Comparative Analysis of Procurement Challenges in China and Nigeria

This report provides a comparative analysis of procurement challenges in the emerging markets of China and Nigeria. It examines the background of procurement activities, highlighting the importance of gaining a competitive advantage and increasing revenue. The research explores the research rationale and aims to analyze the challenges faced by companies in both countries. The report addresses research objectives, questions, and hypotheses related to procurement strategies, supply chain management, and sourcing. The literature review discusses procurement challenges in China, including supply chain management, government policies, and the need for investment. It also covers ethical supply chain issues and challenges faced by small and medium-sized businesses. The report then shifts focus to Nigeria, addressing issues such as delays in procurement management, challenges during tender stages, and pre-bidding procedures. The report also highlights challenges faced during supplier selection and the secrecy of evaluations. The report concludes with a discussion of the potential impact of these challenges and recommends measures to overcome them.

Running head: MANAGEMENT
Management
Name of student
Name of University
Author note

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Table of Contents
1. Introduction.........................................................................................................................3
1.1 Research background........................................................................................................3
1.2 Research rationale............................................................................................................3
1.3 Research aim....................................................................................................................3
1.4 Research objectives..........................................................................................................3
1.5 Research questions...........................................................................................................4
1.6 Research hypotheses.........................................................................................................4
2. Literature review.................................................................................................................4
2.1 Procurement challenges experienced in the emerging markets of China and Nigeria.....4
2.2 Solutions to mitigate such kinds of problems and challenges experienced in the
emerging markets of Chin and Nigeria..................................................................................6
3. Research methodology........................................................................................................7
3.1 Research philosophy....................................................................................................7
3.2 Research design...........................................................................................................8
3.3 Sampling method or technique....................................................................................8
3.4 Data collection.............................................................................................................8
3.5 Analysis of data...........................................................................................................9
3.6 Limitations...................................................................................................................9
3.7 Values and ethics.........................................................................................................9
4. Time and cost frame........................................................................................................9
References................................................................................................................................10

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A comparative analysis of Procurement Challenges in emerging markets: A case study
of Nigeria and China
1. Introduction
The research is done to focus on the various challenges and issues related to the
procurement and supply chain activities of companies within the emerging markets of Nigeria
and China. Though the level or degree of challenges differ according to the size of companies
and on the basis of industry from which these companies belong along with the operations
and processes managed within the emerging markets of Nigeria and China. At present, the
global sourcing within the markets that have been emerging are becoming more influential,
which has resulted in success of many companies (Pal, Wang and Liang 2017).
1.1 Research background
The background of research highlights the importance of procurement activities while
entering the new and emerging markets to ensure gaining competitive advantage and higher
revenue generation too. Though there are numerous benefits, still the, background of research
prioritises on the procurement challenges associated with this, which are needed to be
overcome for gaining sustenance within the emerging markets properly (Hexter and
Narayanan 2006). With the changing environment, the membership of China in the World
Trade Organization and European Union have created extensive sourcing activities, which
results in easy relocation to the emerging markets of Nigeria and China and even allows for
gaining competitive advantage in business as well. This relocation to the emerging markets
has also resulted in better communication management along with use of extensive
technologies for the purpose of entering new foreign markets by the foreign companies,
furthermore, ensure overcoming issues and challenges such as non-wage labour costs, rising
prices of products along with higher costs of production and other changes too (Hall, Löfgren
and Peters 2016).

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1.2 Research rationale
The rationale of the research is actually the problems of the research experienced and
are related to the various procurement challenges to be dealt with, while conducting a
comparative analysis of these issues and challenges within the emerging markets of China
and Nigeria. The procurement challenges also sometimes lead to extensive supply chain
management issues, which can not only deteriorate the entire business functioning, but also
can harm the overall business performance by affecting its ability to gain profit and make it
unable to attain a competitive edge over its competitors (Li, Georghiou and Rigby 2015).
Though this opportunity in global sourcing has allowed for moving into the emerging
markets of China and Nigeria, still there have been multiple issues and challenges associated
with it including the rising cost of materials’ transportation, higher costs incurred while
production along with market saturation issues and high prices of products and services too
(Aduwo et al. 2016). The research rationale also highlights the major challenges that are
faced by the companies to balance the sourcing process and activities for responding to the
challenges experienced in the various emerging markets too.
1.3 Research aim
The research aims to do a comparative analysis of the various procurement challenges
experienced within the emerging markets considering the case study of China and Nigeria.
1.4 Research objectives
 To identify the various challenges associated with the procurement strategies and
activities managed by the companies within the emerging markets
 To evaluate the various approaches managed by the business organisations to ensure
successful sourcing activities and management of supply chains
 To assess the probable effects of these procurement challenges and issues that are
experienced by the companies with the emerging markets of China and Nigeria

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 To recommend necessary measures for the purpose of overcoming the procurement
issues and challenges, furthermore, ensure survival within the emerging markets of
Nigeria and China with ease and effectiveness
1.5 Research questions
 How can the analysis of procurement challenges within the emerging markets of
China and Nigeria be compared?
 What are the different types of issues and challenges related to the procurement and
supply chain activities experienced by businesses within the China and Nigeria
emerging markets?
 What are the various approaches managed to by the businesses in these two countries
to ensure management of proper supply chains along with better sourcing and funding
related aspects too?
 What are the most suitable measures recommended to overcome the procurement
challenges associated with the emerging markets in China and Nigeria?
1.6 Research hypotheses
H0: The business organizations do not need to overcome the procurement challenges
associated with the emerging markets in China and Nigeria
H1: There is need for the business organisations to overcome the procurement issues and
challenges experienced within the emerging markets of China and Nigeria
2. Literature review
2.1 Procurement challenges experienced in the emerging markets of China and Nigeria
According to Hu et al. (2004), the emerging markets in China have spread at a faster
rate and due to this, there has been introduction of multiple supermarket chains, which
increased the sales to a large extent too. This immense development has been influenced by

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various factors that have been shared by the developing countries and also the China specific
policies, which also presented greater scopes and opportunities for the companies to manage
diversification of activities along with management of higher income prospects and systems
of procurement (Diamond 2015). Few of the major challenges faced include lack of supply
chain management in a proper way, implementation of Government policies, laws and
principles and developmental laws and programs controlled by the regulatory bodies of
China. Ayoola (2013) also added the fact that the supermarket chains have become
widespread all over China within quick time, but it has also resulted in the acceleration of
rates of diffusion along with the need for huge amounts of investments by the local as well as
foreign supermarket chains. The companies have survived in the emerging markets by
maintaining a centralised procurement process to ensure achievement of scale economies
along with the bargaining power too. The centralisation process has also helped in better
process of decision making and facilitated the distribution process too largely (Huang and
Yang 2017).
As stated by Wei, Xie and Zhang (2017), the companies have focused on the suppliers
who can create an impact on the environment, society as well as influenced the growth in
economy of the nation. In spite of this, there have been limitations and constraints in the
societal and economic development and also prioritised on the minimisation of negative
effects created on the environment. Considering the environmental aspects, the organisations
have chosen suppliers to reduce the occurrence of imbalances within the community and at
the same time, ensure strategic role of purchasing and manage sustainable development all
throughout too. From the perspectives of procurement and supply chain management
activities, there are ethical supply chain issues too with the focus on the management of
corporate social responsibilities (Wesseling and Edquist 2018).

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Based on the statement of Awodele et al. (2019), the challenges of procurement in
China are faced mostly by the small and medium sized businesses that source goods and
services from China to gain potential scopes and opportunities for sustaining in the
competitive business environment. The Chinese marketplace was suffering from problems
such as inability to retain the existing employees within the China office and also there had
been major communication issues, which created conflicts and hindered successful
management of communication between people too. There were difficulties in providing
appropriate training and developmental programs whereas many people did not want to move
from the headquarters to China and this was considered as major challenge too (Mahamadu et
al. 2018). Based on the survey responses and evidences, it was clearly understood that the
procurement performances of the businesses in China lacked, when compared to the
competitors and the size of cost reductions was not secure as well. This also led to various
concerns regarding the quality of goods and services produced and the sourcing of products
in China became much more difficult. Due to this, the prices of products tend to be higher
and also the associated business functions and processes, which reflected greater awareness
about the competitive challenges faced by the businesses in China (Zhang and Gutman 2018).
Based on the views and opinions of the respondents, it has been found that the cost of goods
and services that are purchased by the companies have remained a major issue or challenge,
which has not only affected the production, but also has created a negative impact on the
process of procurement, indirectly affecting the supply chain management negatively too.
On the other hand, from the Nigerian perspective, there have been multiple issues as
well such as the delay of procurement management process or plan while preparing budget
and managing approval too. There have been certain cases where the post adoption changes
managed by the organisations in Nigeria during the procurement activities, have prevented
the starting of procedures required to manage approved purchases (Cook 2015). As stated by

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Muhammad and Johar (2018), when the companies aim to survive in the emerging markets of
Nigeria, challenges were faced related to the conducting of appropriate assessments and
while engaging the beneficiaries. Though most of the nations do deliver information and data
associated with the outcomes of needs assessment and about the environmental impact
reports that have been managed during the progress of procurement, the people who have
been affected had often not been consulted or asked for opinions (Ehlers 2014). This has even
caused serious concerns and misunderstandings, hereby, led to negative mind sets among the
people who were involved in the entire process of procurement and supply chain
management activities.
From the statements of Danzon et al. (2015), it has been understood that the
procurement challenges were also faced during the tender stage in Nigeria, which often
resulted in preventing the limiting of competition for the public contracts managed. Few other
challenges of procurement also include not abiding by the legal requirements associated with
the posting and timing of the tender announcements. The compression of timelines could be
one of the major causes of such kinds of challenges while the inconsistency of tender
operations further escalate often with the display of major publications along with other
major challenges such as poor level of funding or expenses required to manage advertising
and promotions, etc (Caldwell and Howard 2014). The pre-bidding procedures while
surviving in the emerging markets of Nigeria, according to Warner (2017), could also narrow
down the scopes and specifications of a project, furthermore, make the entire project of
surviving in the emerging markets with ease difficult. There have also been exclusion of
multiple bidders during the procurement process while combating the informal tendering
procedures often have led to closed door negotiations. During the selection of major
suppliers, there are challenges faced by the companies too, which can not only hinder the
supply of raw materials and resources needed to facilitate the production and manufacturing

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processes too (Williamson and Yin 2014). The secrecy of evaluation has been hindered and
this has led to losing a number of bidders and unable to blow the whistle whenever required
while in certain cases, the concerns were treated with impartiality too. Considering the case
scenario of Nigeria, the complaints procedure has been neglected and the concerns were
treated with impartiality (Rauch, Dallasega and Matt 2016). There also has been another
major challenge of poor accessibility to the contractual related information, due to which, the
companies often experienced risks and threats to gaining public access to these contracts.
This further increased the budget of managing the procurement project within the concerned
market that has emerged, furthermore, created complexities while presenting significant
opportunities for the reduced value of money associated with the entire project (Correia et al.
2013).
While the procurement challenges in China included the high costs of production and
costs inured while managing the supply chains, on the other hand, the procurement
challenges faced in Nigeria were the delay in processing of payments and also the lack of
information available to make assessment of the market conditions. According to Gereffi
(2013), the poor functioning publicly financial management systems and management tools
used with the help of paper works have further resulted in increase of lead times required to
make payments. Due to the delay in payments, the appeal of public procurement scopes and
opportunities in Nigerian emerging markets has further been reduced, thereby, resulting in
poor management of flow of cash for the small and medium sized business organisations.
There also had been very less amount of information and data available needed to manage
project implementation and at the same time, hindered he successful management of
payments. Due to this, the individuals who want to purchase products and services from the
marketplace and the Government bodies have been prevented from managing procurement,
thereby, resulted in ineffective delivery of services. The auditing bodies and frameworks also

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lacked enough capacity as well as resources that were needed to deliver value for money
services to the customer with ease and efficiency (Hellweg and i Canals 2014). Considering
the analysis of these procurement challenges experienced in both the emerging markets of
China and Nigeria, the e-procurement solutions could be effective and the integration of these
solutions with the PFM systems could decrease the chances of risks associated with the on-
time payment processing and also facilitate proper monitoring of payments. This would also
help in managing proper flow of data and information, furthermore, conduct posteriori
oversight, which has been required for the purpose of overcoming the procurement
challenges and issues much more comprehensively (Baker and Wlokas 2015).
2.2 Solutions to mitigate such kinds of problems and challenges experienced in the
emerging markets of Chin and Nigeria
Considering the analysis of these procurement challenges in both the emerging markets of
China and Nigeria, there are few solutions as well that have been effective for dealing with
the challenges and ensure stable business functioning all throughout. There is need to recruit
future professionals by creating scopes and opportunities for new candidates to form a greater
talent pool consisting of people with varied skulls, knowledge and expertise. Based on the
statement of Esfahbodi et al. (2016), the procurement professionals must represent their
profession and also their skills and put greater emphasis on the various things that should be
considered while doing a job in the workplace. Not only the compensation packages and
benefits offered are the important factors, but also to ensure fostering a healthy and
innovative culture is effective for the process of procurement. The utilisation of internal
networks has also been important for the purpose of attracting the new talents and make sure
to form a diverse talent pool, which could yield better outcomes and also meet the
requirements for the concerned job role along with the fulfilment of criteria too (Knodt and
Piefer 2016).

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It has also been found that there are additional expenditures related to the travel and while
engaging different types of stakeholders during the process of procurement, which are also
needed to be managed properly for delivering a better cost efficient function. There has also
been anticipation of decline in travel expenses in large amounts in the future and thus to
reduce such expenses, the small and medium sized businesses could foster effective
communication with the help of emails and video conferencing and even developed apps for
improving the level of integration with various other tools. Due to this, the entire process
would be automated and fully functional, which should reduce the expenses largely and
ensure achieve the lowest possible cost incurred while managing the procurement process
largely. According to Meehan and Bryde (2015), the sourcing of a contingent workforce
consisting of employees could be a major challenge associated with the procurement process
management and this often has affected the cross border hiring of talent. There must be
implementation of flexible functions integrated with the diversity management program for
meeting the needs of better visibility and also fulfil the procurement needs to facilitate
executive sponsorship largely. This would though require making certain adjustments to
ensure complying with the various laws, rules and regulations in the different place where the
businesses want to source as well. As stated by Theodorakopoulos and Budhwar (2015),
delivering the automated data analytics could also resolve the challenge for procurement
through better visualisation of data and information, furthermore, gain greater data insights
and ensure proper processing and analysis of data and information, This would ort only
reduce the manual intervention, but could even reduce the entire time required to manage the
data and information through paperwork (Awodele et al. 2019). This has the ability to
facilitate the process of decision making, furthermore, strengthen the engagement of
stakeholders and ensure better communication process management too.

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Considering the various challenges experienced within the emerging markets of China
and Nigeria, the engagement of stakeholders has been considered as effective prior to the
management of contract as well as post contractual agreements. Thus, to resolve the
procurement issues and challenges, there has been constant need of developing relationships
through facilitation of communication process. The different types of stakeholders must
understand the procurement and make the organisation understand about the necessity to
educate the employees and facilitate the learning and knowledge acqusitions perspectives too.
As stated by Hu et al. (2004), there must be focus on delivery of training programs to
enhance the level of knowledge and expertise of the category managers and at the same time,
promote soft negotiation skills required to improve the process of listening, learning and
during the application of emotional intelligence. Moreover, the focus on sustainable
procurement strategies are also required to ensure reduction of costs associated with the
various functions and processes managed by the organisations while sourcing products and
services from China and Nigeria and also to improve the management of supply chains
effectively too.
3. Research methodology
3.1 Research philosophy
There are different types of philosophies of research including the positivism, post
positivism and interpretivism research philosophies. The selection of the right research
philosophy is recommended for ensuring management of data and information in an effective
way and also identify the facts and evidences required to gain knowledge and enhance the
scope of observation furthermore. The positivism research philosophy applies for identifying
the hidden truths and ensure that the knowledge and information are obtained based on the
factual points that have been observed while conducting the research. The positivism research
philosophy opposes the facts of positivism research philosophy whereas the interpretivism