African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4164

Full Length Research Paper

Professional qualification and its impact on procurement performance: The case of Mzinga Holding Company Limited, Morogoro, Tanzania

Pascalia Mahonda
  • Pascalia Mahonda
  • Department of Business Studies, Faculty of Commerce, Jordan University College (JUCo), P. O. Box 1878 Morogoro, Tanzania.
  • Google Scholar
Lazaro Athanas Mwonge
  • Lazaro Athanas Mwonge
  • Department of Economics, Mathematics and Statistics, Jordan University College (JUCo), P. O. Box 1878 Morogoro, Tanzania.
  • Google Scholar
Alexis Naho
  • Alexis Naho
  • Department of Economics, Mathematics and Statistics, Jordan University College (JUCo), P. O. Box 1878 Morogoro, Tanzania.
  • Google Scholar


  •  Received: 28 July 2021
  •  Accepted: 21 September 2021
  •  Published: 30 November 2022

 ABSTRACT

Professionalism in public procurement allows for the functionality, transparency and significant savings in public expenditure. Professionalism depends on the staffing, knowledge, skills and capabilities of human resources and system controls that influence human behaviour. This study used descriptive research design. Data were collected from 48 respondents that were purposively selected from different departments of Mzinga Holding Company Limited (MHCL), Morogoro, Tanzania. Both primary and secondary data were collected using interviews and structured questionnaires. Data were analyzed using descriptive statistics. The study found that strategic procurement professionalism significantly affects procurement performance at MHCL, which has made its procurement function to be more professional by organizing trainings and seminars for its employees, determining competence of procurement staff and adhering to professional codes of conduct and PPA of professionals. The study results showed that MHCL buys the right amount of quality materials from the right source at a minimum cost when they are needed. Therefore, it is recommended that the management of MHCL should allow the Tender’s Board and User Department to attend training, workshops and seminars in order to be familiar with the decisions they make.

 

Key words: Professional qualification, procurement performance, training, professionalism.


 INTRODUCTION

Public procurement is the purchase of commodities and contracting of construction works and services. Such acquisitions are affected by the resources of state budgets, local authority budgets, state foundation funds, domestic loans or foreign loans guaranteed by the state, foreign aid as well as revenue received from the economic activities of the state. Public procurement thus means a procuring entity procuring goods and services, using public funds (Matunga et al., 2013). Procurement function in public entities in Tanzania has been carried out and well documented; but it is poor and inefficient in most public entities (Marendi, 2015; Kechibi, 2012). Gesuka and Namusonge (2013) found that lack of professional knowledge on procurement rules, regulations and ethics among procurement entities were the factors affecting compliance of public procurement.

 

Lysons and Farrington (2010) highlighted that the development of professionalism in procurement is promoted by the establishment of professional institutions, development of undergraduate and postgraduate courses with purchasing content, published code of ethics, publication of text books and specialist journal related to purchasing and researches into procurement and supplies management and related fields. In Tanzania’s public sector, such efforts have been taken into account to ensure the development of the procurement profession. However, the level of professionalism in procurement proceeding is questionable, despite the formation of several professional boards such as the National Board of Material Management (NBMM) in 1979, Procurement and Supplies Professionals and Technicians Board (PSPTB, 2010) in 2007, where procurement practitioners are now registered as professionals in various categories, Public Procurement Act 2001 which was amended in 2004, 2011, and the current Public Procurement Act 2013 which is currently operational. Despite the increasing number of various training institutions that have been adopted to teach procurement related courses in recent years, corruption, bribery and non-compliance with the procurement act are still the challenges facing public procurement proceedings. On numerous occasions, government officials reportedly influence tender decisions to favor their personal interest instead of that of the public.

 

Thinkers in almost all disciplines have recently focused on the term, professionalism. It has always been argued that professionalism is assumed to be desirable and valuable in its own right (Steiner, 2001). Professionalism in public procurement allows for the functionality, transparency and significant saving in public expenditure. Professionalism depends on the staffing, knowledge, skills and capabilities of human resources and system controls that influence human behaviour (OECD, 2007). According to Lysons and Farrington (2010), procurement as a profession, is a skill and competence based on theoretical knowledge, prolonged training and education, tests and examinations and adherence to professional code of ethics.

 

Moreover, spending a substantial amount of public financial resources, a number of reforms, inefficient and ineffective public procurement have been issues of great concern. In many countries in the world, public procurement is faced by a number of problems including lack of standardization and proper documentation, lack of professional skills in procurement and malpractices (Ndolo and Njagi, 2014). There is a little focus on quantifying performance; the actual returns to having applied process aimed at achieving quality procurement (Mady et al., 2014; Ogachi, 2014). Therefore, our study aimed at assessing the influence of procurement professionalism in procurement performance at Mzinga Holding Company Limited, Morogoro.


 THEORETICAL AND ANALYTICAL FRAMEWORK

Resource based view theory proponents argue that valuable, rare, inimitable, and non-substitutable resources can be a source of superior performance and may help firms achieve sustained competitive advantage. The resource-based view theory of a firm is thus a suitable approach to understanding competitive dynamics; a firm’s resources which are intangible and tangible assets are linked to it in a semi-permanent way, including the technological, human and physical assets. Having resources only is not sufficient. Thus resource-based view theory adds a group of capability which results from complicated pattern of interaction and coordination between resources (Karia and Wong, 2013). The manner in which firms need, develop, maintain, bundle and apply them leads to competitive advantage and superior performance over time. A firm is able to create long-lasting competitive capabilities and thus generates a competitive advantage by exploiting its non-imitable resources (Chen and Paulraj, 2011).

 

The resource-based theory is therefore relevant and useful in our study due to the fact that, procurement activities are conducted by persons and they can use difference assets in performing their task (Bohnenkamp, 2013). The procurement persons must have procurement profession which is valuable, rare, imitable and non- substitutable resources, for their firms to achieve sustained competitive advantages. As this theory argues that having resource only is not sufficient; thus, it adds a group of capability. From this theory, in order for the procurement professional to perform effectively, there is a need for him or her to receive training on procurement ethics, the use of ICT infrastructure, adoption of technological changes, awareness of procurement reform and to be capable in it.


 RESEARCH METHODS AND METHODOLOGY

Description of the study area

 

The study was conducted in Morogoro municipality. It is the regional capital of Morogoro region, Tanzania. The coordinates of Morogoro Municipality are 06?49’20S 037?39’55E. The Municipality is bordered to the east and south by the Morogoro Rural District and to the north and west by Mvomero District. It has a population of 315,866 people, of which males are 151,700 and females are 164,166 (Tanzania, 2012). Therefore, the study was conducted to assess the impact of professional qualification on procurement performance in public entities in Tanzania, specifically at Mzinga Holding Company Limited Morogoro.

 

Sample size and sampling technique

 

Both purposive and simple random sampling techniques were used to select 48 Mzinga Holding Company Limited employees. The sample size was derived from the Slovin’s formula (1960) which allowed researchers to sample the population of 48 out of 93 employees with a desired degree of accuracy; that is, the degree of accuracy is 90%. A 90% confidence level implies that the researcher(s) expected 90% of the interval estimates to include the population parameter.

 

 

Where;

n = Number of samples or sample size

N = Population size (N=93)

e= Error margin/ margin of error (10%=0.10)

n=93/(1+93?(0.1)?^2 )

n=93/(1+0.93)

n=93/1.93

n= 48.1865 respondents

 

Data Type and Collection

 

Primary data were collected using structured questionnaires and interview with key informants i.e., managers and heads of Departments (HoDs). Also, secondary data were collected through documentary reviews i.e., from the company’s report, internet and journals.

 

Data analysis

 

Descriptive was used for data analysis. Statistical Package for Social Sciences (SPSS Version 20) was utilized as the main descriptive statistical tool to analyze the data and determine the extent of relationships between the independent and dependent variables. Analyzed Data are presented using frequency tables and figures.


 RESULTS AND DISCUSSION

 

Demographic information of the respondents

 

Gender of the respondents

 

The researchers sought to establish the gender distributions to know the involvement of both male and female in procurement activities. Since gender is a cross- cutting issue, the researchers considered it to be an important variable in order to obtain the information from both males and females regarding the influence of procurement professionalism on procurement performance. The study results are summarized in Table1.

 

The study findings from Table 1 shows that majority, about 28 of the respondents (58.3%) were females while 20 of the respondents (41.7%) were males. This study result implies that females participate more in procurement activities than their male counter parts. Their involvement in procurement activities has been influenced by increasing trend of women’s empowerment in public organizations. Nowadays, the government has made deliberate effort of increasing the number of females in various positions in government sector. Therefore, the inclusion of both male and female in this study was to obtain the relevant information on procurement professionalism gender wise; that is, to obtain the opinion of both males and females without bias. The same information is presented in Figure 1.

 

 

 

Age of respondents

 

The study sought to establish the distribution of the respondents’ age as it is a crucial factor in research. Matured people normally present diverse opinions than young ones due to the experience they accumulate during their carrier. The study results are shown in Table 2. The findings in Table 2 show that, 10.4% of the respondent were between 20-29 years, 52.1% were aged between 30-39 years, 20.8% were between 40-49 years and 16.7% were aged 50 and above. This study implied that, the majority of the respondents were 30 years and above. Apart from maturity, this age group in professionalism is assumed to have accumulated experience in procurement field and can ensure that procurement performance is achieved in their organization. This information is presented in Figure 2.

 

 

Education level of respondents

 

The researchers sought to know the education levels of the respondents from the study area. The education level of the respondents is considered to be an important variable because academic education is very important to all personnel involved in procurement activities. For the same reasons, this study intends to establish various

levels of education among the staff of Mzinga Holding Company Limited and their key suppliers. The study results are shown in Table 3. The findings in Table 3 show that 12.5% of the respondents had certificate level, 20 respondents (41.7%) were diploma holders, while 15 respondents (31.3%) were bachelor’s degree holders, 14.6% were Master’s degree holders. From the finding above, most of the employees are diploma holders. This is due to the policies of the organization on the task of performing the duties. This is presented in Figure 3. The study results revealed that, all employees at MHCL have college and university background. This indicates that they are well educated enough to understand the questions regarding professional qualifications and its impact on procurement performance and thus have given credible results.

 

 

Professional qualifications

 

The study sought to know the professional qualification distribution among MHCL employees. Establishment and composition of the procurement management unit require that the procurement department be staffed to an appropriate level consisting of procurement and other technical specialists together with necessary supporting staff [sec.37 (1) and (2), PPA 2011]. The study aims to know if employees of Mzinga Holding Company Limited have the level of professional qualification required. The respondents were required to indicate whether they have qualifications or not. Table 4 presents the summary of the study results. About 46 out of 48 MHCL employees (95.8%) have different professional qualifications; that is, engineering, procurement and supplies, chemicals. It is only 2 respondents (4.2%) that had no professional qualifications. This is presented in Figure 4. The PMU in MHCL was staffed with qualified professionals as per [sec.37(1) and (2), PPA, 2011]’s command. The composition of the procurement management unit requires that the procurement department be staffed to an appropriate level consisting of procurement and other technical specialists together with necessary supporting and administrative staff.

 

 

Procurement professional experiences

 

The study sought to know the professional experience of the respondents in the field of procurement and supply management on the procurement performance. The experience in this case was measured in terms of the number of years MHCL employees worked in the field of procurement and supply management. Table 5 presents the study results. It was found that at MHCL, about 35 out of 48 (72.9%) of the employees had a professional experience of 11 years and above followed by 12 employees (25%) who had 5-10 years of professional experience; only one respondent (2.1%) had less than 5 years of experience. This is presented in Figure 5. Based on the study results in Figure 5, about 35 MHCL employees (72.9%) have professional experience of 11 years and above, implying that at MHCL there is satisfactory level of experience on procurement professionals. Furthermore, this study revealed that PMU in MHCL is headed by a person with Master’s degree, professional qualification, experience in procurement function and is registered by procurement professional body as stipulated in PPA 2011[sec 37(3)].

 

 

Impact of professional qualifications on procurement performance

 

In assessing the influence of professionalism on procurement performance in public entities in Tanzania, specifically the study identified the impact of academic and professional qualification on procurement performance. It helps in attaining the right quantity and quality materials from the right suppliers at cheap cost and at the right time required for the production. Ringera et al. (2015) define procurement academic and professional qualification as continuous education and training of procurement professionals within the framework established by the Act. It should be encouraged in order to professionalize public procurement. The study sought to know to what extent academic and professional qualification affects procurement performance at MHCL. The respondents were required to answer by indicating the degree of improvements they know and/or perceive as follows: Strongly Agree (SA), Agree (A), Neutral (N), Disagree (D) and Strongly Disagree (SD). The study results are presented in Table 6.

 

 

Seminars and professional training

 

The study sought to understand the level of value added to employees by creating opportunity to understand procurement knowledge via attending trainings, workshop and seminars. Ivambi (2016) elaborates that training is the process of acquiring specific skills to perform a job better and helps people to become qualified and proficient in doing some jobs. Usually, organizations facilitate employees’ learning through training so that their modified behaviour contributes to the attainment of the organization’s goals and objectives. As shown in Table 6, 35.4% of the respondents strongly agreed that MHCL provides opportunity for its employees to participate in procurement professional training, seminars and workshop and 45.8% of the respondents agreed that MHCL provides opportunity for its employees to participate in procurement professional training, seminars and workshop; 18.8% of the respondents were neutral. This implies that MHCL has employed much effort in Career Professionals Development (CPD) and hence advanced the understanding of procurement performance. This is presented in pie chart as shown in Figure 6. The study results concur with the findings of Ivambi (2016) who states that through training, employees acquire new skills to implement all their duties effectively. Procurement trainings such as sensitization workshops and forums for public procurements are necessary for employees to respond well to procurements decisions when discharging their day to day activities. Without proper training, procurement staffs will be out-dated in facing new challenges and practices such as technological changes and new legislative in the industry. In the past thirty years we have witnessed various changes and reforms in the industry. Proper trained staffs, apart from having enhanced efficiency in procurements related duties, can work under minimum supervision because they have appropriate skills needed to perform the duties and functions related to procurement obligations.

 

 

Competence of procurement staff

 

The study sought to know the competence of staff involved in procurement activities at MHCL; that is staff applying the knowledge and skills, and behaviour required to get things done effectively. Odero and Ayub (2017) acknowledged that competence means a person having sufficient knowledge and skills that enables him/her to act in diverse situations. In public procurement, professionalism relates to the educational levels, workforce qualifications and professional approach regarding how business activities are conducted. Also, Odero and Ayub posited that many procuring organizations lack competent staff which is critical to the management of good procurement process. To improve and contribute to the productivity of organizations, there is need for extensive external training of the human resource. Therefore, the establishment of procurement regulations, rule and procedures can help staff competence in procurement functions. The study found that about 27 of the respondents (56.3%) and 12 of them (25%) agreed that procurement officials from MHCL involved in procurement activities are competent enough to perform their respective duties; while 6 respondents (12.5%) were neutral and 3 (6.3%) disagreed with the statement. This is presented in Figure 7. Therefore, as more than 81% of the respondents agreed that the MHCL staffs involved in procurement activities are competent enough to perform their respective duties, it means that they are familiar with the regulations, rules and procedures guiding the procurement process and decisions.

 

 

Registration with professional bodies

 

Registration with the appropriate professional bodies is an important issue to consider in any professional cadre. The bodies provide ethical guidelines governing a particular professional. Therefore, the study sought to know whether MHCL considers this or not as stipulated in PSPTB Act, 2007, [sec 46(1)-(2)]. The study findings in Table 6 show that 27.1% of the respondents strongly agreed that employees and suppliers are asked to register at particular professional bodies; 58.3% agreed too; while 12.5% were neutral and 2.1% disagreed with the statement. This is presented in in Figure 8. Therefore, as more than 85% of the respondent agreed, the study result implies that MHCL considers professional registration as per PSPTB Act 2007, sec 46 (1), which commands that no person shall employ or continue to employ in procurement or supplies activities a person who is not registered as a procurement and supplies professional and technician. In MHCL most of the officials employed to conduct procurement and supplies function are registered in different categories with their respective bodies (PSPTB).

 

 

Independence of function and power

 

To ensure independence of function and power in procurement activities, PPA, 2011 sec 41 commands that the accounting officer, the tender board, the procurement management unit, the user department and the evaluation committee shall act independently in relation to their respective functions and power. This provision of law gives the parties the freedom and power to make their buying decisions without any external pressure. The study sought to know whether such independence exists in MHCL. The respondents were asked to indicate the extent to which they agree or disagree with the statement relating to independence of the officials involved in the procurement activities in MHCL. The findings in Table 6 show that, 10.4% of the respondents strongly agreed that there is independence of the officials’ involvement in the procurement activities in MHCL. 41.7% agreed, 39.6% were neutral and 8.3% disagreed with the statement. The same information is presented in Figure 9. Therefore, the study reveals that more than 51.7% of the respondents said the officials involved in the procurement activities in MHCL perform their duties independently. This result is in line with PPA 2011, Sec 41 that every party (AO, TB, PMU, EC and User department) has to work independently when performing his/her duties.

 

 

 

Safekeeping of records and documents

 

The PPA (2011) Sec 61 (1) requires all procuring entities to maintain a record of their procurement proceedings, including decisions taken and the reasons for it. Such record should be kept for a period of not less than five years from the date the contract is completed and be made available to the minister and the controller and auditor general when required. The study sought to know whether or not there safekeeping of records and documents relating to procurement process and decisions in MHCL. The study results in Table 6 show that 12.5% of the respondents strongly agreed with safekeeping of records and documents and 50% agreed. 33.3% of the respondents were neutral and 4.2% of the respondents disagreed with the statement. The same information is presented in Figure 10. Therefore, from the findings, more than 62.5% of the respondents agreed that procurement records and document are safely kept in procurement department as required by PPA and its PPR. However, the study result is contrary to the report of the Controller and Auditor General (CAG) of local government authorities on financial statement ended 30th June, 2017; there was no safekeeping of documents and records due to some procurement documents were missing.

 

 

Area for future research

 

This study focused only on the procurement professionalism. This certainly limited the scope of the study from investigating other factors that influence performance of the procurement departments in public entities. It is therefore suggested that further studies be conducted in the public sector so as to establish other factors that influence the performance of the procurement function in public entities.


 CONCLUSION AND RECOMMENDATIONS

The study revealed that effective procurement system requires that the procuring entity is staffed with procurement professionals that are trained and recognized by the respective procurement professional bodies. Moreover, the study result revealed that MHCL staffs have been registered with the body (PSPTB) as qualified and competent staff for conducting procurement function. However, the study the revealed that MHCL has provided opportunity for its employees to participate in procurement professional seminars, workshop and trainings; also most of MHCL procurement staff are experienced in the field of procurement and supplies. Therefore, it is recommended that the management of MHCL has to allow the Tender Board and User Department to attend training and seminars.


 CONFLICT OF INTERESTS

The authors have not declared any conflict of interest.



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