Selection of Suppliers and Its Influence to Organization Performance

SELECTION OF SUPPLIERS AND ITS INFLUENCE TO ORGANIZATION
PERFORMANCE
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16th April 2018

Introduction
Selection of suppliers is a critical component in procurement function which is performed before
any contract is awarded in organizations. ‘It involves carrying out appraisal and identification
process of supplier to be awarded contracts in order to perform certain organization
requirements’ (Nair, Jayaram & Das 2015, p.6265). Organization performance is critical if the
right suppliers are selected in a free and open manner. The research proposal outlines how
selection of suppliers can influence organization performance. Selection of suppliers is critical in
performance of an organization and it is important for an organization to ensure they work with
good, approved suppliers. The supplier selection process involves three steps; identification,
appraisal and awarding of contracts. Supplier appraisals entail using ranking and scoring
methods to establish a winner to be awarded contract. ‘Performance in organizations is measured
on the basis of quality materials, less wastage, and competitive products and services’ (Igarashi,
de Boer & Michelsen 2015, p.455).
Organizations employ different policies and procedures used to identify and select appropriate
suppliers. There has been various criteria’s used in selection of suppliers it may be based on
supplier performance, organization legislations and policies. ‘In other organizations the 10’c of
supplier selection is applied this include: character, competency, clean, capital, capacity,
capability, consistency, communication, cash and co-operation is used to selection of suppliers’
(Luthra et.al 2017, p.1687). ‘Recent studies have shown that there are some other negative
factors that influence the selection process thus leading to non-suitable performance to be
selected. Some of the factors include legislative, organization politics, and previous experiences’
(Sarkis & Dhavale 2015, p.178). The current study is seeking to establish how selection of
suppliers can influence organization performance.
Problem statement
Organization requires resources to support its several functions. Sourcing of requirements and
resources is the work of the procurement departments whereby they need to apply suitable
policies and procedures in order to identify the most qualified of them all. Several supplier
selection processes is done using paper work instead of supplier performances. Performance in
organization depends on proper selection of suppliers if done well it contributes positively and if

done badly it leads to poor performance. The current study is seeking to establish if selection of
suppliers can influence organization performance.
Research questions
The study will be seeking to answer the following questions:
i. How does selection of suppliers influence performance of organizations?
ii. Which are the negative factors which influence selection of suppliers in organizations?
iii. Which are the suitable methods of selecting suppliers in organizations?
Study justification
The study will be useful to several stakeholders both within and outside the organizations.
Management will have to come up with suitable methods that they can use to select suppliers to
ensure they will meet the required organization needs. Findings will be useful in identifying the
contributions brought by suitable supplier selection strategies in organization and its influence to
performance. It will enable the research to directly link organization performance and selection
of suppliers.
Research methodology
Literature review: Literature review will be important in identifying the gaps related to the study.
The secondary data will also be important in explaining the research questions provided in the
study. The sources will be from peer reviewed journals, books, magazines and recognized
company sites. The review of literature will be based on the themes of the study.
The study location will be multinational organizations within the region. The study will utilize
survey design, which involves collection of qualitative data through structured interviews with
top procurement managers in multinational companies. Purposive sampling technique will be
employed after a pre-study have been done to identify the number of respondents to be
interviewed. ‘Purposive sampling involves a non-probability method where all respondents are
selected due to the nature of information to be obtained from them’ (Taylor, Bogdan & DeVault ,
2015). The structured interview schedule will be generated based on the research questions of
the study. The respondents will be interviewed for a period of two weeks. Data collected during