Mwugusi KVN Project 2

IMPACT OF SUPPLY CHAIN MANAGEMENT PRACTICES ON
THE PERFORMANCE OF BANKS IN KENYA: A CASE OF

POST BANK
SUBMITTED BY: KEVIN MWUGUSI

INDEX NUMBER: 5780011695
COURSE: DIPLOMA IN SUPPLY CHAIN MANAGEMENT
MODULE III
INSTITUTION: ELDORET NATIONAL POLYTECHNIC
CENTRE CODE: 578001
COURSE CODE: 2903/3
SUPERVISOR: MADAM RACHEAL
EXAM SERIES: NOVEMBER SERIES
RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT

OF BUSINESS IN PARTIAL FULFILMENT OF THE
REQUIREMENTS FOR THE DIPLOMA IN SUPPLY CHAIN
MANAGEMENT
DECLARATION
This project is my own original work and has not been presented for award of any diploma in any
institution of higher learning.
Kevin Mwugusi
Admission Number 2019\06162
Sign……………………………….. Date……………………….
This research proposal has been submitted for examination with my approval as the Project
Supervisor.
Madam Racheal
ELDORET POLYTECHNIC
Sign…………………………………… Date………………………
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DEDICATION
This project is dedicated first, to the Almighty God who gave me the physical and mental
strength to undertake and accomplish this study. Secondly, I devote this project to my family
members for the support they accorded me in the period of research.
ACKNOWLEDGEMENT
I would like to acknowledge the efforts of all those individuals whose contribution and assistance
made the completion of this research proposal possible.
First and foremost, my sincere gratitude goes to my project supervisors for time and invaluable
pieces of advice, guidance and help through the preparation of this project proposal. Secondly, I
wish to acknowledge my course mate Rehema for her help in the project proposal.
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Table of Contents
DECLARATION..............................................................................................................................i
DEDICATION.................................................................................................................................ii
ACKNOWLEDGEMENT...............................................................................................................ii
DEFINITION OF TERMS.............................................................................................................vi
Information Communication Technology..................................................................................vi
Globalization...............................................................................................................................vi
Organization................................................................................................................................vi
Outsourcing.................................................................................................................................vi
Partnership.................................................................................................................................vii
Practices.....................................................................................................................................vii
ABSTRACT.................................................................................................................................viii
INTRODUCTION.......................................................................................................................1
1.1 Background of the study....................................................................................................1
1.2 Statement of the Problem...................................................................................................5
1.3 General Objective..............................................................................................................6
1.4 Research Questions............................................................................................................6
1.5 Justification and Significance of the Study........................................................................7
CHAPTER TWO: LITERATURE REVIEW............................................................................10
2.1 Introduction......................................................................................................................10
2.2 Theoretical Framework....................................................................................................10
2.3 Conceptual Framework....................................................................................................13
Figure 1; Conceptual framework...........................................................................................13
2.4 Empirical review of Literature.........................................................................................22
2.5 Research Gaps..................................................................................................................24
2.6 Summary of the Chapter..................................................................................................25
CHAPTER THREE: RESEARCH METHODOLOGY............................................................27
3.0 Introduction......................................................................................................................27
3.1 Research design...............................................................................................................27
3.2 Target Population.............................................................................................................27
Table 3.2.1 Research population............................................................................................28
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3.3 Sample and sampling technique.......................................................................................28
Table 3.2.2 Sample size.........................................................................................................29
3.4 Data Collection Instruments............................................................................................29
3.5 Data collection procedure................................................................................................29
3.6 Pilot testing of the research instrument............................................................................30
3.7 Reliability and Validity of the Study...............................................................................30
3.8 Data analysis and presentations.......................................................................................30
CHAPTER FOUR: DATA ANALYSIS, RESEARCH FINDINGS AND DISCUSSION.......31
4.0 Introduction......................................................................................................................31
4.1 Response Rate..................................................................................................................31
Figure 4.1 showing response rate of the participants.............................................................32
4.2 Biographical Information of the Respondents.................................................................32
Figure 4.2.1 showing employees’ position in the firm..........................................................32
Source: Research data, (2022)...............................................................................................33
Figure 4.2.2 showing highest level of education of the employees.......................................33
Table 4.1 showing work experience of the employees..........................................................34
4.3 Effects of outsourcing on bank performance...................................................................35
Table 4.2 showing outsourcing of goods and services..........................................................36
Table 4.3 showing drawbacks of outsourcing........................................................................37
Figure 4.3.1 showing effects of outsourcing..........................................................................38
Figure 4.3.1 showing effects of outsourcing..........................................................................40
4.4 ICT and its role in SCM...................................................................................................40
Table 4.4.1 showing adoption of ICT in the firm..................................................................42
Figure 4.4.1 showing role of ICT in the firm.........................................................................42
4.5 Strategic Partnership and its extent..................................................................................43
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Table 4.5.3 showing influence of procurement practices......................................................46
Table 4.5.4 showing extent of SCM practices.......................................................................46
Table 4.5.5 showing SCM practices on organization performance.......................................47
4.6 Globalization of SCM......................................................................................................48
Table 4.6.2 showing reasons for globalization......................................................................50
Figure 4.6.1 showing reason for globalization.......................................................................51
Figure 4.6.2 showing globalization of SCM..........................................................................52
4.7 Summary of the Chapter..................................................................................................52
CHAPTER FIVE...........................................................................................................................53
SUMMARY CONCLUSIONS AND RECOMMENDATIONS...............................................53
5.0 Introduction......................................................................................................................53
5.1 Summary of Findings.......................................................................................................53
5.2 Conclusion.......................................................................................................................55
5.3 Recommendations............................................................................................................55
5.4 Suggestions for further study...........................................................................................56
REFERENCES..........................................................................................................................58
APPENDIX 1;............................................................................................................................59
QUESTIONNAIRE TOOL........................................................................................................60
Please tick where appropriate................................................................................................60
Part B; Assessment of Supply Chain Management Practices................................................60
Section C; Partnership............................................................................................................64
Reasons for Outsourcing........................................................................................................66
Part C; Assessment of Organizational performance..............................................................68
APPENDIX II; WORK PLAN..................................................................................................72
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DEFINITION OF TERMS
Information Communication Technology
Information and communications technology (ICT) is often used as an extended synonym for
information technology (IT), but is a more specific term that stresses the role of unified
communications and the integration of telecommunications (telephone lines and wireless
signals), computers as well as necessary enterprise software, middleware, storage, and audio-
visual systems, which enable users to access, store, transmit, and manipulate information.
Globalization
Globalization is the process of international integration arising from the interchange of world
views, products, ideas, and other aspects of culture. Advances in transportation and
telecommunications infrastructure, including the rise of the telegraph and its posterity the
Internet, are major factors in globalization, generating further interdependence of economic and
cultural activities.
Organization
An organization is an entity, such as an institution or an association that has a collective goal and
is linked to an external environment. There are a variety of legal types of organizations,
including corporations, governments, non-governmental organizations, international
organizations, armed forces, charities, not-for-profit corporations, partnerships, cooperatives,
universities, and various types of political organizations.
Outsourcing
Outsourcing is the contracting out of a business process to a third-party. Outsourcing sometimes

involves transferring employees and assets from one firm to another, but not always. Outsourcing
is also used to describe the practice of handing over control of public services to for-profit
corporations. It includes both foreign and domestic contracting, and sometimes includes
offshoring or relocating a business function to another country. Financial savings from lower
international labor rates is a big motivation for outsourcing.
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Partnership
A partnership is an arrangement in which parties agree to cooperate to advance their mutual

interests. Partnerships between individuals, businesses, interest-based organizations, schools,
governments, and varied combinations thereof, have always been and remain commonplace. It is
formed between two or more businesses in which partners pool their resources together to
achieve and share profits and losses. Partnerships exist within, and across, sectors. Non-profit,
religious, and political organizations may partner together to increase the likelihood of each
achieving their mission and to amplify their reach.
Practices
This is a conventional, traditional, or otherwise standardized method employed to achieve the

desired objective. SCM practices are a set of activities undertaken by organizations to ensure
effective management performance of its supply chain. They not only promote organization’s
cutting advantage, but also enhance its performance.
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ABSTRACT
Effective supply chain management (SCM) has become a potentially valuable way of securing
competitive advantage and improving organizational performance as competition is no longer
between organizations, but among supply chains. The purpose of this study was to examine the
adoption of the Supply Chain Management practices on the performance of Banks in Kenya.
This research conceptualizes and develops four dimensions of SCM practice (outsourcing of
goods & services, information & communication technology, strategic supplier partnership, and
globalization) and tests the relationships between SCM practices, and organizational
performance. The study employed descriptive design. Data for the study was collected using a
self-administered questionnaire procedure, where the questionnaires were administered to the
selected respondents through drop and pick later technique. A sample size of 33 respondents was
drawn from the sample frame using simple stratified random sampling technique to promote the
needs for efficiency and representativeness from various branches and outlets of POSTBANK as
an organization in Nairobi County and the relationships proposed in the framework was tested
using Chi-square, T-test among other statistical tools. Data was analyzed by aid of Statistical
Package for Social Sciences (SPSS). The study will be useful in the academic circles as it will
contribute immensely towards filling the gaps in knowledge in the area of service industry. The
study found that outsourcing was important to the banks only when the appropriate methods are
employed. It also found that ICT had a major role in determining the performance of banks as it
dictated the mode of transaction and data they displayed to clients. Strategic partnership was also
important based on what it intended to achieve in enhancing the performance of banks. Lastly,
globalization is equally vital as it increases competition and exposes local banks to global scene
to experience how performance of banks can be improved. The study recommends that correct
ICT methods should be applied to promote the competitiveness of banks and improve
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performance. Also it recommends that outsourcing be done only if they promote the objectives
and goals of the banking institute.
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CHAPTER ONE
INTRODUCTION
1.0 Introduction.
Supply chain management are the most significant aspects of the success of the banking organizations
because they are the engines that drive their operation towards successful achievement of their goals.
This study seeks to investigate the impacts of the supply chain practices on the operations of banking
organizations.
1.1 Background of the study
Supply chain Management (SCM) entails managing a network of interconnected businesses
involved in the ultimate provision of products and services or service packages required by the
end users. Supply Chain Management practices are increasingly becoming an important feature
in the attainment of competitive advantage in most service organizations in the global markets
today. The number of competitors is increasing and expanding both locally and globally,
organizations not only have to re-establish their operations to produce goods and services of
increased quality which will greatly differentiate them from others and make them respond to the
changing market dynamics through the efficient and effective management of the Supply Chain.
Supply Chain (SC) encompasses all activities associated with the flow of goods and services
from raw materials stage to the final product usable by client and the supply chain management
emphasizes on the integration of supply chain activities and information flows associated with
them to achieve a competitive advantage of continuity and reliability
Many organizations aim at achieving survival, global leadership and to increase innovation; this
will only be achieved by implementing a quality supply chain and continuous improvement of
customer management through distinguished services

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Some supply chain management applications can be based on an open data models that support
the sharing of both inside and outside the enterprise i.e. the extended enterprise which includes
key suppliers, manufacturers and end customers of a specific company. Hadfield pointed out that,
SCM joins all actions with a stream and changing of products from raw materials inward to the
end user connecting the information streams.
Over the years the nature of supply chain management has changed to the extent that
organizations no longer compete against companies on the basis of quality as it was practiced in
the 90s however, the new source of business competition lies outside the walls of the firm, it is
determined by how effectively these organizations link their operations with the supply chain
partners. Being able to create effective business relationships with their customers, suppliers and
other strategic partners anchored on long term commitment.
The financial sector in Kenya has experienced rapid growth in the post-independence period
making it one of the strongest financial markets in the region. The number of licensed
commercial banks has risen. In addition to the commercial banks, Kenya’s financial sector has
got over 18 non-bank commercial institutions, 5 building societies and 4 mortgage financing
companies. The Kenya’s banking industry has continued to be dominated by two multinational
banks which are; Barclays Bank and the Standard Chartered Bank, one of the Government
controlled bank, and Postbank has also been dominating the market as a local Bank. The three
top banks control over 50% of the total deposits in the country’s banking sector (Ministry of
finance, 2013). Kenya’s financial sector has remained fairly very liberal and competitive. Entry
into the market by foreign investors has remained largely unrestricted. However, to start a new
bank, foreign investors were required to have Ksh.150 Million as the minimum core capital. The
1999 budget made large upward adjustments to this minimum core capital. The budget raised the
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figures to Ksh.500Million for banks and mortgage finances companies and Ksh.375Million for
non-bank institutions and Ksh.150 Million for building societies.
In Kenya’s financial sector, supply chain management performs various functions which include;
receiving and processing of goods and services from user departments, coordinating the
preparation of annual procurement plans as submitted by the respective departments, preparation
of annual procurement plans as submitted by the respective departments, advertisement of
tenders, preparation and processing of quotations, preparation of tender documents in
consultation with the user departments, preparation of the letter of awards, notification and
contract agreements as well as management of contracts, order follow up or processing of goods,
delivering schedules to user departments, performance of market research and price survey on
items and services required by the respective financial institution, maintenance of the updated
supplier register and files for the purposes of performance rating and preparation of annual
reports. Banking organizations procure various items within different categories of the
requirements which include; stationery, printing services, cleaning materials, food stuff,
consultancy services, legal services, clearing and forwarding services, security services,
computer accessories, vehicles and machinery, insurance services, ticketing and travel services
amongst others.
1.1.1 Kenya Post Office and Savings Bank.
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Kenya Post Office and Savings Bank was established in 1910 as the first bank in Kenya to
provide thrift and mobilize savings for the national Development through the provision of
savings services to local and international citizens regardless of race, gender, color and or origin.
The 2010-2015 strategic plans is viewed as an instrument that gives and guides the organization
in refocusing on its mandate through proper implementation of the necessary supply chain
management practices. In line with the Procurement and Disposal Act of 2005, procurement and
supply chain planning should be established in every public sector organization to increase
efficiency and effectiveness of the SCM global objectives.
The organization therefore seeks to aim at satisfactorily achieving and delivering services and
ensuring proper implementation of the SCM practices available to achieve its strategic plans.
(Procurement Plan, 2010). The SC of the organization has achieved numerous challenges in the
recent past due to the poor interpretation and the application of proper SCM practices (Karani,
2014). This study seeks to investigate the impact of SCM practices on banking organizations in
Kenya with specific focus on PostBank because it is the oldest and first bank to be established in
Kenya in 1910.
1.2 Statement of the Problem
Many researches on supply chain management have been done both locally and internationally
and majorly processing and manufacturing sectors. Studies by Blowfield & Dolan (2010), Apopa
(2012), (Roath, 2012) and Kasomi (2012) have found varied impacts of SCM on organizational
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performance. Some of the findings includes, but not limited to; enhanced performance
measurement, improvement and management organizational processes. However, the supply
chain management within the banking sector has not been well covered.
Effective supply chain management practices in organizations require total understanding of the
day to day transactions to collaborate trade chain and the practices enabling SCM facilities and
direct organizational performance. This has not been the case in the banking industry especially
in Kenya in the recent past. In modern banking sectors, SCM is an important business integration
technique which creates a strategic advantage for the organization (Sahan and Mohan, 2011).
Poor accountability in the internal audit of many organizations in the banking sector, have
hampered the essential standards of SCM services that make organizations realize their goals and
objectives (Woods, 2009). The core and critical challenge mostly experienced by various banks
in
Kenya include application of ineffective SCM practices and procedures. Poor integration of
Information and Communication Technology (ICT) among others. Richard, (2008) observed that
with the increased globalization and internationalization of firms, Banks within technologically
efficient countries have entered the market hence making competition levels at its peak. As such,
Kenyan Banking organizations should adopt the best SCM practices identified in this study i.e.
Globalization, implementation of ICT, outsourcing and strategic partnership with key investors.
Several studies have focused on SCM practices but most have failed in their quest to provide
enough information on the best practices and their effects on performance of banking
organizations. As Richard (2008) states, no emphasis has been made by banks in the sector in
managing and creating efficiency in SCM. This justifies the existence of SC flaws and problems
in the banking sector in Kenya inhibiting the achievement of a competitive advantages and the
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set goals. It is against this backdrop that the study thus strove to bridge the gap between SCM
practices and organizational performance by evaluating the relationship between the SCM
variables and the Kenyan banking organization performance.
1.3 General Objective
To examine the impacts of supply chain management practices on the performance of banks in
Kenya.
1.3.1 Specific Objectives
i. To determine the effect of Outsourcing of services and goods to the
performance of banks.
ii. To examine the role of ICT in the SCM in the banks. iii. To establish the
extent of strategic partnership in the banking sector.
iv. To assess the extent of globalization of Supply Chain Management on the performance of
banks.
1.4 Research Questions
i. What effects does outsourcing of goods and services have on the performance of
banks?
ii. What is the role of ICT in the SCM in banking sector? iii. What is the extent of
strategic partnership in the banking sector? iv. What is the extent of global supply
chain management affect banks performance?
1.5 Justification and Significance of the Study
The study was on the impacts of the SCM practices on the performance of organizations in the
Banking sector. This was premised on the realization that, supply chain is very important to the
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banking sector even with the little attention it is given by the players in the industry. As such, it
transforms into an obstacle on performance of these organizations. Again the issue of applying
SCM practices in the banking sector is a fairly new phenomenon in Kenya; hence there is need
for extensive research to unravel the various underlying dynamics of the research topic so as to
be applied to increase their performance.
The rationale of the study was enabled by the need to generate new strategies and comprehensive
approaches to be used by banking organizations to help them manage their Supply Chain. The
study will thus seek to provide details of strategies applicable by the banks such as POSTBANK
when streamlining their Supply Chain systems. This is premised on the fact that the bank lacks
measures in place to strengthen the execution of SCM practices that enhance competitive
advantage and organization performance. Since the bank has a higher concentration of its outlets
and branches as well as its headquarters based in Nairobi city, there was therefore a justification
to conduct the study of this magnitude in Nairobi County.
The findings of this study would be valuable to diverse segments of the people. The banks in
Kenya would benefit from the findings of this study as they would have the knowledge of the
SCM practices that enhance the performance of organizations.
Other stakeholders such as the Government would benefit from the findings of this study by
getting to understand the best SCM practices and procedures that promote efficient internal audit
and performance of organization. Consequently, it can accelerate the banks with resources that
would aid in putting measures that will strengthen the execution of the SCM practices helpful
and geared towards realizing the economic pillar of the Vision 2030. Academic institutions will
use the findings of this study as a basis for further research in SCM practices. As expected, this
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study will open floodgates of more academic researches on the role of SCM and related topics in
Kenya and the world at large thus, contribute to filling the knowledge gaps in the discipline.
Lastly, this study is important in identifying significant policy cracks as a foundation for advising
the policy makers, other stakeholders on appropriate SCM policy practices, procedures and
interventions that need to enhance organizational performance in the service industry.
1.6 Scope of the Study.
The study sought to examine the impacts of the adoption of SCM practices on the performance of
banking organizations in Kenya within Nairobi County. This was informed by the fact that
POSTBANK has its head office in Nairobi and most of its outlets and branches are also with
Nairobi County. The study was conducted between January 2021 and January 2022.
1.7 Limitation of the Study.
This study was limited to examining the effects of adoption of the SCM practices on the
performance of Banks in Kenya, with a special emphasis on outlets and branches of POSTBANK
in Nairobi County. For more conclusive results, more outlets and branches across the country
would suffice. Nevertheless, this will not be possible due to the following limitations:
The sample population selected for this study will be limited to POSTBANK outlets and
branches, in Nairobi County; thus, the ability to generate confidential data from each of the
respondents without encountering challenges was difficult. However, the study upheld
participant’s right to confidentiality and privacy in line with divulging information during the
data collection.
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The study strove to follow informed consent rules of research that allows for the respondents to
voluntarily participate in the research. Nonetheless, the research was limited to the fear of the
respondents to give information during the data collection process.
The study endeavoured to equitably sample participants randomly to allow for equal opportunity
of representation and participation in the proposed study. However, it was limited to lack of
cooperation on some participants of the study during the collection of data. This might be due to
ignorance, hostility, language barrier and other forms of hurdles that may hinder data collection.
The research was limited to time, resources and logistical constraints due to the expansiveness of
the County and how far spread from one another the banks are. However, this was overcome by
use of the research sample and use of drop and pick later questionnaires to the respondents.
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CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
This chapter presents a review of studies that have been done in the past on the effects of the
Supply Chain Management (SCM) on the performance of banking organizations in Kenya.
Literature review involves locating, reading and evaluating the reports of previous studies,
observations and opinions related to a planned study. It therefore leads to appreciating and
understanding the research that has already been done in ones area of interest.
The specific areas covered include the theoretical review, conceptual framework and critique on
existing literature, research gaps and summary.
2.2 Theoretical Framework
A theoretical framework can be defined as a collection of interrelated ideas based on theories. It
is a reasoned set of prepositions which are derived and supported by data or evidence. This
section provided the theoretical framework, and two key theories will be included in this study,
namely systems theory and strategic choice theory.
2.2.1 The theory of Constraints
Theory of constraints is an approach to the management of operations and it was developed by
Goldratt in 1984.It provides a management theory of how organizations should be run. The
concept was extended to theory of constraints (TOC) with a publication in 1999 which views any
manageable system as being limited in achieving more of its objectives by a very small number
of constraints. There is always one constraint and the TOC uses a focusing process to identify the
constraint and restructure the organization around it
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TOC emphasizes on the optimization of performance within a defined set of constraints of the
existing process and it provides an action framework which combines the activities of the
managers and the visible system elements.
This theory incorporates the idea that the goal or mission of an organization exists, and
organizations can be measured and controlled by variations on three measures throughput,
operational expense and inventory. Throughput is the rate at which the system generates money
through sales, inventory is all the money that the system has invested in purchasing things it
intends to sell. Operational expense is all the money a system spends in order to draw the the
inventory into throughput.
In the context of this study one of the variables of Outsourcing will show the linkage to one of
the measures operational expense used to measure the performances of organizations in the
Banking sector.
2.2.2 Strategic choice theory
Strategic choice theory considers the interaction between organizational actions and events.The
integrative approach of strategic choice theory is of importance and beneficial for strategic
management, for instance, by stressing cross-functional cooperation in organizations (Jemison,
1981). Theories enhance research and practice as they help make sense of complex and dynamic
environments . Strategic choice theory depicts the relationship between top management ś
choices and firm performance and the overall interaction between environment and
organizations. It is developed to underline the inadequacy of deterministic organizational views
and stress the importance of managerial choice views organizations to be partially influenced by
environments and primarily affected by top management choices (Miles et al., 1978). Despite the
opposing views to deterministic management theories, Campling and Michelson, 1998,
established the strategic choice resource dependence model to further underline the
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interdependence of environment and organizations in regards of strategic choices, actions and
overall firm performance. As stated before, strategic choice theory is characterized by an
integrative view and thus also underlines the view of businesses as adaptive organizations, which
learn over time; thereby, their strategic choices lead to actions directed by top management.
The strategic type of organizations, Analyzer, Defender or Prospector thereby influences how
managers and organizations organize and operate in purchasing; according to strategic choice
theory prospectors would strive to be proactive, innovative and produce internally or even
change their product portfolio, whereas defenders would rather source the item from an
established supplier in order to ensure efficient production and establish a stable product
portfolio
. In the make or buy decision top management should balance dependence versus value to
achieve organizational goals. Regarding decision point 2, the sourcing strategies, strategic choice
theory advises to minimize dependence in order to ensure the high freedom of choice for the
dominant coalition. Then decision point 3, supplier strategies, can consider whether to
collaborate or rather exploit suppliers.
In the context of this study, some of the variables i.e. Strategic Partnerships with Suppliers,
globalization and adoption of ICT are strategic and it focuses on involving the top management
critical decision to make these strategic decisions to invest on these practices to improve the
performance of their organizations and achieve a competitive advantage.
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2.3 Conceptual Framework
Conceptual framework below indicates the relationship between the variables postulated in this
study.
Figure 1; Conceptual framework
SCM (independent) variables
Outsourcing Goods &

Services: -
Cost, Profits
ICT: - Dependent variable
Efficiency, Savings, Costs

Organizational
Performance: -
Market share, Revenue, Market
base
Partnership with
suppliers: -
Savings, Market share
Globalization of SCM: -
Costs, Asset base
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2.3.1 Outsourcing
Outsourcing is the sub-hiring of activities, services or product parts that are not core to the
company business, usually aiming at cost reduction, quality improvement and delivery struggle
especially if both organizations in supply relationship brings to an end the existing relationships.
Outsourcing is the strategic use of resources to perform activities traditionally handled by
internal staff and their resources. It is a management strategy by which an organization
outsources major non-core functions to specialized and efficient service providers to help the
organizations perform best where it is best capable. The main focus to this SCM practice in many
organizations is that the company will increasingly focus on the activities which are in the value
chain addition where it has a distinctive advantage. This movement has been evident particularly
in the banks where the provisions of transport, warehousing and inventory control in the supply
chain have been increasingly subcontracted to a specialist and experts in that field. To manage
and control this network of partners and suppliers a blend of both central and local involvement
is required, thus strategic decisions need to be taken centrally with the monitoring and control of
suppliers performance and day to day liaison with these partners being managed well.
Susan, (2011) observed that firms in each level of the supply chain Outsourcing relationships will
generate profits be squeezing margins of the firm to the tier. The path may become a recipe for
stagnation of many firms in this relationship. The SCM practice has been applied in many
organizations and thus it has become increasingly important over the last decade, outsourcing is a
major part of business strategy practices that drives an organization to a greater success. The
empirical challenge of outsourcing to many organizations is the failure to incorporate all the
many assumed extreme costs hence making close to 80% of companies practicing outsourcing
fail. Outsourcing depends on the trust firms have in an outsourcing strategy over each other.
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This happens when companies believe that they both will perform actions that will result in
positive benefits for the development, increase of communication is considered to be brail of
trust concerning the integrity, and support between both parties will increase.
Many of the studies of outsourcing have focused primarily on the motives for outsourcing.
Pagnocelli (1994) has explored the main reasons for the outsourcing, such as changing one
business function to make it more "centralized" in pursuit of improved efficiency . researched
the outsourcing in Edinburgh and Lothians and suggested that improving the quality of service.
Relatively speaking, the motivations such as sharing risks and formatting strategic alliance were
not as important as the formers. What’s more, outsourcing also helps the firms to gain
professional technical capacities from the suppliers during the process of corporation, and it is
particularly useful in the field of Information Technology
Cost reduction is usually viewed as the internal motivation for outsourcing (Smith et al. 1998),
which means that using the external resources to provide the same level of services at a lower
price than operating it inside (Weaver,1998) analyzed the financial characteristics of firms with
outsourcing, and clearly categorized some motivations: to reduce costs; to concentrate attention
on core business functions; to meet the demands for the realization of assets and; to obtain the
external capacity.
Manzi (2004), states that the most common economic factor that influences the decision is the
need to reduce costs .Where the benefits analysis has been carried out and has been established
that it is most economical to outsource rather than continue to operate a given function looks
forward to making profits in business. Kulumba, , states that, outsourcing is a popular
phenomenon with managers because they believe that outsourcing vendors are inherently more
efficient due to economies of scale. The outsourcing organization benefits from getting the
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services from the provider at a reduced cost since it are provided on a large scale and usually for
a reasonable time if it is good work.
Belcourt, suggested that outsourcing is promoted as one of the most powerful trends in modern
management. The rationale for outsourcing some functions and/or processes includes substantial
financial economies, increased ability to focus on strategic issues, access to technology and
specialized expertise, and an ability to demand measurable and improved service levels.
Outsourcing differs from alliances, partnerships or joint ventures in that the flow of resources is
one-way, from the vendor to the outsourcer; typically, profit sharing or mutual contribution are
not a common practice.
Farrington, (2006), also shows how important competence is, it is the core activities of the
company that tell or manifest the performance of the organization. These activities need much
more time so as to come out at their best and give the company competitive advantage over
others. This can be achieved through outsourcing non-core activities and concentrate on its core
competence.
2.3.2 Information and Communication Technology.
Information and Communication Technology involves the designing, developing, implementing,
supporting or management of computer-based information systems particularly software
applications and computer hardware encompassing the information systems. It’s the capability to
electrically input, process, store, output, transport and receive data and information including
text, graphs, sound, video as well as the ability to control machines of all kinds electronically
(Shelly,
16
2009). The implementation of IT to enhance the management of SC is no longer something new.
The implementation of IT technologies such as Electronic Data Interchange (EDI) has evolved to
the current web technologies such as Business to Business technologies and collaborative
commerce technologies (Chong and Ooi, 2008). The implementation of IT in the SC has been
shown to have numerous impacts on the performance of organizations. Mabert, (2001) found the
Enterprise Resource Planning (ERP) systems are able to provide a competitive advantage for the
organizations that implement it. Advantages of ERP implementation include improving the
decision-making process via accurate information, improving planning and control of operations
for the organization as well as indirectly increasing customer satisfaction. With ICT technologies
companies are able to reduce issues with cost and system compatibility and are able to integrate
their backend systems to have seamless SC processes. Petrovic (2007) in their study of SCM
practices and organizational performances in an Australian Service industry found that IT
technologies have now moved towards wireless and with technologies such as Radio Frequency
Identification (RFID), 3rd generation Wi-Fi communications. These technologies have enabled
the management of SC through wireless and mobile technologies. On the other hand many
studies have also shown that IT implementation in SC has often been associated failures as well.
Beheshti, (2004), stated that there is a high failure rates in many IT implementations and the
failure might sometimes result in organizations facing bankruptcy.
According to the European Commission (2009), the importance of ICT has been in technology
itself than in the ability to create greater access to information technology in the underserved
populations. In the development of and the maintenance of SCM Information systems both the
software and the hardware must be addressed, hardware includes computers output/input and
17
storage modes, the software includes the entire system and the application programs used for
processing transactions management control, decision making and strategic planning.
Lack of ICT application in SCM of many service organizations affects the effective execution of
the SC functions and thus leads to poor interchange of information between the suppliers and
other external partners hence affecting the general performance of the organization. New first
software programmed for the service sector banking industry was developed by the Ross
Systems Incorporation, it was called SC Planning, it was used for demand forecasting and its
replenishment for accurate planning and scheduling of activities (Waystar, 2009). E-commerce is
a term used to describe the wide range of tools; techniques used to conduct business in a
paperless environment. It includes Electronic Fund Transfer and Electronic data interchange
capabilities. Data base warehouse is also a consolidated data base maintenance tool. Most
organizations have multiple databases. In banking situation database is maintained within a
specific business process, data held in a data warehouse are time dependent, historical and
aggregated. Many companies in the banking sector view ERP systems as a core IT infrastructure,
it has a simple data model and in developing a common independent of what the shared data
represent and also developed a rules and regulations of accessing the data
2.3.3 Strategic Partnerships.
Strategic SC Partnerships is a collaborative coalition of two or more firms in a market to
facilitate joint efforts collaborations in one or more core value creating activities which include
research, product development, marketing, sales and distribution. The objective of SC
partnership is to reduce costs of acquisition, possession and disposal of goods and services.
It is important that all existing and potential partners have a shared vision and purpose, as these
shared aims unite members in achieving common goals. When vision and purpose are mutual,
18
the organizations involved in partnering experience an increase in organizational capacity and
therefore possess a competitive advantage. As a result, organizations increasingly rely on
strategic alliances in various forms to stay ahead in today’s global and local economy.
(Boydell, 2007) explains that partnering relies on the development of relationships between the
parties involved and that partners not only need to connect with one another, but also begin to
connect one another to networks outside the partnership. These contacts are invaluable, as they
inform and connect partners with other industry leads, which enable them to function more
effectively within the partnership. In the same way, partnerships provide access to
complementary expertise and he support and capacity to further organizational strength. Another
benefit to partnering is the creation of innovative approaches to problem-solving and the
opportunity for reevaluating institutional operations and practices.
Tan, pointed out that partnerships have several advantages which include, having the latest
technologies and market information access, increasing the ability to provide wider range of
product and services to customers, reaching to economies of scale with the joint production and
research activities, risks sharing, increased knowledge assessment outside the organization
boundaries.
Ellan and Cooper also stated that through partnership, organizations can collaborate and share
risks and rewards in order to achieve SCM benefits, hence a long-term trustworthy partnership
with parties e.g., Suppliers is necessary. Partnership is able to reduce costs and is now an
increasing management tool used to reverse negative effects of adversarial relationships. In order
for firms t achieves financial growth and objectives, firms need to integrate with the SC partners.
19
According to Stuart strategic partnership is designed to influence the strategic and operational
capabilities of an individual partnership participating organization to help them achieve certain
significant strategic goals and objectives of the entity.
Supply partnership with suppliers enables organization to work more efficiently and effectively
with few important suppliers who are willing to share responsibility for the success of the
products. Strategic partnership has been reported to yield specific benefits, SC partnership
impacts significantly on the performance of an organizational SC performance and it also acts a s
a tool making the organization achieve a competitive advantage over other organizations.
SC Partnership is one of the most popular hybrid organizational terms. It has been adopted by
firms to manage inter-organizational collaboration in the SC. It provides both large and small
firms with numerous opportunities to improve their conduct of business such as wider diffusion
of the products without costly physical presence in the market risk and reward sharing, resource
pooling, reduction in coordination and transaction costs, ability to concentrate on core
competency and rapid response to the market need.
Kamuff et emphasizes that the departments and functions and many other activities in an
organization will have the opportunity to reduce costs. Woods, found out that partnering carries
the potential for meaningful benefits to be gained for the organization. It is designed to leverage
the strategic and operational capabilities of individual participating organizations to help them
achieve significant ongoing benefits A strategic partnership emphasizes direct, long-term
association and encourages mutual planning and problem-solving efforts. Such strategic
partnerships are entered into to promote shared benefits among the parties and ongoing
participation in one or more key strategic areas such as technology, products, and markets.
Strategic partnerships with suppliers enable organizations to work more effectively with a few
20
important suppliers who are willing to share responsibility for the success of the products.
Suppliers participating early in the product-design process can offer more cost-effective design
choices, help select the best components and technologies, and help in design assessment.
Strategically aligned organizations can work closely together and eliminate wasteful time and
effort. An effective supplier partnership can be a critical component of a leading-edge supply
chain.
2.3.4 Globalization
Globalization is defined as the process of increasing social and cultural inter-connectedness,
political Interdependence, and economic, financial and market integrations Globalization of the
SC operations has been the latest practice with most organizations; this is because the world is
smaller and smaller and thus organizations of all kinds must engage themselves in the economic
and business environmental changes. Most organizations venturing into Globalization because of
the favorable exchange rates, low cost of resources and cheap labor which is available
worldwide.
In the past two decades, the world has gone through the process of globalization, one that causes
increasing economic, financial, social, cultural, political, market, and environmental
interdependence among nations. Business, as well, is inevitably affected by this process of
change towards more interdependence. Many forms of organizational restructuring (such as
downsizing, reengineering, implementation of cooperative strategies) have been witnessed as
responses to globalization.
According to Harvey and Novićević (2002), various factors that drive increasing globalization
can be grouped under four broad categories: 1) Macro-economic factors, 2) political factors, 3)
technological factors, and 4) organizational factors. Macro-economic factors include, for
21
example, an acceleration of technology transfer among countries; other factors refer to
privatization, deregulation and trade liberalization of many nations in favor of free flows of trade
and investments (Eden & Lenway, 2001). Technological forces such as advance development in
communication and transportation technologies, which promote growth in international business
transactions, are also key drivers of rapid globalization (Knight, 2000). Shifting organizational
strategic attention towards a more global mindset is an example of organizational forces of
globalization. Consequently, these forces have inevitably caused changes in the global
marketplace. Such changes can be viewed as effects of globalization, which ultimately have
impact on firms.
Globalization also comes with enormous challenges such as liberalization of markets, intense
competition, decline of domestic job opportunities and revenues, economic volatility of the
integrated markets, cyclical crises, and non-tariff barriers to trade, spread of pandemics, and new
security issues. Many actors, especially in the least developed countries (LDCs) may not have the
capabilities to handle challenges (Spiegel, 2007) which globalization brings with it. And above
all, one major challenge will be the ability of poorer countries and the firms in them, for
example, to deal with the fact that there are no leveled playing grounds.
2.4 Empirical review of Literature
Supply Chain Management is regarded as one of the most influential development in business
management and it has gained significance for improving organizational performance In practice
supply chain management is regarded as a successful business concept and a good practice to
link all stakeholders and ensure cost effective and timely movement of materials and information
from inception of a product or service to its final consumption.
22
Academicians and practitioners agree that SCM practices can have a great positive impact on the
firm’s performance (Shin, 2000). It has been claimed that with product life cycles shortening and
technologies becoming increasingly imitable effective SC can be a big source of competitive
advantage for firms, where competitive advantage may be sought from practices which include
outsourcing and supplier collaborations.
SCM practices are a set of activities undertaken by organizations to ensure effective management
performance of its supply chain. Donlon, 2007 describes the latest evolution of SCM practices
which include; partnership, outsourcing, information technology flow and the globalization of
SC activities. Tan et al identified six aspects of SCM practices through factor analysis; SC
integration, information sharing, customer focus and use of Just in Time (JIT) capabilities. Min
and Mentzer identified the concept of SC as including the mission and vision, information
sharing, risk and award sharing, cooperation, process integration and long-term relationship and
agreed supply chain leadership. Thus, the above literature portrays SCM practices from different
perspectives with a common goal of improving organizational performances.
One of deficiencies of existing research in SCM is Inconsistency in understanding sustainability.
Carter and Rogers (2008) have demonstrated the inconsistency of defining sustainability in vast
scope of organizational, operational and supply chain management literature. According to their
findings, substantial body of SCM literature is restricted to specific environmental issues as
green product development, logistics, waste treatment, human rights etc. and therefore provides
narrow perspective on what SCM represents. Different environmental issues are addressed “in a
standalone fashion, without consideration of the potential interrelationships” between
environmental, social and economic issues (Carter and Rogers 2008). Seuring and Muller (2008)
have also highlighted that research in SCM “is still dominated by green/environmental issues”,
23
with “a clear deficit in supply chain management and purchasing literature on the amalgamation
of all three dimensions of sustainable development”. Social issues and sustainability as
integration of economic, environmental and social concerns are still rarely addressed.
Interestingly, integration of three aspects of sustainability in academic literature has generally
occurred since 2002 (Seuring and
Practices of SCM will Muller 2008). not only make an impact on the overall performance of the
organization, but also on the competitive advantage of the organization. These practices are
supposed to improve the organization’s competitive advantage uct innovation. Prior studies had
identified that some of the components of SCM practices i.e. Strategic partnership with the
supplier has a major impact on various forms of competitive advantage (i.e., price/cost). For
example, the strategic partnership with the supplier will help in improving the supplier
performance, and will help to reduce the time to the market (Ragatz, Handfield, & Scannell,
1997) and will also results in the responsiveness and satisfaction of the customer (Power, Sohal,
& Rahman, 2001). Information technology sharing will help to high level of integration of
supply chain (Jarrell, 1998) by making enable the organizations for the dependable delivery, also
for introducing new product in market quickly. Sharing of information and the quality of
information contributes positively towards the satisfaction of the customers (Spekman, Kamauff,
& Myhr, 1998) and quality of partnership (Lee & Kim, 1999; Walton, 1996). Strategy for
postponement not only helps to increase the flexibility in SCM but also help to balance the global
efficiency and responsiveness to the customer (Van Hoek, 1999).
2.5 Research Gaps
The theoretical and the empirical literature gave a comparative and a theoretical review of the
major activities that have been undertaken to address the effects of SCM practices on the
24
performance of organizations in the Banking sector in Kenya. However, the explored past studies
and the theoretical issues have not addressed the major SC practices and this indicates that both
the empirical and the theoretical literature are of little assistance towards providing an effective
solution to embracing an effective performance of SC in the banking sector.
Application of effective SCM practices that increase performances of banking organizations
remain core critical issue that should be dealt with, this will provide appropriate
recommendations on challenges facing the implementations of SCM practices. While the present
assessment has contributed to the understanding of these practices, further analysis in some areas
is required to ensure the capacity needs of SCM addressed adequately.
2.6 Summary of the Chapter
This chapter reviewed literature on the research study with the initial section exploring the
theoretical review and associated theories such as the strategic choice theory and the theory of
constraints which that acknowledged that organizations can be measured and controlled by
variations on three measures; throughput, operational expenses and the inventory. In the context
of this study Outsourcing is one of the variables and it will show its linkage to one of the
measures which is operational expense- used to measure the performance of organizations- in
this study banking organizations. The other theory is the strategic choice theory of the firm, in
this study’s context the variables of ICT adoption, globalization and the entering into strategic
partnerships, these aims to integrate the strategic management bold decisions in making and
adapting
to these costly practices in order to gain a competitive advantage- in this study in the banking
sector. This chapter also explores the empirical review of various authors, who have done
research on the supply chain management practices and its application in organizations. The
25
conceptual framework is also dealt with in this chapter and it identifies the variables which are
various independent variables such as Outsourcing, ICT, Partnership and globalization of
operations. The chapter also critiques the existing literature and identifies the research gap the
study seeks to fulfill. The next chapter deals with the research methodology and its related
features.
26
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
This chapter introduces the research design, the research population, sample size, sampling
technique, instruments, data collection procedure, pilot testing and data analysis
3.1 Research design
The study adopted descriptive research design in order to provide a framework to examine the
characteristics of the independent variables (Outsourcing, Information and Communication
Technology, Partnership and globalization). This was appropriate to obtain information
concerning the status of the phenomenon, to describe what the current situation is with respect to
the variable of the study. Thus this study used this design to get clear information from the
respondents with much ease.
3.2 Target Population
The target population for this study comprised of all the branches of POSTBANK within the
Nairobi area. According to Post bank financial statements (2021) there are 15 branches within
the Nairobi region.
27
Table 3.2.1 Research population
Respondents Population
Directors 4
Procurement Managers 12
Procurement Officers 34
Warehouse Officers 51
Total 101
Source: (Post bank Human Resource register)
3.3 Sample and sampling technique
This study will use stratified random sampling, to sample staff of POSBANK by cadre, because
it enabled the generalization of a larger sample size of percentage of the total population. A
sample size of 33 respondents will be drawn from the sample frame using simple stratified
random sampling to promote the needs for efficiency and representativeness. This is justifiable
by what
Kothari (2004) stated that a representative sample could be 30% of target population
28
Table 3.2.2 Sample size
Respondents Target population Sample size
Directors 4 2
Procurement Managers 12 3
Procurement Officers 34 10
Warehouse officers 51 18
Total 101 33
3.4 Data Collection Instruments
The data collection instruments to be used will be questionnaire which will be designed using the
variables identified as important for meeting the study objectives. A closed- ended and open
ended questionnaire will be administered to the respondents. The questionnaire will be used since
it will be easy to administer and with data to be obtained will be easy to analyze, Mugenda and
Mugenda (2003). Secondary data will also be used to collect data from existing sources in the
organization.
3.5 Data collection procedure
The questionnaire will be administered using a drop and pick later method. The respondents in
the questionnaire will be 33 employees. The primary source of data collection method to be used
in the study included use of questionnaire that will be used to source for crucial information. The
questionnaire is both open and closed ended questions in order to enable effective data collection
filled in the questionnaire.
29
3.6 Pilot testing of the research instrument
Pre-testing of the instrument is undertaken prior to the main study on a group of respondents. The
sample size population for this study is 33 respondents, hence 3 respondents from the sample
size was sufficient for the purpose of pilot testing to ascertain the suitability, appropriateness and
clarity of the questionnaire items in addressing the variables under investigation and at the same
time determine the reliability of the instrument. The selected respondents for the pilot test were
not again used in the main study
3.7 Reliability and Validity of the Study
Validity will be achieved by having objective questions included in the questionnaire. This will
be achieved by pre-testing the instrument to be used to identify and change any ambiguous,
awkward or offensive questions and technique. Reliability, on the other hand, refers to a measure
of the degree to which research instruments yield consistent reached. In this study, reliability
analysis using Cronbach Alpha to show how best the variables are best suited for the
questionnaire was done.
3.8 Data analysis and presentations
There are three objectives in data analysis; getting a feel for the data, testing the goodness of the
data, and answering the research question, establishing the goodness of data lends credibility to
all subsequent analysis and findings because it measures the reliability and the validity of the
measures to be used in the study. The study thus, used descriptive statistics and will integrate
both qualitative and quantitative techniques in the data analysis. By the use of pie charts and
graphs or tables, the data will be presented diagrammatically. This is after the data was analyzed
using SPSS. This type of presentation will be efficient in that it was easy to depict data more
accurately.
30
CHAPTER FOUR: DATA ANALYSIS, RESEARCH FINDINGS AND DISCUSSION
4.0 Introduction
This chapter presents the study findings on factors influencing implementation of competitive
strategies in the insurance industry in Kenya. The main objective of the study was to analyze the
factors influencing implementation of competitive strategies in the insurance industry in Kenya.
The study was guided by the following specific objectives:-. To determine the role of
communication on competitive strategy implementation in the insurance industry in Kenya, To
establish the extent to which organizational culture influence implementation of competitive
strategies in the insurance industry in Kenya, To determine the role of organization resources
allocation on the implementation of competitive strategy.
4.1 Response Rate
The questionnaires were given to a sample of 33 respondents from the PostBank branches in
Nairobi in Kenya. All the 33 out of 33 questionnaires were received from the respondents. This
indicates that this research had a response rate of about 100% thereby demonstrating a
willingness of the respondents to participate in the study. This is shown in the figure 4.1 below
31
Figure 4.1 showing response rate of the participants
Response Rate
Responded Did not Respond
0%
100%
Source: Research data, (2022)
4.2 Biographical Information of the Respondents
4.2.1 Position of employees
Thirty three respondents took part in the study. The participants were all Postbank employees as
per the day of undertaking the research and held different positions as below.
Figure 4.2.1 showing employees’ position in the firm

Additionally, to further enhance and achieve the objectives of this study, the study kept under
consideration other departments owned by the bank. These departments included warehouses
among other sections in the bank and are dispersed throughout the country.
32
Position in the firm
60% 55%
50%
40% 33%
30%
20%
6% 6%
10%
0%
Warehouse Procurement Procurement Director
officers officers Managers
From the data above, the study indicated that 55% of the respondents were warehouse officers,
33% procurement officers, whereas 6% of the total respondents were managers in procurement.
Directors also formed 6% of the total proportion of the respondents. This clearly showed that
warehouse had the highest number of employees.
Figure 4.2.2 showing highest level of education of the employees

The study sought to find out the employees’ highest level of education in the banking institution.
The respondents were selected using simple random sampling and the participants were from
varied educational backgrounds as shown in the figure below.
33
Education level
Degree holder
Post-graduate holder
7.00%
Diploma holder
21.00%
42.00% Other certifications
30.00%
The study revealed that 42% of the employees in PostBank were University graduates with
various degrees. They closely followed by 30% of employees who had post-graduate degree,
whilst 21% of the respondents had diploma certificates that qualified them to be employees of
the bank. The remaining 7% had other education levels. This is an indicator to how the bank has
a bigger pool of highly educated employees.
Table 4.1 showing work experience of the employees
The study sought to establish the work experience of the employees in the bank. This was then
tabulated below.
34
Statistics
work experience
Valid 33
N 0
Missing
Mean 2.42
Std. Error of Mean .169
Median 2.00
Std. Deviation .969
Variance .939
Minimum 1
Maximum 4
The average working experience for the respondents was 2.42years. This was realized by the
study by looking at the minimum and the maximum years that the employees have worked. The
study realized that the maximum years worked by any employee is 4 years whereas the minimum
worked was 1 year.
4.3 Effects of outsourcing on bank performance
The Findings of Pen and Littleton (2001) show that effective communication is a key
requirement for effective strategy implementation. In this study outsourcing of goods and
services was measured using indicators such as expertise and quality of services.
35
Table 4.2 showing outsourcing of goods and services
reasons to outsource
Frequency Percent Valid Percent Cumulative
Percent
15 45.5 45.5 45.5
6 18.2 18.2 63.6
5 15.2 15.2 78.8
5 15.2 15.2 93.9

lack of expertise in the
firm it was more effective 2 6.1 6.1 100.0
improve quality of services
Valid strict timeline others Total 33 100.0 100.0
According to the data presented, Post bank employees are of the opinion that the company’s
major reason for outsourcing is when they lack the right expertise in the company. 45.5% (15)
respondents thought that the company outsources only when they lack the expertise ‘in-house’
18.2% (6) were of the opinion that they outsourced when it was cost effective whilst 15.2% (5)
were of the opinion that they outsourced either because they needed to improve quality of
services or strict timelines.
Table 4.3 showing drawbacks of outsourcing
outsourcing is disadvantageous
Percent
36
13 39.4 39.4 39.4
13 39.4 39.4 78.8
5 15.2 15.2 93.9

strongly
disagree 2 6.1 6.1 100.0
disagree not
Valid sure agree Total 33 100.0 100.0
However, only 78.8% thought outsourcing as disadvantageous whilst 21.9 were either not sure
whether it was disadvantageous or either agreed with the statement that outsourcing was
disadvantageous.
We further conducted a descriptive analysis test, to establish the effect outsourcing has had on
organization performance. The results were as follows:
Figure 4.3.1 showing effects of outsourcing

Slightly 42.42% strongly agreed as they said that outsourcing has greatly improved organization
performance. 39.39% of the respondents agreed that outsourcing has had great effect on
organization performance while only 9.09% of the respondents saying they did not agree that
37
outsourcing has in anyway affected organization performance. 6.06% of the respondents were
indifferent to the fact that outsourcing improved organization performance. We therefore note
that a majority of the respondents agreed that outsourcing has greatly positively affected
performance.
Table 4.3 showing drawbacks of outsourcing
outsourcing is disadvantageous
Percent
13 39.4 39.4 39.4
13 39.4 39.4 78.8
5 15.2 15.2 93.9

strongly
disagree 2 6.1 6.1 100.0
disagree not
Valid sure agree Total 33 100.0 100.0
However, only 78.8% thought outsourcing as disadvantageous whilst 21.9 were either not sure
whether it was disadvantageous or either agreed with the statement that outsourcing was
disadvantageous.
38
We further conducted a descriptive analysis test, to establish the effect outsourcing has had on
organization performance. The results were as follows:
Figure 4.3.1 showing effects of outsourcing

Slightly 42.42% strongly agreed as they said that outsourcing has greatly improved organization
performance. 39.39% of the respondents agreed that outsourcing has had great effect on
organization performance while only 9.09% of the respondents saying they did not agree that
outsourcing has in anyway affected organization performance. 6.06% of the respondents were
indifferent to the fact that outsourcing improved organization performance. We therefore note
that a majority of the respondents agreed that outsourcing has greatly positively affected
performance.
4.4 ICT and its role in SCM
The distinctive competencies of any firm arise from two sources, that are its resources (man, ma
chine, materials, land, state of art, methods) and capabilities. A differentiating competency a
39
bility that allows banking institutions to achieve superior efficiency, quality, innovation or
customer responsiveness through. ICT and thereby attain a competitive advantage (Nguyen,
2008). The primary objective of any firm is sustained competitive advantage by maintaining
strong growth rate and high profitability. In this Study, indicators such as adoption of ICT was
used to realize this specific objective.
4.4.1 To examine the role of ICT in the SCM in the banks.
Postbank has not only adopted but also incorporated the use of information technology into their
operations.
Crosstab Count
does your org have proper ICT Total
implementation
no yes
very small extent 1 11 12
small extent
moderate extent 1 7 8
adoption of ICT in the firm
very great extent 1 7 8
0 5 5
Total 3 30 33
Further we conducted a one ample t-test to prove whether or not the above statement is true.
Having the null hypothesis being that they have adopted modern technology and the alternative
hypothesis being that post bank have not adopted modern technology.
One-Sample Test
Test Value = 0
t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the
Difference
Lower Upper
adoption of ICT in the firm 11.366 32 .000 2.182 1.79 2.57
40
The results show that at 95% confidence interval with P<.05, df =32, post bank has adopted the
use of modern technology into their operations.
Table 4.4.1 showing adoption of ICT in the firm
adoption of ICT in the firm

Percent
very small extent 1 3.0 3.0 3.0
small extent 4 12.1 12.1 15.2
moderate extent 12 36.4 36.4 51.5
very great extent 16 48.5 48.5 100.0
Valid Total 33 100.0 100.0
This result is in tandem with the opinions of the employees when asked whether they taught the
company used technology. 16 of the respondents (48.5%) were of the opinion that the company
well adopted technology, 12 of the respondents (36.4%) thought technology was adopted to a
moderate extent by the company procedures 4 (12.1%) thought the company adopted technology
to only a small extent whilst only 1 (3.0%) thought the adoption of technology to company
operations was only to a very small extent.
Figure 4.4.1 showing role of ICT in the firm

The use of ICT in banks has several roles, a descriptive study of the main roles of the Use of ICT
revealed that
41
Majority of the respondents (over 57%) said that the main role of ICT in Postbank was to
facilitate the faster processing of transactions in the bank, slightly over 33% of the respondents
averred that the major role of ICT was to enhance efficient data management of client
information, whereas
9.09% said that ICT was intended to prevent fraudulent activities in the banks.
This clearly shows that ICT plays a major role in enhancing and entrenching the SCM practices
in the bank.
4.5 Strategic Partnership and its extent
Supply Chain Management has been defined to explicitly recognize the strategic nature of
coordination between trading partners and to explain the dual purpose of Supply Chain
Management: to improve the performance of an individual organization and to improve the
performance of the whole supply chain contends that strategy implementation must be owned by
everyone, and to achieve this staff meetings are very necessary. Lack of compatibility of
strategy and culture can lead to resistance to change and frustrate strategy implementation
42
efforts. In this study, indicators such as partnership, practices, were used to realize this desired
objective.
Table 4.5.1 showing importance of partnership in the banking sector.

importance of partnership to an organization
. Frequency Percent Valid Percent Cumulative
Percent
not important don’t 1 3.0 3.0 3.0
know important 6 18.2 18.2 21.2
very important 8 24.2 24.2 45.5
extremely 9 27.3 27.3 72.7
important 9 27.3 27.3 100.0
Valid Total 33 100.0 100.0
Majority of the respondents were of the opinion that partnerships were important to the
organization in fact 26 (78.8%) of the respondents said that partnerships were either important,
very important or extremely important. The remaining 6 (21.2%) were either non-committal or
cited the unimportance of the partnership to organizations.
43
Table 4.5.2 showing partnership embrace
embracing of partnership
Percent
small extent 4 12.2 12.2 15.2
great extent 11 33.3 33.3 75.8
Valid Total 33 100.0 100.0

Figure 4.5.1 showing embracing partnership
Embracing partnership
33.30%
35.00% Great extent
27.30% Very great extent
30.00%
24.20%
25.00% Small extent
Very small extent
20.00%
12% Moderate extent
15.00%
10.00%
3%
5.00%
0.00%
1
Additionally, the employees said that Postbank has actively embraced partnership as the next key
to business success and improved performance and productivity as evidenced by the 33.3% who
thought embraced partnership improved business to a great extent, 24.2% very great extent and
44
27.3% moderate extent respectively. Of the respondents that responded only 15.2% thought that
the organization has embraced partnership to a very small extent.
Table 4.5.3 showing influence of procurement practices

procurement practices affect your org performance
Percent
Valid yes 33 100.0 100.0 100.0
All the respondents (100%) thought that procurement positively affected business performance.
However on to what extent they thought supply chain management affected business
performance they gave varied information with majority of them being of the opinion that it
affected performance to a great extent whilst only 15.1% thinking it only affected performance
to a small extent as shown below.
Table 4.5.4 showing extent of SCM practices

what extent has scm practices increased ur org performance

Percent
small extent 4 12.1 12.1 15.2
great extent 14 42.4 42.4 84.8
Valid Total 33 100.0 100.0
4.5.1 Organization performance and Supply Chain management practices.

We further conducted a study to try establishing whether there is any relationship between the
performance of the organization and their supply chain management practices. In the study we
45
asked every person whether they agreed with the statement. And evaluated how the company has
performed ever since they started actively implementing the supply chain management practices
included in the study. The results obtained are as below
Table 4.5.5 showing SCM practices on organization performance

SCM practices positively affect organisation performance
Frequency Percent Valid Percent
Cumulative
Percent
strongly
1 2.9 3.0 3.0
disagree
disagree not 1 2.9 3.0 6.1
sure agree
strongly agree 5 14.7 15.2 21.2
Valid Total
11 32.4 33.3 54.5
System
15 44.1 45.5 100.0
33 97.1 100.0
1 2.9
Missing
Total 34 100.0

Figure 4.5.2 showing positive effects of SCM practices
46
From the findings above, 45.5% (15) of the respondents strongly agreed with the statement,
33.3% (11) respondents agreed with the statement whilst 15.15% (5) respondents were not sure
whether there was any positive relationship between organization performance and the supply
chain management practices only 6% (2) of the respondents disagreed with the statement that
there was any positive relationship between organization performance and supply chain
management
practices.
47
4.6 Globalization of SCM
Globalization has dramatically changed how manufacturers operate, offering an opportunity to
reach new customers in new markets while at the same time exposing firms to greater
competition. Meanwhile, raw materials and supplier relationships must now be managed on a
global scale. Just as there are benefits and costs of globalization, there are similar pros and cons
of a global supply chain (Chan & Lee, 2005). In particular, companies need to manage the
related risks. With the onset of globalization, managing supply chains has become more complex
and business critical than ever before thus the need for effective risk management along the
supply chain for manufacturers to minimize disruptions and resume normal business conditions
quickly in the event of an outage.
In this study, such indicators as competition and consumer demand were used to help realize the
desired objective.
Table 4.6.1 showing assess the extent of globalization of Supply Chain Management on the
performance of banks.
globalization has been advantageous to you

Percent
strongly 2 6.1 6.1 6.1
disagree 5 15.2 15.2 21.2
Disagree not 7 21.2 21.2 42.4
sure Agree 9 27.3 27.3 69.7
strongly agree 10 30.3 30.3 100.0
Valid Total 33 100.0 100.0
Additionally on the objective of globalization, 10 respondents (30.3%) strongly agreed that
globalization has been advantageous to the company, 9 (27.3%) agreed with the statement that
48
globalization has been advantageous to the company whilst only 2 (6.1%) strongly disagreed
with the statement.
Table 4.6.2 showing reasons for globalization

Which of the following do you consider main reason for globalization?
Percent
13 39.4 39.4 39.4
increase global competition

between countries in the
sector take advantage of 11 33.3 33.3 72.7
foreign growth in the

countries in the developed
world to increase the rising 4 12.1 12.1 84.8
consumer demand and

diversify consumer needs
development of govt 5 15.2 15.2 100.0
assistance in developing
treaties and better global
environment
Valid Total 33 100.0 100.0
49
Figure 4.6.1 showing reason for globalization
showing reasons for globalization

120
100
80
60
40
20
0
Valid Source: Research data, (2015)
Figure 4.6.1 showing reason for
globalization
Series1 Series2 Series3 Series4 Series5
Another interestingly important fact noted were that majority of the employees thought that the
main reason for globalization was it was meant to increase global competition in the sector. More
specifically 39.4% whilst only 5 (15.2%) were of the opinion that the main reason for
globalization was development of government assistance in developing treaties and better global
environment. Additionally, to determine the extent of globalization of supply chain management
on the performance of the institution, we undertook a descriptive analysis study, the results
showed that:
50
Figure 4.6.2 showing globalization of SCM
A majority of the respondents are of the opinion that globalization of the supply chain
management has positively affected organization performance, 12% of the respondents disagreed
with the statement that globalization of the supply chain management positively affects
organization performance. Only 12.12% of the respondents were indifferent of the statement.
Therefore we note that globalization of the supply chain management positively affects
organization performance.
4.7 Summary of the Chapter
This chapter dealt with analysis and discussion of the research findings. The study used one
sample t-test and correlation analysis to evaluate the impacts of supply chain management
practices on performance of the banks. The next chapter deals with summary, conclusion and
recommendations.
51
CHAPTER FIVE
SUMMARY CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction
The chapter presents the summary of the study’s findings, conclusions, recommendations, and
suggestions for further studies
5.1 Summary of Findings
The concept of supply chain measurement created by Holmberg (2000) is based on systems
thinking. Instead of treating performance measurement systems of each organization, Holmberg
recommends to design one system that covers the whole supply chain. Performance measurement
needs to be treated as one inter-organizational system, not fragmented and split between each
organization.
Competitive strategies are very important for survival of an organization in a competitive
environment; it is therefore important for an organization to formulate and implement
competitive strategies. The main purpose of the study was to analyze the factors influencing
implementation of competitive strategies in the insurance industry in Kenya. The study was
conducted through a descriptive design with a target population of 33 respondents from the
selected Postbank branches in Nairobi County. Data was collected using a structured
questionnaire. The summary of findings on each objective were as follows
5.1.1 Effects of outsourcing on bank performance
The study sought to examine the effects of outsourcing on bank’s performance. It was established
that 45.5% of the respondents said that the company outsources only when they lack the
52
expertise within, as 18.2% thought that organizations such as banks did outsourcing when they
felt it was to cut costs. Lastly, 15.2% of the respondents thought that banks outsourced because
they needed to improve quality of services or when they work on strict deadlines.
However, it was noted by the respondents that the banks complained of the downside of
outsourcing. The respondents were categorical that outsourcing was disadvantageous as
evidenced by 78.8% of the responses. In view to establish whether outsourcing improved
banking institutions, 42.42%, which was the majority of the respondents strongly agreed while
on the other side 9.09% totally disagreed with this view.
5.1.2 ICT and its role in SCM
The study wanted to evaluate the role of ICT in the performance of banking institutions. On
adoption of technology, 48.5% of the respondents confirmed that banks adopted technology. This
was the majority proportion, while 3% thought the adoption of technology was to very
insignificant extent. On the role that ICT plays on management and performance of the banks,
most of the respondents 57% said that the main role was to facilitate the faster processing of
transactions in the bank. The least proportion 9.09% of the respondents cited the need to curb
cases of fraud in the banks as the main role of ICT.
5.1.3 Strategic Partnership and its extent
The reviewed the extent of strategic partnership on the performance of banks. The study findings
on the importance of strategic partnership showed that 78.8% of the respondents agreed that
partnership was important to the success of the banks, as 21.2% gave a contrary view by saying
that strategic partnership was not important. In addition, a fair proportion 33.3% of the
53
respondents said that banks embraced partnership to improve business and productivity. On SCM
practices,
84.8% thought that these practices increase the performance of the banks. The respondents
45.5% further said that there was a positive relationship between banks performance and supply
chain management practices.
5.1.4 Globalization of SCM
The study examined the influence globalization of SCM had on banks. 30.3% of the respondents
said that globalization has been advantageous to the banks. On increasing competition, 39.4%
said that globalization increased competition as 15.2% said that it was meant to develop
government assistance in treaties and environment. Supply management positively affected
organizations such as banks 75.88% asserted that globalization positively affected performance
of banks.
5.2 Conclusion
From the study findings, it is concluded that outsourcing, ICT, strategic partnership and
globalization affected performance of the banks in the banking sector. In terms of outsourcing;
lack of expertise, improved quality services and strict timelines influenced performance in great
extent; lack of expertise in the banking institutions affected performance of banks in mobilization
to executing competitive strategies. The role of ICT therefore influenced the implementation of
competitive strategies in the banks as it determined the adoption and the appropriate roles that
improved performance of the banks. Proper strategic partnership affected performance of banks.
Finally, globalization affected performance through its advantages and its roles.
54
5.3 Recommendations
Based on the research findings, it is recommended that the institutions should improve on the
mode of outsourcing. They should choose a mode that is appropriate and will maximize the goals
and objectives of the organization so as to enable execution of the competitive strategies in place
that enhance performance.
Further, it is recommended that using technology that does not support crucial realization of
objectives should be sidestepped by first ensuring that all employees are well inducted into their
roles and space in service delivery by using the appropriate technology.
5.4 Suggestions for further study
The study recommends that further study be done on Integrated ICT tools as most of the existing
supply chain packages have a Performance Measurement module as part of it. Future
performance measurement systems will have enterprise wide, integrated ICT tools that will
extract, collect and elaborate data characterizing their business in the bank as future performance
management systems in the SCM will be more ICT dependent.
It is recommended that further studies be conducted on Integration of Operation Research since
there have been attempts to integrate multi criteria decision making tools like Analytical
Hierarchical Process (AHP) and Data Envelopment Analysis (DEA) with existing PMS
frameworks to enhance effectiveness of future SCM.
Additionally, it is recommended that further studies is done on emerging themes in supply chain
performance management systems such as: Measure and manage risk in extended supply
networks; Aligning performance measures to achieve strategic objectives; Recognizing and
55
incorporating the varying cultural elements in the supply network; and Response to a volatile
demand led environment that may include lean and agile elements.
Lastly, further studies should be conducted in the area of Soft Issues as there is a need to develop
deeper understanding of the soft issues that make or ruin supply network management and
development. There will be more focus on the central relationship between culture and
performance measurement and how this varies in different countries in a global context.
56
REFERENCES
Besterfield, D. H. (2011). Total Quality Management. New York; Pearson Education, ISBN
81775841X
57
Birmingham, D. W. (2003). Using Research Instruments; A guide for researchers. London:
RoutledgeFalmer.
Chan, C. K., & Lee, H. W. J. (2005). Successful strategies in supply chain management.
Harrisburg, Pa: Idea Group.
Collinson, and Melvin, J. (2012). From complexity to simplicity: Unleash your organization’s
potential. London: Palgrave Macmillan.
Dawson, C. (2002) Practical Research Methods. New Delhi: UBS publishers.
Cunningham, S. R. (2008). Financing creative industries in developing countries. Creative

industries and developing countries: Voice, Choice and Economic growth, Routlegde Londonand
New York, pp.65-110.
Abdul Aziz, A. B. (2001) ‘Partnering an innovative and effective project organization concept’,
Journal of Procurement management, Vol. 43 No. 4, pp. 32-7.
Ackhoff, Russel. (1981). Creating the corporate future; Plan or be planned for. New York;
Wiley.
Ansari, A., Lockwood, D.L. and Mondareress, B. (1999) Enabling knowledge sharing in supply
chain management; A case study in the wood furniture sector, information knowledge and
systems engineering, Vol. 36 No.6,pp. 385-94
Boddy, D., Macbeth,, D., Charles, M. and Fraser, H. (1998) Success and failure
Battagia, A.J., 1994, "Beyond logistics: supply chain management", Chief Executive, 99, 48-9.
Blackwell, M., 1994, "Building strong ties", Distribution, 93, 16, 42-3.
Blaser, J., Westbrook, B., 1995, "The supply chain revolution: is your company its own worst
enemy?", APICS - The Performance Advantage, 5, 1, 43-8.
APPENDICES
58
APPENDIX 1;
Figure 4.6.2 showing globalization of SCM
QUESTIONNAIRE TOOL
Part A; Demographic information
59
Please tick where appropriate
Name (optional)…………………………………………………………………
What is your highest level of education?
Diploma ( )
Degree ( )
Postgraduate degree ( )
Others………………………………………………
Please indicate your work experience
Below 1 year
2 to 5 years
5 to 15 years
Above 15 years
Name of the firm and the department………………………………………………..
Part B; Assessment of Supply Chain Management Practices
Section A; Information and communication technology adoption.
To what extent have the following aspects of the adoption of ICT in the supply chain have been
put in place in your department?
Information technology adoption:
Very small extent [ ]
Small extent [ ]
Moderate extent [ ]
60
Great extent [ ]
Very great extent [ ]
Organization invest resources heavily on the infrastructure of an information system
Organization trains employees on information system future maintenance support
Organization uses information to aid business decision making
Organization provides training for employees to utilize information system effectively
In your own view what do you think the organization should do in order to ensure adoption of
ICT is effective and efficient?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
…………………………………………………………………………………………………….
8. What is your level of agreement with the following statements relating to the types of ICT
technologies in your organization?
Type of technology:
Strongly Agree [ ]
Agree [ ]
Not sure [ ]
Disagree [ ]
Strongly disagree [ ]
61
There is training of staff on new technologies
The organization moves with the current technological trends
The organization invest resources on technology
Junior staff are well informed about the movement of technological advances in the organization
In your view, which technology do you recommend the organization to acquire in order to ensure
the organization performs?
………………………………………………………………………………………………………
…………………………………………………………………………………………………….
9. What is the understanding of your team on the concepts of ICT?
ICT is necessary ( ) ICT is unnecessary ( )
10. Does your organization have a proper ICT implementation program?
YES ( ) NO ( )
If YES explain how the organization ensures that the program is well articulated to all the staff
in all level.
………………………………………………………………………………………………………
……………………………………………………………………………………………………..
Section B; Globalization.
11. Globalization has been considered to be advantageous to organizations. To what extend have
the following advantages accrued to your organization?
62
Advantages of Globalization:
Strongly Agree [ ]
Agree [ ]
Not Sure [ ]
Disagree [ ]
Globalization has increased firms’ opportunities to develop customer markets worldwide
Globalization has increased my firms’ opportunity for trade and investments
Globalization has increased my firm’s market potential
Globalization has increased my firm’s profit base
In your own opinion why do you think globalization should be embraced in
organizations?....................................................................................................................................
..........................................................................................................................................
12. Which of the following factors do you consider as the main reason organizations should
globalize its operations
Reason for Globalization:
63
Increase in global completion between countries in the sector
To take advantage of the foreign growth in the countries in the developed world
To increase the rising consumer demand and to diversify consumer needs
Development of infrastructure and government assistance in developing treaties and better global
environment
Make general comments on the above
………………………………………………………………………………………………………
………………………………………………………………………………………………………
Section C; Partnership
13. How important do you think partnership is to an organization? Tick where possible
Extremely important ( )
Very important ( )
Don’t know ( )
Not important ( )
14. To what extent does your organization embrace the following initiatives of ensuring
independent strategic supplier partnerships are implemented?
Partnership initiatives:
Great extent [ ]
64
Moderate extent [ ]
Small extent [ ]
Organization creates and maintains good relationship with their partners such as suppliers,
distributors and customers.
Organization has precise information about its partners
Organization cooperates with its partners in implementing business activities
Organization joins the overall business operations e.g. joint marketing, procurement and human
resource management.
Organization shares their resources with its partners for business success e.g. financial
information, human resource, customer base and competitors.
Please make any general comments on the above
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
Section D; Outsourcing.
15. Does your organization outsource for its product goods and services?
YES ( ) NO ( )
16. If YES what lead you to the decision to outsource the above?
65
Reasons for Outsourcing
We did not have the expertise in the house: Yes [ ] No [ ]
We felt it was more cost effective to outsource: Yes [ ] No [ ]
To improve the quality of these services: Yes [ ] No [ ]
We had a strict time line on a project and outsourcing was the only option to get things done on
time: Yes [ ] No [ ]
Others – Please specify
………………………………………………………………………………………………………
………………………………………………………………………………………………………
…………………………………………………………………………………………………........
17. What does the organization mostly outsource from the international markets? (Tick where
appropriate)
Fast moving consumer goods. ( )
Slow moving consumer goods. ( )
Services ( )
18. In your opinion what do you consider the disadvantages of outsourcing to be? Please tick all
the statements you agree with.
Disadvantages of outsourcing:
Strongly Agree [ ]
66
Agree [ ]
Not Sure [ ]
Disagree [ ]
Strongly Disagree [ ]
Quality is compromised since the company could only outsource to undertake the profit
We no longer full control of the business process - quality is likely to suffer
The company that could take on our outsourced work do not understand our business and this
could cause problems It is not cost effective
The risk of outsourcing contract going wrong and being too costly to reverse the decision is too
high.
19. In your opinion, what do you consider the advantages of outsourcing to be?
Please tick all that apply.
Advantages of outsourcing:
Strongly Agree [ ]
Agree [ ]
Not Sure [ ]
Disagree [ ]
Strongly Disagree [ ]
67
It is more cost effective
The quality of business process increases as experts are undertaking the tasks
The work is carried out quicker and more effectively
It reduces the costs such as payroll cost since we do not have to own employees
Management does not oversee the day to day running of the business process thus reducing the
burden on the management.
Part C; Assessment of Organizational performance
20. Do procurement practices affect the performance of your organization?
YES ( ) NO ( )
21. If YES, to what extent have the following practices of SC have increased organizational
performance?
SCM Practices:
Great extent [ ]
Moderate extent [ ]
Small extent [ ]
Outsourcing
68
Adoption of ICT
Globalization of its activities
Strategic partnership with its stakeholders e.g. suppliers
22. What is your level of agreement that due to application of the Supply Chain Management
practices organization have achieved the following
Achievement due to SC practices application:
Strongly Agree [ ]
Agree [ ]
Not sure [ ]
Disagree [ ]
Greater competitive advantage as compared to other organizations
Reduction of costs
Better resource management and performance
Optimization of business processes
In your view what other advantages do you think will the organization achieve due to the
application and adoption of the SCM practices?
……………………............................................................................................................................
............................................................................................................................................................
69
............................................................................................................................................................
23. Do you get top management support in ensuring the conformity to the stated SCM practices
in your organization?
YES ( ) NO ( )
24. Below are the benefits of the implementation of SCM practices to the performance of
banking organizations in Kenya.
Putting the organization into a global perspective
Ensuring the fulfillment and conformance of the organization to the requirements of the
customers
Rendering valuable information and and sharing of data between departments and partners.
Moving along with the technological order in the global scenes through ICT application.
Any other? State
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………….
Of the above benefits, which one do you think has put your organization at a strategic
competitive edge?
………………………………………………………………………………………………………
…………………………………………………………………………………………………..
Give reasons
70
………………………………………………………………………………………………………
……………………………………………………………………………………………………
APPENDIX II; WORK PLAN
ACTIVITY FEB MAR APR MAY JUN JUL AUG SEP OCT JAN
‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘15’
Literature
Review
71
Proposal
writing
Presentation
Piloting
Data collection
Data Analysis
Report writing
Project
submission
Project defense
72

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IMPACT OF SUPPLY CHAIN MANAGEMENT PRACTICES ON

THE PERFORMANCE OF BANKS IN KENYA: A CASE OF

SUBMITTED BY: KEVIN MWUGUSI

RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT

Admission Number 2019\06162

Outsourcing is the contracting out of a business process to a third-party. Outsourcing sometimes

A partnership is an arrangement in which parties agree to cooperate to advance their mutual

This is a conventional, traditional, or otherwise standardized method employed to achieve the

competitive advantage and improving organizational performance as competition is no longer

self-administered questionnaire procedure, where the questionnaires were administered to the

and goals of the banking institute.

1.1 Background of the study

Supply chain Management (SCM) entails managing a network of interconnected businesses

them to achieve a competitive advantage of continuity and reliability

customer management through distinguished services

end user connecting the information streams.

other strategic partners anchored on long term commitment.

non-bank institutions and Ksh.150 Million for building societies.

preparation of annual procurement plans as submitted by the respective departments, preparation

of annual procurement plans as submitted by the respective departments, advertisement of

tenders, preparation and processing of quotations, preparation of tender documents in

contract agreements as well as management of contracts, order follow up or processing of goods,

1.1.1 Kenya Post Office and Savings Bank.

efficiency and effectiveness of the SCM global objectives.

1.2 Statement of the Problem

measurement, improvement and management organizational processes. However, the supply

variables and the Kenyan banking organization performance.

1.3 General Objective

1.3.1 Specific Objectives

i. To determine the effect of Outsourcing of services and goods to the

extent of strategic partnership in the banking sector.

1.4 Research Questions

chain management affect banks performance?

1.5 Justification and Significance of the Study

be applied to increase their performance.

to conduct the study of this magnitude in Nairobi County.

SCM practices that enhance the performance of organizations.

interventions that need to enhance organizational performance in the service industry.

1.6 Scope of the Study.

1.7 Limitation of the Study.

respondents to give information during the data collection process.

Supply Chain Management (SCM) on the performance of banking organizations in Kenya.

existing literature, research gaps and summary.

2.2 Theoretical Framework

A theoretical framework can be defined as a collection of interrelated ideas based on theories. It

namely systems theory and strategic choice theory.

2.2.1 The theory of Constraints

Theory of constraints is an approach to the management of operations and it was developed by

constraint and restructure the organization around it

managers and the visible system elements.

organizations can be measured and controlled by variations on three measures throughput,

inventory into throughput.

2.2.2 Strategic choice theory

management, for instance, by stressing cross-functional cooperation in organizations (Jemison,

organizations. It is developed to underline the inadequacy of deterministic organizational views

opposing views to deterministic management theories, Campling and Michelson, 1998,

overall firm performance. As stated before, strategic choice theory is characterized by an

collaborate or rather exploit suppliers.

performance of their organizations and achieve a competitive advantage.