Role Of Purchasing In The Achievement Of Organizational Objectives

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Role Of Purchasing In The Achievement Of Organizational Goals


Abstract


The purpose of this study was to determine the role of purchasing in the achievement of organizational objectives with particular to its activities in motels Nigeria Ltd Owerri. A descriptive survey design was adopted for the study. A total of 133 respondents made up managers, secretaries, senior staff and junior staffs were used for this study. The data collected were presented in tables and analyzed using simple percentages and frequencies. The determinants of procurement function on organization effectiveness were Proper utilization of resources, proper cut on stock out cost, low or no scrapes, shorter operations and production types low input, and high output. The challenges facing effectiveness of procurement department include lack of the right input of material, poor utilization of resource, lack of professionally qualified and experienced employees and technology change. Policy suggestions suggested for effective procurement function were as follows: Consistence and full compliances with the public procurement and disposal act, promotion of economy, efficiency and value for money practices, good practices and linkages with larger public finance management, enactment of applicable ethics in procurement e.g., avoidance of collusion and avoidable conflict of interests and equal opportunities and Government guidance on procurement procedures. This will provide insight to managers and directors on the cause of action to take in order to enhance the realization of corporate goals.


Chapter One


Introduction

1.1 Background of the Study

The evaluation of mass production which so much relievers upon a continue flow of right materials has brought an impact and the need to improve purchasing participles and management.

Furthermore, the effects of shortage high price of commodities and allied improvisation have caused the problem of material and services to intrude into boardrooms of much organization be it large or small, public or private and even in government agencies. As a result of this cost of materials and supplies for industrials and non- industrial purpose account for large proportion of the cost of the organization expenditure. When purchased items accounts for such of high proportion of the organization expenditure when prices of goods are fluctuating widely when numerous diverse items are constantly needed and when the quality of the materials a services appreciably influence the cost of service than an organization purchasing role becomes particularly very attention “ (Oyeoku) the purchasing role is to see that materials and services are provided at the lowest cost which is in correspondence with suitable quantity and safety. Purchasing must work other department of the organization as its role involves other factors some prior or subsequent to the actual ordering. These facts include the investigation and selection of sources of supply working for alternative materials, the expediting or follow up order which will eventually enable the buyer ensure prompt deliveries the transportation and packaging aspect the transportation storing and issuing the materials so revived it has there become a complex function and needs a help of practitioners to be effectively carried out and required adequate training in purchasing and supply management techniques. Practitioners need to belong to the appropriate purchasing and supply institutes.

It is important to note that the institution is guided by the procedure and purchasing manual being employed purchasing like modotels Nigeria Ltd Owerri is an act of procuring materials, supplies and services to further the services rendered for the consumption of the public the function has to be executed within the frame work of the law of the organization or the particular agency, which might be otherwise executed in the private sector without fear of running foul of the law the organizational purchasing office has advantage, which is not available to those in the organization.

However, the manager of the organization in recent years has given much attention to the direct contribution which purchasing activities can make to the savings of mottles Nigerian Ltd Owerri the purchasing function has a whole wide lot to offer it outs across all through the different department in mottles, Account, store, housekeeping food privilege, the maintained of cordial relationship with these department become increasingly important. Besides the “quantity” quality and the time factors are usually defined for the purchasing department by these department or others that may be responsible for specifying procurement requirements.


1.2 Statement of the Problem

The purchasing department plays a very important role to the success of any organization, whether in the public or private sector. The function is responsible for buying all the raw materials and supplies of the right quality of the quantity, from the right sources, at the right time and at the right price. Successful purchasing depends to a large extent on the ability to understand the various environments in which they operate. They should be fully aware of all legal requirements relating to purchasing practices within their organization. Knowledge of this will help them in the performance of their duties.The major problem of this research is to determine the role of purchasing in the achievement of an organizational objectives with particular to its activities in motels Nigeria Ltd Owerri to solve this problems in purchasing especially with relationship among the most critical of the variables, constraints and premises that bear upon the objective sought is very important. Purchasing decision result out of research investigation and findings which is a vital aspect of the typical research. The purchasing manager or any one concern with any branch of purchasing is faced with the problem of what quality. This question can be answered when data has been collected and analyzed for dependable information. It is wise to undertake reliable research before decisions are taken because most of the decisions are made under dynamic conditions.


1.3 Objective of the Study

The objectives of the study are;

  1. To ascertain the use of quantitative statistical analysis method in the organization
  2. To ascertain the duties and performance of the purchasing unit in the organization
  3. To ascertain whether purchasing unit fulfilled their mission the organization
  4. To ascertain the effect that contributes the savings in purchasing cost.

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: there is no use of quantitative statistical analysis method in the organization
    H1: there is the use of quantitative statistical analysis method in the organization
  2. H02: there is no effect that contributes the savings in purchasing cost
    H2: there is effect that contributes the savings in purchasing cost

1.5 Significance of the Study

The function performed by the purchasing department is concerned with the process of defining the organizations needs selecting goods and services. It is by its nature of a function oriented to providing a complete supply function service for users within the organization. In most manufacturing organizations producing consumer goods, purchasing is of primary importance and must be considered as one of the major functions alongside marketing, production and accounting.However, the importance of purchasing and its activity may not be the same for all organizations. In manufacturing organization where materials and services accounts for about 85 percent of its total input, there is no doubt that purchasing will become a very important function since it is known that if percent savings in purchasing can contribute the same amount as a markup of 20 percent on sales.


1.6 Scope and Limitation of the Study

The project focuses particularly on the relevance of purchasing function as it relates to the modotels Nigeria Ltd Owerri. More of the information needed for the study were received from questionnaire and interview administration to various department in the organization especially the bursary division where the purchasing unit is placed in other to ascertain the relevance of purchasing function in the organization. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.


1.7 Definition of Terms

Purchasing:

Purchasing refers to a business or organization attempting to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations.

Achievement:

An achievement, armorial achievement or heraldic achievement in heraldry is a full display or depiction of all the heraldic components to which the bearer of a coat of arms is entitled.

Organization:

An organization or organization is an entity comprising multiple people, such as an institution or an association, which has a particular purpose. The word is derived from the Greek word organ on, which means tool or instrument, musical instrument, and organ.

Objective:

Relating to or denoting a case of nouns and pronouns serving as the object of a transitive verb or a preposition.


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain role of purchasing in the achievement of organizational objective

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of purchasing in the achievement of organizational objective


5.2 Summary

This study was on role of purchasing in the achievement of organizational objective. Four objectives were raised which included: To ascertain the use of quantitative statistical analysis method in the organization, to ascertain the duties and performance of the purchasing unit in the organization, to ascertain whether purchasing unit fulfilled their mission the organization, to ascertain the effect that contributes the savings in purchasing cost. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff modotels Nigeria Ltd Owerri. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up managers, secretaries, senior staff and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


5.3 Conclusion

It was therefore concluded that the determinants of procurement function included. Availability of enough financial resources, type of management, the nature of services offered by organizations, and the market structure of the suppliers The determinants of procurement function on organization effectiveness were Proper utilization of resources, proper cut on stock out cost, low or no scrapes, shorter operations and production types low input, and high output The challenges facing effectiveness of procurement department include lack of the right input of material, poor utilization of resources, lack of professionally qualified and experienced employees and technology change. Policies suggested for effective procurement function were as follows: Consistence and full compliances with the public procurement and disposal act, promotion of economy, efficiency and value for money practices, good practices and linkages with larger public finance management, enactment of applicable ethics in procurement e.g avoidance of collusion and avoidance of conflict of interests and equal opportunities and Government guidance on procurement procedures.


5.4 Recommendation

That the schools‟ management should not focus on negotiation as a strategic procurement tool since it does not enhance the realization of corporate goals. Therefore the school should focus their attention on other strategies that would lead to realization of goals and objectives of the school. Further, the researcher recommended that future scholars should focus attention on other factors that influence the realization of corporate goals in organizations and institutions. This will provide insight to managers and directors on the cause of action to take in order to enhance the realization of corporate goals.


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