Effect of Supplier Diversification on Procurement Performance of the Energy Sector State Corporations in Kenya

Edward Murigi Gitau () and Dr. Jackson Ndolo ()

International Journal of Supply Chain and Logistics, 2025, vol. 9, issue 7, 38 - 52

Abstract: Purpose: This study examined supplier diversification's effect on procurement performance in state-owned energy corporations in Kenya. Methodology: Using the cross-sectional research design, data were gathered at one point in time of the study from the selected 198 respondents who were drawn through the stratified random sampling from supply chain, operations, and finance departments of five corporations: KenGen, KPLC, REREC, KPC, and NOCK. Primary data were collected using a structured questionnaire that sought prospects on supplier diversification and procurement results. The analysis of data was performed in SPSS version 26 using descriptive statistics, multiple linear regression and ANOVA to test relations and model fit. Findings: Results found a significant positive linear relationship between supplier diversification and procurement performance with correlation coefficient (R) = 0.980, R 2 = 0.961, indicating that supplier diversification explains 96.1% of the variations in procurement performance. There was a statistically significant regression model, F=2190.699, p<0.001, and the supplier diversification coefficient had a significant, positive effect (β=0.904, p<0.001). Unique Contribution to Theory, Policy and Practice: Based on these findings, the study suggests that supply chain managers should actively diversify supplier networks geographically and in terms of industries to decrease reliance on single sources and increase the efficiency of procurements. Furthermore, the regulatory bodies should formulate policies to enhance suppliers' procurement diversity and performance in the energy sector.

Keywords: Supplier Diversification; Procurement Performance; Energy Sector State Corporation (search for similar items in EconPapers)
Date: 2025
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