Strategic Sourcing Practices in Multinational Corporations in Kenya

Abstract

The objectives of this study were to identify the strategic sourcing practices of manufacturing multinational corporations and to determine the factors influencing strategic sourcing practices of manufacturing multinational corporations in Kenya. The study adopted a survey research design. The population was 94 MNCs that were members of Kenya Manufacturers Association by June 2013. A sample of 45 firms was selected using random stratified sampling from which 30 firms took part in the study. The collected data was analysed using descriptive analysis and factor analysis. The study found that the most outstanding strategic sourcing practice were strategic purchasing, internal integration, and information sharing. The most significant strategic sourcing determinant was supplier management system, continuous improvement, visionary leadership, and core competence. The results of factor analysis showed that five factors influence strategic sourcing practices in MNCs. These were grouped as Factor 1 (leadership, integration, and variety), Factor 2 (competitive analysis, competitor imitation, learning organisation, and sourcing knowledge and skills), Factor 3 (supplier evaluation and selection, customer perception, people management, and supplier development), Factor 4 (specialisation design, systems improvement, and life cycle cost focus), and Factor 5 (process improvement and supplier collaboration). The study recommends that multinationals that seek to strategically source materials need to take cognizance of the factors that influence such endeavours specifically continuous improvement, visionary leadership, and core competence. The study also recommends that other firms in Kenya can borrow the strategic sourcing practices among multinationals in Kenya by focusing on key areas such as purchasing, internal integration, an information sharing.