Effectiveness of risk management practices on the procurement performance of humanitarian Non-Governmental Organizations in Nairobi, Kenya

Abstract

Humanitarian entities strive to aid victims of armed conflict, famines, and natural disasters through relief operations and development aid programs. Effective procurement is the foundation of running humanitarian missions successfully, which involves the ability to swiftly identify needs and effectively engage in fundraising, procurement, transportation, distribution, and delivery of essential products and services. Unfortunately, these entities face numerous issues which cause delays in emergency response, resource wastages, financial losses, operational inefficiencies, reputational damage, ethical concerns, and loss of donor confidence. Robust risk management measures are thought to be the solution to procurement-related these challenges. However, knowledge of the effectiveness of these measures remains unclear due to limited empirical coverage. This research aimed address this gap by determining the effectiveness of risk management practices in the procurement performance of humanitarian NGOs in Nairobi. Therefore, the study aimed to provide empirical evidence on the effectiveness of risk management in addressing procurement constraints in the humanitarian missions. The study focused on risk assessment, regular auditing, supplier management, and contract management practices as the independent variables, procurement performance as the dependent variable, and NGO size as the moderating variable. The study was underpinned by contingency and RBV, anchoring and supporting theoretical frameworks. A pragmatic research philosophy was followed and a descriptive cross-sectional research design adopted. 89 humanitarian NGOs in Nairobi were targeted, where 178 heads of risk and procurement were surveyed using questionnaires and interviews. Findings were analyzed using quantitative statistical techniques (descriptive and inferential statistics) and thematic analysis. Results of the study demonstrate low adoption rates for all the risk management practices by humanitarian organizations, with supplier management least adopted. All the four practices exhibited significant effectiveness in enhancing procurement performance in these NGOs with the most effective being supplier management and contract management. Also, organizational size has a significant moderating effect on the effectiveness of these practices. Therefore, with the demonstrated effectiveness and varying adoption rates, this study recommends a deliberate and focused adoption of the four risk management practices, with special emphasis on supplier management and contract management practices to optimize procurement performance.