and secondary sources of data collection were
used.
Primary Source of Data Collection
The two main instruments of primary data collection are; observation and questionnaires. a)
Observation:
Observation involved the gathering of information from staff by taking note of how they react to
particular situations. There are two types of observation used during this work were active observation
(which involves taking part in the activities of the organization while doing the research) and passive
observation (which is the direct interaction of the researcher with the issue under study through note
taking and jotters). These observation types were very relevant to the topic.
b) Questionnaire
This is a document containing a set of questions that are asked to a number of respondents as a means of
gathering information for the purpose of the research work. The researcher used 25 questionnaires which
were closed ended. It was divides in to two sections. Structured and unstructured questions saves on
time and are easier to analyze. Questionnaires are efficient, cheap and easy to be administered.
Secondary Source of Data Collection
The secondary source of data used was articles from the internet and documents from the
computer like passed projects.
a. Internet
The internet served as a very essential search engine or tool for this research work. Very important
information and references were gotten from this source and this helped guide this work to the end.
b. Documents from the NATIONAL HYDROCARBONS CORPORATIONS.
Documents such as Inventory reports, magazines and registers were used for this piece of work.
3.2 TECHNIQUE /TOOLS FOR DATA COLLECTION
The study used Stratified Random sampling techniques. This is an estimate with precision. This is a
sampling technique that relies on probability where the whole population is divided into subsections,
then unsystematically selecting the final topics uniformly from unlike sections. Kothari (2004) states
samples of approximately 10% can provide useful reliability. The sample selected was more than 50%
of the entire population and therefore ample for the study. This technique has a high statistical accuracy
which saves on time and resources. The reason behind using the techniques is that the study focuses to
include respondents from different department which include; Procurement, Fleet management,
Warehouse, Security and maintenance, Finance and Budget.
3.3 POPULATION OF THE STUDY
This is the precise population on which data is needed and in this case they are members of staff
from the General Affairs division (DAG); Procurement section, Fleet management section, Warehouse,
Security and Maintenance and the staff from the Finance Department (DFI), Budget and Control
division (DBC) which regulates purchases against budget in the NATIONAL HYDROCARBONS
CORPORATION (NHC).
In this study, the target populations are employees of the National hydrocarbons Corporation (NHC),
particularly the staff those who are working in the Procurement Department as well as supporting staff
which sum up to about 30. The total populations of individual which are targeted to sample are 30 staff
that include the programs operational field office staff.
3.4. SAMPLING TECHNIQUES/ PROCEDURES
The sample size of this study is 25 staff members which were picked out from the 30 which is the
total population of the study.
3.5 METHOD OF DATA ANALYSIS

The data used in this research work will be logically be arranged, presented and analysis using
graphs, charts and tables so as to better comprehend the idea in to the reader’s minds. This method is chosen
to present data because it is flexible in nature and easily understandable by the readers. Hence pie charts will
be used after the table to show the vivid example of the data collected and presented on the table. Here, we
are going to use the random sampling method.
This will give use a clear cut of different points of the workers involved in the implementation of
warehousing process to freight forwarders. This random selection will be done in various groups as such
element or actor in each group has equal chances of responding to the question asked. Descriptive statistics
provide adequate and valuable information which is easily understood.
3.2.0 Internship (Introduction)
This part of the work will be all about our internship and the internship activities.
Activities of the organization
• SNH identifies areas of the mining domain which by virtue of their characteristic are likely to
contain crude oil or natural as deposits, demarcates such areas and puts them on promotion. With
respect to this, it launches invitations to tender aimed at prospecting possible hydrocarbons deposits
in the subsoil or seabed of the Cameron mining domain.
• In corporation with all the administrations involved, SNH leads contract negotiations with partners
that have expressed interest in the zones on promotion (called blocks) and have proven experience in
the hydrocarbons sector. In case of successful negotiations, SNH and the ministry of Mines, industry
and Technological Development (MINMIDT) sign contracts with the bidders on behalf of
Cameroon.
• SNH monitors the activities of oil companies, with particular emphasis with the subscribed works
program and the legal provisions on environmental protection. Oil activities are conducted within
petroleum associations by one of the partners, appointed “operator”.
• SNH explores and sells crude hydrocarbons. The sale of crude oil derivatives available in filling
stations is ensured by marketers, such as its share company TRADEX
• SNH transfers to the Public treasury income derived from the sale of hydrocarbons, after deducing
production costs. In fact, under the provisions of the Cameron petroleum Code, the state does not
take financial risks during hydrocarbons exploration phase, the risk is borne by oil companies alone.
• SNH contributes to the improvement of the legal frame work governing the hydrocarbons sector,
by tabling bills to the government.
• Sells share of hydrocarbons production accruing to it as a full-fledged investor in some petroleum
associations
• Promotion of the national mining domain;
• Negotiation of oil and gas contracts, in cooperation with the competent public administrations;
• Monitoring the implementation of oil and gas contracts between the State and companies operating
in the hydrocarbons sector;
• Exploitation of oil fields in association or sole risk;
• Monitoring of crude oil loading operations at terminals;
• Marketing the share of national hydrocarbons production accruing to the State;
• Implementation of gas projects aimed notably at the increase of national electricity supply, in a bid
to support the development of the industrial fabric; Management of security stocks of petroleum
products;
• Conduct of studies and execution of various projects related to its missions in the oil, gas,
parapetroleum, as well as related sectors.
3.2.1 INTERNSHIP ACTIVITIES

Purchase orders were established in order for the suppliers to know the needs or requirements of various
departments in SNH and her sites such as those of Mvia, Bipaga Mpolongwe and R/SNH Douala. b.
Bill Payment Requests
Bill payment requests were established in order to give the order to the financial department for the
payment of the goods and services offered by the suppliers at the end of their contract. This was only
done when the supplier deposits the original copy of the Purchase order, original copy of the invoice or
bill, tax payer’s attestation and many other documents.

C. Request for Funds
This is a document which permits the disbursement of funds for the purchase or rendering of a particular
service.
It is done on the exceptional occasions which are;
• Request by a department in need and has proof
• Reimbursement of expenses incurred by the employees which needs to be
accompanied by supporting documents or receipts
• Payment to suppliers who expressively request to be paid cash in hand.
d. Archiving
Archiving is a very important function in SNH as they are very rigorous about their
accountability. As a very strategic and fragile company, her level of accountability is very
important. Two types of archiving were done; numerical and physical. Numerical with the
use of scanners by scanning the document and physical by preserving copies of the
important documents being produced by the procurement department.

ORGANISATION/DATAPRESENTATION
AND ANALYSIS
4.0. THE ORGANISATION (INTRODUCTION)

This research is a piece of research work which seeks to transform the collected data in to
numerical values and representations for better understanding of the data collected within the research. Thus
more meaning will be given to the data and their percentages analyzed accordingly.
The research totally distributed 25 questionnaires for management bodies. In this ways major findings of
the study summarized, conclude and recommend in chapter five.
4.1.1 THE HISTORY OF THE ORGANISATION

The National Hydrocarbons Corporation is a public company with financial autonomy. It was created on
the 12th March 1980 and has a registered capital of 8 000 000 000 CFAF.
Management based on principles of good governance
SNH is a member of the National Committee for the follow-up and implementation of principles of the
Extractive Industries Transparency Initiative (EITI), which aims at judicious use by governments, of
revenues from the extractive sector.
The management of SNH is participatory and objective-oriented, following a guideline summarized in
three watchwords:
- Professionalism, - Integrity, - Sense of common interest.
An expanding portfolio
As an expanding group, SNH has been diversifying its activities since 1994. Its portfolio includes 12
share companies operating in the petroleum, para-petroleum and related sectors.
Table 1: NHC expanding portfolio
Companies Branch of activity SNH Share
Hydrocarbures Analyses Quality control 97.57%

Contrôles (HYDRAC)
Société de trading et d’exportation de pétrole brut et Trading 54%
de produits pétroliers (TRADEX)
Chanas Assurances S.A. Insurance 45.26%
Cameroon Oil Terminal Storage of crude oil 46.5%

S.A. (COTSA)

Cameroon Shipyard and Industrial Engineering Ship repair 20%
Ltd (CNIC)
Addax Petroleum Exploration/production of 15%

hydrocarbons
Cameroon Company
Perenco Rio Del Rey 20%
(Perenco RDR)
Perenco Cameroon S.A. 20%
(PERCAM
Cameroon Co mpany of Depots Storage of petroleum products 15%
Petroleum
(SCDP)
Cameroon Hotels Hotel industry 6.21%
Corporation (CHC -
Hilton)
National Refining Crude oil refining 6.06%
Company Ltd
(SONARA)
Cameroon Oil Crude oil transportation 5.17%
Transportation Company
(COTCO)
SNH, a key player in sustainable development

1. Environmental protection
SNH ensures strict compliance with legal provisions in this domain. Therefore, all activities carried out
by the company and its partners in the exploration and production of hydrocarbons are subject to a prior
environmental impact assessment, which presents in particular the incidence of such activities on the
environment and the mitigating measures envisaged for the preservation of the ecosystem balance.
Moreover, SNH implements a National Oil Spill Contingency Plan, through the Pipeline Steering and
Monitoring Committee. SNH’s commitment to environmental protection is also reflected in its
involvement in international initiatives. Thus, the company strives to reduce the amount of gas flared on
oil platforms and released into the atmosphere. To this end, SNH signed a partnership agreement with
the World Bank, on the funding of the Global Gas Flaring Reduction Partnership (GGFR). Moreover,
SNH is a member of the International Petroleum Industry Environmental Conservation Association
(IPIECA) and the International Oil Pollution Compensation Funds (IOPC Funds).
2. Youth training
For many decades, SNH has contributed to youth training by supplying books to libraries and
multimedia centers of secondary schools in Cameroon. This has had very positive effects in rural areas
in particular, where the low purchasing power does not permit students to have books, including
textbooks. Moreover, the company contributes to the professionalization of teaching in the oil sector. In
this regard, it has put in place a computerized petroleum geosciences laboratory in the University of
Douala, in partnership with the Schlumberger oil service company, at a total cost of about 1.5 billion
CFAF. SNH is conducting a project to extend this experience to various academic institutions in Kaele,
Meïganga, Yaoundé, Douala, Dschang, Bamenda and Buea.
3. Support for the preservation of cultural heritage
SNH’s civic commitment is also reflected in its sponsorship of various initiatives in the area of culture,
notably the heritage festivals organized in Cameroon.
4. Infrastructure development
SNH has developed water points and built or rehabilitated roads in areas where oil operations are
conducted.
5. Standing by employees
SNH endeavors to create a working environment in which employees have the necessary skills and tools
to enable them to effectively carry out their work in pleasant and secure conditions, so that they can
return home safe and sound at the end of the day. Thus, SNH set up a Commission for Occupational
Health and Safety (CSST) and a Fire Safety Unit (CSI), responsible for informing the staff and
developing their skills regarding occupational health and safety measures. In addition, the staff also
benefit from a range of facilities intended to foster their physical and intellectual well-being. These
include the Hydrocarbons Sports and Cultural Association (ASCH) and the Solidarity Fund of the SNH
Group staff. In addition, a Social Fund guarantees a retirement gratuity to retired staff and a death
benefit to the dependents of workers who dies in the course of their employment.
6. Support to sport
As one of the major sponsors of Cameroon’s cycling, SNH has contributed to the revival of this activity
in the country. Similarly, the company participates in the development of golf, by sponsoring
competitions organized in this discipline.
4.1.2 Organizational Chart of NHC.
An Organizational Chart can be referred to as a diagrammatical representation of the hierarchical structure of
an organization. It helps to have the different functions and responsibilities each person has in an enterprise.

Figure 2: Organisational structure of NHC
4.1.3 Description of the Organizational Chart

A. Exploration Division (DEX)
It is notably responsible for the formulation and implementation of the SNH hydrocarbons
exploration policy. As such, it seeks partners to develop the mining domain, and then monitors and
inspects prospecting and exploration activities carried out by oil companies in Cameroon.
B. Petroleum Information Centre (CIP)
Its main missions are to collect, store and market data generated by exploration/production
activities (oil wells, seismic acquisitions and analyses, technical studies, etc.). CIP is also
responsible for updating maps of the mining domain and ensuring the marketing of data. It notably
manages a mapping portal, which gives remote access to collected data, and coordinates the setting
up of a storage Centre for samples originating from oil and gas wells (CSEF) in the outskirts of
Douala.
C. Gas Division (DGZ)
DGZ is notably in charge of formulating the company’s policy on the development of natural
gas. To this end, it designs, updates and implements the Master Plan for the development of national
gas resources, notably in the domains of electricity, Petro chemistry and supply to industries and
households. This division is also responsible for conducting studies necessary to promote the use of
natural gas as a source of energy or industrial feedstock, and for promoting, monitoring and
controlling activities aimed at the development of gas projects.
Moreover, DGZ contributes to the preparation of files for the negotiation of agreements, contracts
and other conventions for the sale of natural gas or other by-products jointly with the Marketing
Division, and ensures that operators in the hydrocarbons sector comply with gas legislation.
D. Marketing Division (DCO)
DCO is responsible for marketing, on the international market, the share of national
hydrocarbons (oil and gas) production accruing to the State, as well as SNH‟s own share as an
investor. Moreover, DCO follows up all problems related to the distribution and marketing of
petroleum products throughout the national territory. Jointly with the competent administrations, it
contributes to the formulation of regulations and implementation by the State of its downstream
sector management policy.
E. Financial Division (DFI)
DFI is mainly responsible for managing funds and keeping the books of SNH (general
accounting and cost accounting); keeping the books of State-mandated activities; inspecting and
auditing the books of associates jointly with the competent units; effecting payments of all
operations; managing the portfolio of SNH share companies.
F. Budget and Control Division (DBC)
DBC is notably responsible for budget preparation and follow-up, management inspection and
internal audit of the company.
G. Planning and Development Division (DSD)
The missions of DSD are, among others, to carry out any studies necessary to evaluate the
economic impact of policies advocated or decisions envisaged by SNH; to formulate objectives and
formalize choices and strategic orientations aiming at the long-term viability and profitability of
SNH; to conduct economic and profitability studies on investment projects initiated by the company.
H. Human Resources Division (DRH)
DRH is notably responsible for implementing the human resource management policy. As
such, it draws up procedures for recruitment, training and career management and puts in place
procedures for the evaluation of workers. Moreover, it prepares and follows up workers‟ pay, jointly
with the competent units.
I. General Affairs Division (DAG)

DAG is responsible for planning, putting in place and managing the material resources
required for the proper functioning of SNH; organizing and managing logistics; ensuring the
maintenance of movable and real estate property; ensuring the maintenance of rolling and operating
equipment. J. Legal Division (JUR)
The missions of JUR are among others, to ensure compliance with laws in the conduct of
business within SNH. It gives legal opinion on all important matters referred to it, studies and draws
up draft legal and regulatory texts, prepares files in defense of the Corporation in court. Moreover, it
negotiates, draws up and manages all corporate insurance contracts, as well as any other contracts
between SNH and third parties.
K.Computer Division (DI)
DI is responsible, among others, for counselling Management in the implementation of the
Computer Master Plan and enforcing the decisions of the Computer Management Committee. DI
defines the norms and methods of SNH computer developments. Jointly with operational units, it
installs and manages data bases relating to the different SNH information subsystems. The
management of all computer equipment and follow up of their maintenance are also part of its
responsibilities.

L. Communication Division (COM)
COM is notably responsible for counselling and assisting Management and units of the
company in the area of communication; the internal and external communication of SNH;
promotion of its corporate image; current translation of documents; management of the
documentation center and archives.
M. SNH Douala Branch (R/SNH-Dla)
R/SNH-Dla is responsible, among others, for representing SNH with administrations,
companies and/or organizations based in Douala. It also contributes to the influence of SNH as well
as the promotion of its corporate image; organizing, at the request of the head office, the logistics
and reception of SNH guests in Douala or neighboring towns; collecting data for the needs of head
office units; monitoring and inspecting crude oil lifting.
N. Pipeline Steering and Monitoring Committee (CPSP)
This inter-ministerial structure is notably in charge of coordinating the interventions of
Cameroonian administrations within the framework of construction, exploitation and maintenance
of pipelines. Placed under the authority of SNH, whose Executive General Manager is the
chairperson, CPSP has monitored, since its creation in 1997, the construction and exploitation of the
Chad-Cameroon pipeline. In addition, CPSP has been carrying out the administrative supervision
and technical inspection of the Bipaga-Mpolongwe (Kribi) and Logbaba-industries (Douala) gas
pipelines since 2012.
O. Production Division (DPR)
Its missions are, among others, to formulate and implement the SNH hydrocarbons production policy.
• It promotes, monitors and inspects development, exploitation and production activities.
Within this framework, it manages petroleum associations and controls the costs of operations
carried out by the latter.
• Monitors and controls the costs of oil operations
• Studied the invoices and calls for funds presented by the operators
• Carries out studies and investigations aimed at controlling the drainage mechanisms of
deposits in order to improve their productivity.
4.2.0 DATA PRESENTATION
General Information of Respondents
To find out general information of respondents, the study asked the following basic
demographic characteristics. The results obtained from the structured questionnaires are
represented on tables and figures below.
4.2.1 DATA ANALYSIS/RESULTS
Response Rate
The researcher circulated 30 questionnaires, and 25 of the 30 sampled respondents completed and gave
back the questionnaires, contributing to an 83.3% response. A rate of response greater than 60% is
considered satisfactory and good for analysis, (Mugenda & Mugenda, 2003). The lack of response for
some of the questionnaires could be due to the lack of spare time in the busy environments the
respondents operate in. Responses were obtained, analyzed and presented in tables, graphs and charts for
ease of presentation.
Table 3: Response Rate
CATEGORY Frequency(Fi) Percentage (%)
Response 25 83.3
Non response 05 16.7
Total 30 100
17%
Response
Non Response
83%
Figure 3: Graphical Representation of Response Rate
4.1.2 Distribution of Respondents by Gender

The outcomes of this research showed that 56 percent of the population sampled were male and 44
percent of employees who responded were female.
Table 4:Distribution of Respondents by Gender
GENDER Frequency(Fi) Percentage (%)
Male 14 56
Female 11 44
Total 25 100
FEMALE
44% MALE MALE
56% FEMALE

Figure 4: Graphical Representation Distribution of Respondents by Gender
4.1.3 Distribution of Respondents by Age

The respondents in this research were asked about their age under one of the four categories mentioned
below, from 20 to above 40 years. The outcomes were as follows; Table 5: Distribution of
Respondents by Age
AGE Frequency(Fi) Percentage (%)
20-30 Years 14 56
31-40 Years 9 36
Over 40 Years 02 08
Total 25 100
8%
20-30 years
36% 56% 31-40 years
Over 40 years
Figure 5: Distribution of Respondents by Age
4.1.4 Distribution of Respondents by Academic Qualifications

The results from academic qualifications showed that 40 percent had Diplomas, 44 percent had First
degrees and 16 percent had Postgraduate degrees. This high level of qualification ensured the
procurement department performed efficiently and effectively by using resources in an environmentally
friendly manner and keeping away unnecessary expenses.
Table 5: Distribution of Respondents by Academic qualification
College diploma 10 40
First Degree (BSc, BA) 11 44
Second Degree (MSc, MA) 04 16
Total 25 100

1%
4%
College
First Degree (BSc,
Second Degree (MSc,
4%
Figure 6: Distribution of Respondents by Academic qualification
4.1.5 Distribution of Respondents by Work Experience

The length of continuous service by the respondents were as follows; 08 percent have been working for
less than 2 years, 60 percent have been working between 2-5 years, 20 percent for 610 years and 12
percent have been working for more than 10 years. This means 92 percent of members of staff have
been employed by the company for over 3 years and have fully understood the operations of the
institution. This ensures less training by the company and employees perform better with less
supervision as they are now used to the tasks they perform.
Table 6: Distribution of Respondents by Work experience
Under 2 Years 02 08
2-5 Years 15 60
6-10 Years 05 20
Over 10 Years 03 12
Total 25 100

12% 8%
20% Under 2 Years

2-5 Years
6-10 Years
60%
Over 10 Years
Figure 7: Distribution of Respondents by Work experience

CHAPTER FIVE:
SUMMARY/CONCLUSION AND
RECOMMENDATIONS
5.0 INTRODUCTION
This chapter presents the discussion, conclusion and recommendations and areas for further research. The
first section demonstrates discussions according to the objectives of the study. The second section brings
conclusions drawn from the discussions and the third section is on the recommendations from the
conclusions drawn and lastly the possible areas for further research.
5.1 SUMMARY OF FINDINGS
This chapter presents a summary of the findings, conclusions and recommendations made to help
improve the performance of the procurement function and the organization as a whole based on the
objectives of the study.
Records Management System and Information Communications Technology
Our first objective was to evaluate the extent to which Records Management Systems and
Information Communications Technology impact procurement performance of an organization. It was
seen that; 92% of the respondents agree that RMS and ICT tools make the procurement process faster
and cheaper, 8% are undecided and none disagreed. All of the respondents believed that ICT tools have
brought about reduction in paper work. 80% of the respondents believed that ICT tools have helped in
the reduction of lead times, 12% are undecided and 8% disagree.88% of the respondents acknowledge
that ICT has brought about satisfaction to all stakeholders, 12% are undecided and none disagree. All
the respondents agree that RMS and ICT tools have brought about transparency, accountability and
responsibility during the procurement process.
However, the National Hydrocarbons Corporation recorded significant streamlining milestones in
records management. It recognized that effective procurement records systems promote working
interfaces with key stakeholders in the supply chain.
It is deduced that RMS ensure transparency, accountability and responsibility in the procurement
process. The absence of adequate RMS and records storage space inadequacy was a challenge at the
National Hydrocarbons Corporation.
Also, procurement systems were still largely manual, neither streamlined nor automated. This resulted in
efficiency and losses. ICT enables systems integration, promotes transparency, accountability, reliability
and enhancement of relationship management. Staff members are yet to benefit from attendant ICT use
and adoption. Thus, ICT has reduced paper work, has reduced the lead times, has brought satisfaction to
all stakeholders and has made the procurement process faster and cheaper.

Staff Qualifications
The second objective was to determine the contribution of staff qualifications to procurement
performance in an organization. It was seen that; above 88% of the respondents agree that staff
qualification enable the staff to perform and make better decisions, work as a team and adapt to change,
12% are undecided and none disagreed. All of the respondents believe that staff qualification increases
efficiency, quality and productivity. All of the respondents believed that staff qualification leads to
creation and more innovation thus improving the performance of the organization.
The National Hydrocarbons Corporation practices staff promotion system that is accords first priority to
internally qualified staff. This has enabled many procurement professionals to progressively go up
career ladder. Majority of the respondents were qualified for effective management of the procurement
function. Further findings on years of experience indicated that very few officers participating in the
procurement function in the National Hydrocarbons Corporation had long working experience. In
summary, majority of the respondents were in consonance on the importance of all the factors studied on
the public procurement performance.
The results of the current study were in terms with past studies in the subject area
Procurement Procedures
Our last objective was to determine how procurement procedures affect the performance of an
organization. It was seen that; above, all of the respondents agree that punishment of corrupt behavior
contributes to higher performance by purchasing staff. All of the respondents believe that strict codes of
conduct ensure purchasing procedures are followed. 96% of the respondents believed that procurement
perceptions are affected by the existing organizational structure, quality of internal communication
system, past experience and resources available. All the respondents agree that public procurement
procedures tend to be characterized by high levels of bureaucracy independent of order value, poor
communications and focusing on unit price rather than long-term relations
Management of procurement life cycle at the National Hydrocarbons Corporation was the main
dimension enhancing positive procurement performance. The implication of these results is that though
they seem positive in fast-tracking and facilitating life cycle time in procurement process, the attendant
weakness are subject to abuse by different stakeholders. The overall net effect was negative procurement
performance. This is because public procurement procedures tend to be characterized by high levels of
bureaucracy independent of order value, poor communications and focusing on unit price rather than
longterm relations. However, the National Hydrocarbons should be applauded for the strict codes of
conduct which ensure purchasing procedures are followed and the sanctioning of corrupt behavior which
has contributed to higher performance by purchasing staff.
5.2 RECOMMENDATIONS
In view of the research findings and taking cognizance of the need to accelerate ongoing reforms in
procurement, the following recommendations are preferred.
• To ensure enhance procurement performance records management systems should be installed,
adopted and should be accorded high organizational status.
• Digitization of all procurement records and networking with key players in the supply chain shall be
of great value.

• The National Hydrocarbons Corporation should also deepen reforms in the procurement with a view
of streamlining processes as well as automating. Activities and back office operations. The existing
procurement procedures need review with stakeholder involvement. The level of bureaucracy tend to
make the whole procurement process lengthy and less efficient.
• The organizational structure in which procurement function was embedded need be reformed to be
more flat in order to scale down bureaucracy and red-tape in the procurement process. Realignment
of procurement processes with key performance indicators such as performance contracts and
service charter will enhance service delivery at the National Hydrocarbons Corporation is further
recommended.
• Achieving the paradigm shift into ICT shall enable new frontiers of knowledge as well total
automation and streamlining of procurement functions is yet to be realized.
• Also, ICT has become an indispensable tool in procurement. Therefore, the National Hydrocarbons
Corporation needs to train the staff of the procurement department in order for them to be familiar
with the latest technologies in order to make their work easier.
• Procurement is a skilled profession that requires well trained people. The appropriate authorities
need to ensure that procurement function is managed by qualified staff to ensure performance.
Further research on other factors such as leadership, ethics, integrity and governance is
recommended.
5.4 DIFFICULTIES ENCOUNTERED
Limited Number of photocopy machines:

At the reprography, there was staff saturation which leads to a waste of time which has an impact
on the work Cold:
It was sometimes difficult to resist the cold that inhabits NHC. The air conditioning was really
strong too to such an extent that even in three months we could not get used to it.
Communication:
Personnel did not have a direct form of communication thus, there were misunderstandings at the
level of identifying their requirements and following up the procurement process. Poor
information flow:
The requirements or needs of the personnel were poorly followed up and information flow is
poor and faulty.
Language:
The most used language (documents, databases, software) was not the language in which I was
very comfortable, so I needed more time and patience to assimilate tasks.
5.2 CONCLUSION
Based on the summary of findings, the following conclusions were made:
 After rightfully determining which hypothesis the sample supports, the null hypothesis (Ho) is
rejected, as seen in our research the sample information favors the alternative hypothesis (Ha).

 Having motivated and well qualified staff and effective records management systems are crucial
for enhanced procurement performance.
 On the other hand, failure to automate procurement systems and non-adoption of ICT systems
impacted negatively on procurement performance.
 The study established that existing legal framework affects the efficiency of the procurement
function at the National Hydrocarbons Corporation. The study concludes that the loopholes in the
procurement reforms, monitoring and evaluation greatly influenced the efficiency of the
procurement function in the National Hydrocarbons Corporation.
 From the findings, the study concludes that staff competencies affect greatly the efficiency of
procurement function in the National Hydrocarbons Corporation. Hence, employees need to acquire
core competencies like knowledge, skills, experience and abilities to enhance procurement function
efficiency in the National Hydrocarbons Corporation.
 The study found out that organizations culture affects the public procurement function in the
National Hydrocarbons Corporation. Factors like political influence, fairness in awarding
procurement contracts, adherence in procedures, bureaucracy and corruption affect the efficiency of
the public procurement function at the National Hydrocarbons Corporation.
 The study concluded that the National Hydrocarbons Corporation did not embrace modern
technology in the procurement function (Efficient and effective procurement software). Hence it
implies that the procurement function do not completely benefit from its advantages of reduced cost
of holding stock, reduced paper work, increases transaction effectiveness, increases quality of
goods and services, reduced lead times and improved quality of decision making.
 The study also found out that proper procurement records management helps in giving authentic
and reliable information and has an impact in procurement function efficiency.

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APPENDIX
QUESTIONNAIRE
UNIVERSITY INSTITUTE OF TROPICS
DEPARTMENT OF LOGISTICS AND TRANSPORT MANAGEMENT
Dear respondents, I’m NOUKEU NJEUDJI AGATHE VALERIE a level 2 student at UNIVERSITY
INSTITUTE OF TROPICS in the Department of Logistics and Transport Management. Currently, I’m
conducting a research entitled ‘The impact of the procurement function on the performance of an
organization case of the National Hydrocarbons Corporation’ as a partial fulfillment of the requirements
for the higher national diploma in Logistics and Transport Management.
The purpose of this questionnaire is to gather data for the proposed study, and hence you are kindly
requested to assist the successful completion of the study by providing the necessary information. Your
participation is entirely voluntary and the questionnaire is completely anonymous. I confirm you that the
information you share will stay confidential and only used for the aforementioned academic purpose.
So, your genuine, frank and timely response is vital for the success of the study. I want to thank you in
advance for your kind cooperation and dedication of your precious time to fill this questionnaire.
Sincerely yours, NOUKEU NJEUDJI AGATHE VALERIE.
Please Note:
1. No need of writing your name.
2. Indicate your answer with a check mark (√) on the appropriate block/cell for all questions.
3. If you need further explanation please contact me and discuss the matter freely at (Telephone
No.656169637).
Section A: General Information
This part of the questionnaire, tries to gather some general information about the background of the
respondent and the organization.
1.1 Sex
1) Female ☐
2) Male ☐
1.2 Age
1) Under 20 Years Old ☐ 3) 31-40 Years
Old ☐
2) 20-30 Years Old ☐ 4) Over 40 Years

i
Old ☐
1.3 Educational Qualification:
1.4 Years stayed at the organization:
1) Under 2 Years ☐ 3) 6-10 Years ☐

2) 2-5 Years ☐ 4) Over 10 Years ☐
1.5 Your department/work unit:
1) Procurement ☐ 2) Finance ☐ 3) Warehouse ☐
4) Fleet Management ☐ 5) Security and Maintenance ☐ 6) Budget and Control ☐
1.6 What title do you hold _________________________?
SECTION B:
1. The procurement function’s impact the performance of an organization.
Indicate how the procurement function affects the performance of an organization Kindly point
out the level of extent to which you agree with the following statements 1) Strongly agreed 2)
Agree 3) Undecided 4) Disagree 5) Strongly disagree
Impact of the procurement

function on organizational 2 3 4
performance 1 5
Quality service delivery
Lowers level of inventory
Lowers cost
Increases Productivity
2. Records Management Systems and Information Communications Technology impact procurement

performance of an organization.
ii
Indicate how Records Management Systems and Information Communications Technology
impact procurement performance of an organization. Kindly point out the level of extent to which
you agree with the following statements 1) Strongly agreed 2) Agree 3) Undecided 4) Disagree 5)
Strongly disagree
Impact of Records Management

Systems and Information
Communications Technology on 2 3 4
procurement performance of an 1
organization. 5
Enterprise Resource Planning (ERP)

software has made the procurement
process faster and cheaper
ICT has reduced paper work
ICT has reduced the lead times
ICT has brought satisfaction to all

stakeholders
RMS ensure transparency,

accountability and responsibility in
the procurement process
3. Staff qualifications contributes to the procurement performance in an organization.
Indicate how Staff qualifications contributes to the procurement performance in an organization.

Kindly point out the level of extent to which you agree with the following statements 1)
Strongly agreed 2) Agree 3) Undecided 4) Disagree 5) Strongly disagree
Contribution of Staff
qualifications to the procurement
performance of an organization. 1 2 3 4 5
Enhance staff ability to perform,

and make better decisions, work as
a team, and adapt to change
Increases efficiency, quality and

productivity.
iii
Creativity and innovation
4. Procurement procedures affect the performance of an organization.
Indicate how Procurement procedures affect the performance of an organization.

Kindly point out the level of extent to which you agree with the following statements
1) Strongly agreed 2) Agree 3) Undecided 4) Disagree 5) Strongly disagree
Procurement procedures affect the 1 2 3 4

performance of an organization 5
Public procurement procedures tend

to be characterized by high levels of
bureaucracy independent of order
value, poor communications and
focusing on unit price rather than
long-term relations.
Procurement perceptions are affected

by the existing organizational
structure, quality of internal
communication system, past
experience and resources available.
Strict codes of conduct ensure

purchasing procedures are followed
Punishing of corrupt behavior

contributes to higher performance by
purchasing staff
iv

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The Impact Of The Procurement Function On The Performance Of An Organization” case of the

National Hydrocarbons Corporation

MEMBER OF JURY ONE

MEMBER OF JURY TWO

LIST OF ABBREVIATIONS /ACRONYMS

CHC - Cameron Hotels Corporation

CNIC – Cameroon Shipyard and Industrial Engineering Ltd

COTCO – Cameroon Oil Transportation

COTSA – Cameroon Oil Terminal

HYDRAC – Hydrocarbures Analyses Contrôles

ICT – Information And Communication Technology

ISTAG- Institut Supérieur de Technologie Appliquée et des Gestion

KPI – Key Performance Indicators

NHC - National Hydrocarbons Corporation

PCRM-Procurement Capability Reviews Assessment Model

RMS – Record Management System

SCDP –Cameroon Company of Petroleum Depots

SNH – Société Nationale Des Hydrocarbures

SWOT- Strenght, Weaknesses, Opportunities And Threats

TRADEX – Société De Trading Et D’exportation De Pétrole Brut Et De Produits Pétroliers

LIST OF ABBREVIATIONS /ACRONYMS............................................................................................v

CHAPTER ONE: INTRODUCTION.........................................................................................................1

1.1 BACKGROUND TO THE STUDY.................................................................................................1

1.1.1 Historical Background...............................................................................................................1

1.1.1.2 Historical Background of the National Hydrocarbons Corporation.......................................2

1.1.2 Theoritical background..............................................................................................................2

1.1.3 Conceptual background.............................................................................................................4

1.1.4 Contextual background..............................................................................................................4

1.2 PROBLEM STATEMENT...............................................................................................................5

1.3 OBJECTIVES OF THE STUDY....................................................................................................6

1.3.1 General Objective......................................................................................................................6

1.3.2 Specific Objectives....................................................................................................................6

1.4 RESEARCH QUESTIONS...........................................................................................................6

1.4.1 General Research Questions......................................................................................................6

1.4.2 Specific Research Questions....................................................................................................6

1.5 HYPOTHESIS OF THE STUDY...................................................................................................6

1.5.1 General Hypothesis....................................................................................................................6

1.6 SIGNIFICANCE OF THE STUDY.................................................................................................7

1.6.1 Significance to the Company......................................................................................................7

1.6.2 Significance to the Researcher....................................................................................................7

1.6.3 To Feature Researchers...............................................................................................................7

1.7 JUSTIFICATION OF THE STUDY.................................................................................................7

1.8 SCOPE OF THE STUDY.................................................................................................................8

1.8.1 Geographical Scope...................................................................................................................8

1.8.2 Time Scope................................................................................................................................8

1.8.3 Thematic Scope..........................................................................................................................8

CHAPTER TWO: LITERATURE REVIEW.............................................................................................9

2.1 THEORETICAL REVIEW..............................................................................................................9

2.1.1 Agency Theory..........................................................................................................................9

2.1.2 Bloom’s Taxonomy of Learning Theory.................................................................................10

2.1.3 Procurement Capability Reviews Assessment Model.............................................................11

2.1.4 Resource Based Theory...........................................................................................................11

2.1.5 Approach by Objectives...........................................................................................................12

2.2 CONCEPTUAL REVIEW.............................................................................................................13

2.3 EMPIRICAL REVIEW..................................................................................................................14

2.3.1 Procurement and organizational performance.........................................................................14

2.3.2 Procurement Performance........................................................................................................15

2.3.4 Information and Communication Technology and Procurement Performance.......................19

2.3.6 Staff Qualifications and Procurement Performance................................................................22

2.4.2. Organizational structure of NHC............................................................................................26

2.4.4 INTERNSHIP ACTIVITIES a. Establishment of Purchase Orders;.......................................29

2.4.5. SWOT ANALYSIS OF THE NATIONAL HYDROCARBONS CORPORATION.............30

CHAPTER THREE: METHODOLOGY..................................................................................................32