EFFECTS OF SUPPLIER DEVELOPMENT ON ORGANIZATIONAL PERFORMANCE AT KENYA POWER AND LIGHTING COMPANY LIMITED

Kenya Power’s recent corporate performance has been strongly influenced by challenges arising from deficiencies in the performance and capabilities of its bulk power suppliers. The general objective of the study was to determine the effects of supplier development on organizational performance at Kenya Power. The study adopted a descriptive research design. The study’s target population had 474 members. The researcher employed the cluster sampling procedure and a sample size of 142 respondents. The researcher used a structured questionnaire administered in three mailings. The researcher processed and analyzed the field data collected using descriptive analysis and inferential analysis using IBM SPSS Statistics Version 22. To ensure data validity, the questionnaire’s scales’ content validity was assessed using two experts’ panels. Also, a pilot study was conducted and Cronbach’s Coefficient Alpha computed to establish the reliability of the study’s structured questionnaire. The descriptive statistics used were mean and standard deviation. Inferential analysis began with correlation analysis. Multiple regression analysis was used to model the relationship between organizational performance and the 3 independent variables. The extent of the regression model’s goodness of fit was evaluated through the computation of the coefficient of determination ( ). The significance of the regression model, at a 95% confidence level, was established using analysis of variance (ANOVA). The study’s data analysis results were presented in the form of tables and the results thereafter interpreted and explained. The findings of the pilot study showed that all the four scales of the study’s research instrument had an acceptable internal consistency level and were therefore reliable; the coefficients of Cronbach’s alpha of the constructs were all higher than 0.7 (range from 0.723 to 0.809). The descriptive statistics revealed that the study’s respondents agreed that supplier evaluation, supplier incentives and supplier partnership positively affect organizational performance at Kenya Power. Correlation analysis indicated strong positive correlation between each of the study’s independent variables and organizational performance with the respective r values all being high (range +0.281 to +0.366). The computed value was 0.147 indicating that 14.7% variation in organizational performance at Kenya Power could be explained by the combined variations in the study’s 3 independent variables. The study’s regression model showed that all the three independent variables had a positive relationship with the dependent variable. ANOVA, at a 95 % confidence level, yielded a computed p-value of 0.007 (which was less than the alpha (α) value of 0.05) and a high computed F-Test ratio value of 0.875. The regression model was thus determined to be statistically significant in predicting how supplier development affects organizational performance at Kenya Power. The study recommends that: Kenya Power intensifies and broadens the supplier evaluation and supplier incentivization aspects of its supplier development practices; and that the GoK, through ERC and MoEP, pursue policies that promote competitiveness amongst Kenya Power’s IPP supply base.