Dorcus Final Work

SUPPLIER RELATIONSHIP MANAGEMENT AND VALUE FOR MONEY IN
PROCUREMENT IN COMMERCIAL BANKS OF UGANDA: A CASE OF

STANBIC BANK UGANDA LIMITED
BY
BAYIGA DORCUS
18/MPP/KLA/WKD/0001
A RESEARCH DISSERTATION SUBMITTED TO THE SCHOOL OF MANAGEMENT

SCIENCE IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD
OF A MASTER’S DEGREE IN PUBLIC PROCUREMENT MANAGEMENT
UGANDA MANAGEMENT INSTITUTE
JULYOCTOBER, 2023
DECLARATION
I, Bayiga Dorcus, declare that this dissertation entitled “Supplier Relationship
Management and Value for Money in procurement in commercial banks of Uganda: a
case of Stanbic Bank Uganda Limited” is my own original work and it has not been
presented and will not be presented to any other institution for any academic award.
Where other people’s work has been used, this has been duly acknowledged.
SIGN……………………………………..DATE ……………………………………………..
BAYIGA DORCUS
18/MPP/KLA/WKD/0001
i
APPROVAL
This is to certify that this dissertation by Bayiga Dorcus entitled, “Supplier Relationship
Management and Value for Money in procurement in commercial banks of Uganda: a
case of Stanbic Bank Uganda Limited” has been submitted for examination with our
approval as Institute supervisors.
Sign ……………………………………. Date………………………………..
DR. BRUCE KISITU

SUPERVISOR
Uganda Management Institute
Sign ……………………………………. Date………………………………..
DR. JULIET ATWEBEMBEIRE

SUPERVISOR
Uganda Management Institute
ii
DEDICATION
This dissertation is dedicated to my family members most especially my dear husband,
my children and my parents for their financial support and moral encouragement.
ACKNOWLEDGEMENT
iii
I am deeply indebted to my research supervisors Dr. Bruce Kisitu and Dr. Juliet
Atwebembeire for their patience with my inadequacies as they guided me through the
research process. Without your parental and professional input, this research would
have been difficult to elevate to its current level.
I acknowledge with gratitude the contributions and co-operation made by the

respondents from Stanbic Bank Uganda Limited for their willingness to provide the
necessary information during the research process. Without their cooperation, this
study would have been impossible to accomplish.
I also thank my colleagues at Uganda Management Institute, persons who dealt with
secretarial work and those who read through the questionnaires and perfected the draft
report.
I deeply treasure the contributions of all the above persons and ask God Almighty to
richly bless them.
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TABLE OF CONTENTS
DECLARATION............................................................................................................................i
APPROVAL...................................................................................................................................ii
DEDICATION..............................................................................................................................iii
ACKNOWLEDGEMENT...........................................................................................................iv
TABLE OF CONTENTS..............................................................................................................v
LIST OF TABLES........................................................................................................................ix
LIST OF FIGURES.......................................................................................................................x
ABSTRACT.................................................................................................................................xii
CHAPTER ONE............................................................................................................................1
INTRODUCTION.........................................................................................................................1
1.0 Introduction................................................................................................................................1
1.1 Background to the Study...........................................................................................................2
1.1.1 Historical Background............................................................................................................2
1.1.2 Theoretical Background..........................................................................................................4
1.1.3 Conceptual Background..........................................................................................................5
1.1.4 Contextual Background..........................................................................................................6
1.2 Problem statement.....................................................................................................................7
1.3 Purpose of the study...................................................................................................................8
1.4 Specific Objectives....................................................................................................................8
1.5 Research Questions....................................................................................................................8
1.5 Hypothesis of the Study.............................................................................................................8
1.7 Significance of the Study...........................................................................................................9
v
1.8 Justification of the study..........................................................................................................10
1.9 Scope of the study....................................................................................................................10
1.10.1 Subject scope......................................................................................................................10
1.10.2 Geographical scope.............................................................................................................10
1.10.2 Time scope..........................................................................................................................10
1.11 Operating definitions.............................................................................................................10
CHAPTER TWO.........................................................................................................................12
LITERATURE REVIEW...........................................................................................................12
2.1 Introduction..............................................................................................................................12
2.2 Theoretical review...................................................................................................................12
2.3 Related literature review..........................................................................................................13
2.3.1 Supplier performance management and Value for money...................................................13
2.3.2. Supplier development and Value for Money.......................................................................17
2.4 Value for Money......................................................................................................................21
2.5 Summary of literature review..................................................................................................22
CHAPTER THREE.....................................................................................................................24
METHODOLOGY......................................................................................................................24
3.1 Introduction..............................................................................................................................24
3.2 Research design.......................................................................................................................24
3.3 Study Population......................................................................................................................24
3.4 Sample Size.............................................................................................................................24
3.5 Sampling Techniques and procedures.....................................................................................25
3.5.1 Simple Random Sampling....................................................................................................25
3.6 Data Collection Methods.........................................................................................................25
3.6.1. Questionnaire Survey...........................................................................................................26
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3.6.2 Interview Method..................................................................................................................26
3.7.2 Interview guide.....................................................................................................................27
3.8 Quality control of data.............................................................................................................27
3.8.1 Validity of instruments.........................................................................................................27
3.8.2 Reliability of instruments.....................................................................................................29
3.9 Data collection procedure........................................................................................................30
3.10. Data Analysis Technique......................................................................................................30
3.10.1 Quantitative data analysis..................................................................................................30
3.10.2 Qualitative data analysis.....................................................................................................31
3.11 Measurement of variables......................................................................................................31
3.12 Ethical Considerations...........................................................................................................31
CHAPTER FOUR.......................................................................................................................33
PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS.........................33
4.1 Introduction..............................................................................................................................33
4.2 Response Rate..........................................................................................................................33
4.3.1 Sex of the respondents..........................................................................................................33
4.3.2 Age of the respondents.........................................................................................................34
4.3.3 Education level of respondents.............................................................................................35
4.3.4 Years of service in the organization.....................................................................................35
4.4 Empirical findings...................................................................................................................36
4.4.1 Value for Money at Stanbic Bank Uganda Limited.............................................................36
4.4.2 Supplier Performance Management and Value for Money..................................................39
4.4.3 Supplier Development and Value for Money.......................................................................43
CHAPTER FIVE.........................................................................................................................48
SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS...................48
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5.1 Introduction..............................................................................................................................48
5.2. Summary of major findings....................................................................................................48
5.2.1: Supplier Performance Management and Value for Money.................................................48
5.3. Discussion of findings............................................................................................................49
5.4 Conclusions..............................................................................................................................51
5.5 Recommendations....................................................................................................................52
REFERENCES............................................................................................................................54
APPENDICES..............................................................................................................................60
APPENDIX I: QUESTIONNAIRE FOR THE FINANCE AND ADMINISTRATION
AND OPERATIONS’ DEPARTMENT....................................................................................60
SECTION B: QUESTIONS ON THE STUDY VARIABLES.................................................61
APPENDIX TWO: INTERVIEW GUIDE FOR THE MANAGERS....................................64
APPENDIX III: SAMPLING GUIDE.......................................................................................65
DECLARATION............................................................................................................................i
APPROVAL...................................................................................................................................ii
DEDICATION..............................................................................................................................iii
ACKNOWLEDGEMENT...........................................................................................................iv
TABLE OF CONTENTS..............................................................................................................v
LIST OF TABLES........................................................................................................................ix
viii
LIST OF FIGURES.......................................................................................................................x
ABSTRACT.................................................................................................................................xii
CHAPTER ONE............................................................................................................................1
INTRODUCTION.........................................................................................................................1
1.0 Introduction..............................................................................................................................1
1.1 Background to the Study.........................................................................................................1
1.1.1 Historical Background.........................................................................................................1
1.1.2 Theoretical Background.......................................................................................................2
1.1.3 Conceptual Background.......................................................................................................4
1.1.4 Contextual Background.......................................................................................................5
1.2 Problem statement...................................................................................................................6
1.3 Purpose of the study................................................................................................................7
1.4 Specific Objectives...................................................................................................................7
1.5 Research Questions..................................................................................................................7
1.5 Hypothesis of the Study...........................................................................................................8
1.7 Significance of the Study.........................................................................................................9
1.8 Justification of the study.......................................................................................................10
1.9 Scope of the study..................................................................................................................10
1.10.1 Subject scope.....................................................................................................................10
1.10.2 Geographical scope...........................................................................................................10
1.10.2 Time scope.........................................................................................................................11
1.11 Operating definitions...........................................................................................................11
CHAPTER TWO.........................................................................................................................12
LITERATURE REVIEW...........................................................................................................12
2.1 Introduction............................................................................................................................12
2.2 Theoretical review.................................................................................................................12
2.3 Related literature review.......................................................................................................15
2.3.1 Supplier performance management and Value for money.............................................15
2.3.2. Supplier development and Value for Money...................................................................18
2.4 Value for Money....................................................................................................................21
2.5 Summary of literature review...............................................................................................23
CHAPTER THREE.....................................................................................................................24
METHODOLOGY......................................................................................................................24
3.1 Introduction............................................................................................................................24
ix
3.2 Research design......................................................................................................................24
3.3 Study Population....................................................................................................................24
3.4 Sample Size.............................................................................................................................25
3.5 Sampling Techniques and procedures.................................................................................25
3.5.1 Simple Random Sampling..................................................................................................25
3.6 Data Collection Methods.......................................................................................................26
3.6.1. Questionnaire Survey........................................................................................................26
3.6.2 Interviews............................................................................................................................27
3.7.2 Interview guide....................................................................................................................28
3.8 Quality control of data..........................................................................................................28
3.8.1 Validity of instruments.......................................................................................................29
3.8.2 Reliability of instruments...................................................................................................30
3.9 Data collection procedure.....................................................................................................31
3.10. Data Analysis Technique....................................................................................................32
3.10.1 Quantitative data analysis................................................................................................32
3.10.2 Qualitative data analysis..................................................................................................32
3.11 Measurement of variables...................................................................................................33
3.12 Ethical Considerations........................................................................................................33
CHAPTER FOUR.......................................................................................................................29
PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS.........................29
4.1 Introduction............................................................................................................................29
4.2 Response Rate........................................................................................................................29
4.3.1 Sex of the respondents........................................................................................................30
4.3.2 Age of the respondents.......................................................................................................30
4.3.3 Education level of respondents..........................................................................................31
4.3.4 Years of service in the organization..................................................................................32
4.4 Empirical findings.................................................................................................................33
4.4.1 Value for money at Stanbic Bank Uganda Limited.........................................................33
4.4.2 Supplier performance management and value for money..............................................37
4.4.3 Supplier development and value for money.....................................................................43
CHAPTER FIVE.........................................................................................................................50
SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS...................50
5.1 Introduction............................................................................................................................50
5.2. Summary of major findings.................................................................................................50
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5.2.1: Supplier performance management and value for money............................................50
5.3. Discussion of findings...........................................................................................................51
5.4 Conclusions.............................................................................................................................54
5.5 Recommendations..................................................................................................................54
REFERENCES............................................................................................................................57
APPENDICES.................................................................................................................................i
AND OPERATIONS’ DEPARTMENT.......................................................................................i
SECTION B: QUESTIONS ON THE STUDY VARIABLES..................................................ii
APPENDIX TWO: INTERVIEW GUIDE FOR THE MANAGERS......................................v
APPENDIX III: SAMPLING GUIDE.......................................................................................vii
xi
LIST OF TABLES
Table 3.1: sample size determination.........................................................................................27
Table 3.2: Results of content validity for research tools..........................................................32
Table 3.3: Reliability test results of research instruments.......................................................33
Table 4.4: Response rate.............................................................................................................29
Table 4.5: Sex of the respondents...............................................................................................30
Table 4.6: Value for money at Stanbic Bank Uganda Limited................................................34
Table 4.7: Descriptive statistics on supplier performance management................................39
Table 4.8: Model summary.........................................................................................................43
Table 4.9: Regression of supplier performance management.................................................44
Table 4.10: Descriptive Statistics on supplier development and value for money.................45
Table 4.11: Model Summary......................................................................................................51
Table 4.12: Regression analysis for supplier development......................................................51
xii
LIST OF FIGURES
Figure 1.1: Relationship between supplier relationship management and Value for
Money..............................................................................................................................................8
Figure 4.2: Age of the respondents.............................................................................................31
Figure 4.3: Highest Level of Education.....................................................................................32
Figure 4.4: Years of service in the organization.......................................................................33
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LIST OF ACROYMNS AND ABBREVIATIONS
CRM: Customer Relationship Management
SRM: Supplier Relationship Management
TCO: Total Cost of Ownership
VFM: Value for Money
CIPS: Chartered Institute of Procurement and Supply
SFI: Supervised Financial Institutions
UNCTAD: The United Nations Conference on Trade and Development
xiv
xv
ABSTRACT
The study focused on the effect of Supplier Relationship Management on Value for
Money in procurement in commercial banks in Uganda with a case study of Stanbic
Bank Uganda Limited. The study was guided by the following research objectives
namely; to examine the effect of Supplier Performance Management on Value for
Money at Stanbic Bank Uganda Limited and to examine the effect of Supplier
Development on Value for Money in Stanbic Bank Uganda Limited. The study adopted
a cross-sectional survey design where both quantitative and qualitative approaches
were used. Out of the 73 distributed questionnaires, 68 were returned correctly filled
representing 93%. Out of the 19 respondents that were targeted for interviews, 15 were
interviewed implying a response rate of 79%. The overall response rate was 90%.
The findings established that Supplier Performance Management had a moderate

positive effect on the Value for Money at Stanbic Bank Uganda Limited. The adjusted R
square which explains the effect of Supplier Performance Management on Value for Money
was 0.35 which accounts for 35% variation in Value for Money. The results of the study
further indicated a significant effect of Supplier Performance Management on Value for
Money given that P-value (P=0.00<0.05).
The findings established that supplier development had a strong positive effect on the
value for money at Stanbic Bank Uganda Limited. The study concluded that Supplier
Performance Management significantly affect procurement Value for Money and the failure
to set supplier performance targets and reviewing supplier performance constrain the
attainment of procurement agility, Value for Money and internal customer satisfaction
indicators of procurement. From the study, it was found that supplier development played an
important role in the Value for Money at Stanbic bank especially through supplier training,
xvi
early supplier involvement, and financial support. The adjusted R square which explains the
effect of supplier development on value for money was 0.52 which account for 52% variation
in value for money. The study results further indicated a significant effect of supplier
development on value for money given that P-value (P=0.00<0.05).
The study recommended that management should set supplier performance indicators,
quantity expectations and quarterly performance expectations for strategic supplies.
Management of the banking sector in particular should introduce a policy of “supplier
development”. It should focus on supplier training and enrolment in seminars and
workshops to provide them with capital benefits to undertake their work.
xvii
1
CHAPTER ONE
INTRODUCTION
1.0 Introduction
Value for money (VFM) is based on the idea of distributing costs and benefits based on
the total cost of ownership (Mungu, 2021). As noted by Karanja (2021), effective public
sector procurement is based on value for money (VFM). This is the accomplishment of
the desired procurement objectives at the best price possible, not necessarily the lowest
price, but based on a fair assessment of financial and non-financial aspects pertinent to
procurement. Value for money bolsters the idea that greater results are obtained when
resources are employed more effectively and bought from competitive markets
(Murebwa et al., 2023).
For procuring organizations to attain value-for-money during procurement operations,

a variety of aspects other than the purchase price must be taken into consideration. One
such component accepts the lowest price provided by suppliers of goods, contractors,
and service providers (Musanzikwa, 2013). The procurement strategy, which is created
during the planning phase of the procurement cycle, offers the highest opportunity for
getting value for money (Bosio et al., 2022). Procurement activities affect the quality of
results (ADB, 2018). Most government departments spend a significant amount on
procurement activities, which warrants them to be efficiently managed to get the most
value out of them (Musanzikwa, 2013). Value for money (VfM) in public-sector
procurement is a crucial criterion by which procuring entities can defend their
purchase decisions. It demonstrates how value for money is worth (output) connected to
a specific cost from the users’ or the targeted public’s viewpoint (input). This position
was also averred by Karanja (2021), who broadly defined value for money by linking it
to economy, effectiveness, and efficiency of the work produced (the output), as well as
service.
As much as going through the documentation process is important, it is not as crucial as

being clear about how vendors match projects and government objectives (Chikwere et
al., 2022). Hence, vendors must be able to explain their value for money strategy and
prior performance before they are awarded the tender (Bosio et al., 2022). This is
critical in guaranteeing that the vendor is capable of delivering value for the monetary
objective. The performance measurement of value for money presumes that goals and
objectives are clearly stated and consistent at both the policy and project levels and that
29
procuring entities invest in data collection, monitoring, and evaluation systems (Kgobe
& Chauke, 2021).
Value for money is the core principle governing procurement. Officials buying goods
and services need to be satisfied that the best possible outcome has been achieved taking
into account all relevant costs and benefits over the whole of the procurement cycle
(Raymond, 2008). This calls for client satisfaction, organisational interest, fair play,
honesty, justice and equity (Korosec and Bartle, 2003)
Kgobe, F. K., & Chauke, K. R. (2021). Ethical leadership and public accountability:
Problematiques of South Africa’s State-Owned Enterprises. TSSJ, 26, 45–53.
Chikwere, U. G., Dzandu, S. S., & Dza, M. (2019). Compliance Issues with Public
Procurement Regulations in Ghana. IJBM, 14(5), 1.
Musanzikwa, M. (2013). Public procurement system challenges in developing countries: The

case of Zimbabwe. International Journal of Economics, Finance and Management
Sciences, 1(2), 119–127. https://doi.org/10.11648/j.ijefm.20130102.18 [Crossref], [Google
Scholar]
Murebwa, S., Mbizi, R., & Chikazhe, L. (2023). Entrepreneurial behaviour and performance
of Utility parastatals: Implications for Re-industrialisation and SDGs. Proceedings of the
Chinhoyi University of Technology International Conference (p. 134). Chinhoyi Univerity of
Technology. [Google Scholar]
Karanja, M. (2021). Value for Money (VfM) in the public sector. Pwc. Retrieved August 16,
2022, from,https://www.pwc.com [Google Scholar]
30

Sciences, 1(2), 119–127. https://doi.org/10.11648/j.ijefm.20130102.18 [Crossref], [Google
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of Utility parastatals: Implications for Re-industrialisation and SDGs. Proceedings of the
Chinhoyi University of Technology International Conference (p. 134). Chinhoyi Univerity of
Technology. [Google Scholar]
Supplier relationship management is a pertinent element in achieving Value for Money

in the procurement process. It is a continuous process that needs to be employed by
both the public and private sector in their respective procurement process. This study
examines the relationship between supplier relationship management and value for
money in Stanbic Bank Uganda Limited. Supplier relationship management is the
independent variable and Value for Money is the dependent variable.
This chapter presents the background of the study, the problem statement, purpose of
the study, general objectives and specific objectives of the study, research questions,
hypotheses, conceptual framework, significance of the study, rationale/justification of
the study, scope of the study and operational definitions.
1.1 Background to the Study

This section presents the background of the study under four dimensions that is, the
historical, theoretical, conceptual and contextual perspectives.
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1.1.1 Historical Background
Traditionally VfM was thought of as getting the right quality, in the right quantity, at
the right time, from the right supplier at the right price. This concept has been updated
to obtaining better quality of goods or services in more suitable quantities, just in time
when needed, from better suppliers at prices that continue to improve (World Bank
Report, 2013). It is also often described in terms of the ‘three Es’ economy, efficiency
and effectiveness: economy minimizing the cost of resources for an activity (‘doing
things at a low price’); efficiency performing tasks with reasonable effort (‘doing things
the right way’); effectiveness the extent to which objectives are met (‘doing the right
things’). Value for money is derived from the optimal balance of benefits and costs on
the basis of total cost of ownership. As such, value for money does not necessarily mean
that a tender must be awarded to the lowest tenderer (Civil Service College, 2010).
Value for money is a term generally used to describe an explicit commitment to
ensuring the best results possible are obtained from the money spent. In the UK
Government, use of this term reflects a concern for more transparency and
accountability in spending public funds, and for obtaining the maximum benefit from
the resources available (Barnett et al. 2010). Value for money in public procurement is
achieved through pursuing the lowest whole of life cost, clearly defining relevant
benefits and delivering on time. Preventing waste and fostering competition,
transparency and accountability during the tendering process are key conditions to
achieving value for money.
According to Atkin and Brooks (2009), value for money is often used to express the
satisfaction of the cost of a service of a given quality. As value for money is often
equated with reducing costs, organisations can believe that they are achieving value for
money if they are paying less for a given service compared to last year. However, even
though cost is easier to measure, Atkin and Brooks (2009) stress that value for money is
about quality of a service and the effectiveness of how it is delivered. Atkin & Brooks
(2009) therefore claims that organisations, in order to achieve value for money, should
set both cost and quality objectives and only prioritise cost where financial constraints
are severe. However, Koller et al. (2010) argue that in order to achieve VfM, goods and
services should be acquired by competition unless there are convincing reasons not to
do so. The authors argue that the form of competition should be appropriate to the
complexity of the procurement and barriers to the participation of suppliers should be
32
removed. In practice, the level of competition is indicated by the estimated value of the
proposed procurement.
Since the 18th Century, Supplier Relationship Management in public organizations

emerged as part of the public procurement reforms recommended by International
Monetary Fund (Adjei, 2005). Throughout the 2000s, SRM has continued attracting
and gaining popularity in both the developed and developing nations (Cowell, 2009).
The act of purchasing since history has been highly referred to as a clerical function-
meaning that the interplay between the buying agents and the suppliers in the chain is
usually done adversary (Burton, 2004). This kind of understanding has been changing
through history and many people started shifting their understanding from what is
called adversarial to seeing it as a collaborative function (Burt, Dobbler & Starling,
2003).
In the context of Africa today, South Africa, Kenya, Rwanda and Tanzania for example,
better Value for Money from procurement is achieved by getting an increased level or
quality of service at the same cost, avoiding unnecessary purchases, ensuring that user
needs are met but not exceeded, and specifying the purchasing requirement in output
terms so that suppliers can recommend cost-effective and innovative solutions to meet
that need (Apiyo & Mburu, 2014). In Uganda, Value for Money is achieved through
optimizing the cost of delivering a service or goods over the full life of the contract
rather than minimizing the initial price, introducing incentives into the contract to
ensure continuous cost and quality improvements throughout its duration, aggregating
transactions to obtain volume discounts, and collaborating with other departments to
obtain the best prices and secure better discounts from bulk buying (Basheka, 2009).
Achieving Value for Money and demonstrating results is a key issue in the international
development sector (Flynn, 2018; Changalima, 2016). The situation is no different in
Uganda where, due to lack of competence of most procurement officers in terms of
utilizing the Supplier Relationship Management practices, there have been a number of
problems in the procurement units hence affecting timely delivery of both government
and private sector projects. This study therefore seeks to investigate the relationship
between Supplier Relationship Management and Value for Money in procurement;
33
taking a case study of Stanbic Bank Uganda Limited.Supplier Relationship
Management can be used as a way to manage a firm’s communication and relationships
with other firms that supply products and services that are required. Handfield et al.
(1999) argued that for a firm to achieve competitiveness it must incorporate its
suppliers within the supply chain effectively. Building of trust, providing support for
suppliers, using the input of suppliers when coming up with new items to manufacture,
sharing of information and building long-term relationships are some of the ways that
organizations and it suppliers can cooperate so as to achieve competitiveness and
improve performance (Langfield-Smith & Greenwood, 1998).
Due to increasingly high competition and other challenges in the global market and
Petroleum industry inclusive, firms have put more emphasis not only on customer care
management but also in supplier relationship management as a strategic direction
towards building a competitive advantage for themselves. Effective and efficient
Supplier Relationship Management (SRM) not only improves organization cash flow, it
also generates the best satisfaction in building and strengthening supply chain
relationship Creating and maintaining good and sustainable Supplier Relationship
Management is one of the philosophies of ensuring compliance with essential features
such as partnership, proper risk management, respect, developing new capabilities
(Donoghue, 2011). McCutcheon and Stuart (2000) express that Supplier relationship
management is the exact, undertaking, wide evaluation of suppliers’ abilities and assets
concerning, general business technique, affirmation of what activities to partake in with
different suppliers, organizing and execution of all coordinated efforts with product or
service suppliers in an arranged way over the relationship life cycle keeping in mind the
end objective is to increase the regard recognized through those collaborations.
1.1.2 Theoretical Background

The study was guided by Transaction Cost theory (Williamson, 2007). This theory is
one of the most important organisation theories because of the studies that have been
encouraged through it (Williamson 2007), and is one of the main perspectives in
organisational studies (David and Han, 2004). The vital commitment of Transaction cost
economics to organisation theory, resulted in a wide range of empirical contributions
(Macher and Richman 2008), using transaction cost economics, for instance as a make
or buy decision help, or verification of the right contract mode.
34
The theory assumes of bounded rationality, meaning that human agents work under
limited time and knowledge, (Williamson 1987), and are limited information processors
(Gigerenzer and Goldstein 1996), which results in unpredictable inadequate contracts.
The second one is named opportunism on that mere promises are taken into account
which is not reliably self-commissioning (Williamson 1987). Williamson continued
describing the human agents in a paper from 2010, where he interpreted the human
being and outlines that individuals typically do what they say and if not it is an
exceptional instance of friction. Human beings are regulated by routines, and once the
management has established a base of routines that follow the purpose of the
organization, it has to care about exceptions of human conduct. Inconveniences can be
created by contractual deficiency that serves an interest group an opportunistic
advantage (Williamson 2010).
Transaction Cost Economics (TCE) inspects how business partners who collaborate
with each other shield one another from harmful subsidiary with differing relationships
(Klein 199). It has been the most important new institutional theory which puts the
accentuation on the decision on the sourcing predicament, if to outsource or not. The
sourcing situation of a firm is likewise described as the make-or-buy decision of a firm.
The two primary drivers of Transaction Cost Economics are uncertainty caused by the
external environment and costs, which consist of Coordination costs and Transaction
costs (Fink 2006).
The Transaction Cost Theory (TCT) emphasizes the fact that by lowering exchange costs,
organizations can improve their economic efficiency (Williamson, Citation1993). It is a
theory that provides a framework for analyzing the governance structure of contractual
relationships within a supply chain. The theory sheds light on the various factors that
contribute to interorganizational cooperation in supply chains. The practices that go into
supplier development are in line with the buyer-supplier relationships and include
mechanisms for maximizing the benefits that are intended to be gained. Depending on the
nature of supplier development practices (direct or indirect practices), transaction costs are
observable, and some of them may be concealed in buyer-supplier relationships. There is
some evidence in published research that links supplier development practices to lower costs
(Krause, 2020).
The TCT provides an effective framework for managing procurement contracts and other
important contractual mechanisms (Rasheli, 2016). Consequently, since the contractual
mechanisms govern the relationships between buyers and suppliers, buyers can strive for
35
improved management of suppliers to ensure procurement deliverables are met. The TCT
suggests that buyers may experience more costs and efforts that are directed at managing the
contracts (Williamson, 1993; Zhao et al., 2018). Therefore, based on this, organizations that
experience greater contract management difficulties in terms of the costs associated with
managing contracts with engaged suppliers are less likely to achieve the desired procurement
outcomes. These difficulties can be assessed in terms of the efforts and costs spent in
managing formal contracts with engaged suppliers.
1.1.3 Conceptual Background

Supplier Relationship Management is the process that defines how a company interacts
with its suppliers. This is a mirror image of Customer Relationship Management
(CRM). Just as a company needs to develop relationships with its customers, it also
needs to foster relationships with its suppliers (Oyugi & Getuno, 2019). The desired
outcome is a win-win relationship where both parties benefit (Supply Chain
Management Institute, 2008).
Supplier Relationship Management (SRM
Supplier relationship management (SRM) is the systematic approach to evaluating

vendors that supply goods, materials and services to an organization, determining each
supplier's contribution to success and developing strategies to improve their
performance. The SRM discipline helps to determine the value each supplier provides
and which ones are most critical to business continuity and performance. It also enables
managers to cultivate better relationships with suppliers based on each supplier's
importance (Chartered Institute of Procurement and Supply (CIPS, 2020).
36
The concept of Value for Money (VfM) in everyday life is easily understood as “not
paying more for a good or service than its quality or availability justify”.
Value for Money is the achievement of the lowest whole of life cost and clearly defined
benefits, purpose of goods, works and services procured at the right time, within budget and
scope, and of the required quality (Nsiah et al. 2016).
Value for Money (VfM) is defined as the optimum combination of whole of life costs and
quality of the good or service to meet the user’s requirement (Moralles et al. 2015). Value for
Money (VFM) is not about achieving the lowest price. It is about achieving the optimum
combination of whole life costs and quality.
Value for Money in public procurement is achieved through pursuing the lowest whole
of life cost, clearly defining relevant benefits and delivering on time. Preventing waste
and fostering competition, transparency and accountability during the tendering
process are key conditions to achieving Value for Money
1.1.4 Contextual Background

Stanbic Bank Uganda Limited (Stanbic Bank) is a private limited liability company
incorporated in accordance with the laws of Uganda and licensed to carry out
banking/financial business by Bank of Uganda. It one of the biggest banks in Uganda
that offers its clients a wide range of personal, business and corporate and investment
banking products through its branches spread across Uganda and its online banking
platforms. Stanbic Bank in accordance with its Procurement Procedure Manual has a
procurement unit whose purpose in carrying out all purchases is to maximize Value
For Money, including getting the most competitive prices for goods and services on the
market by putting into consideration whole -of-life costing, the prevailing market
forces, the prevailing market factors and best in class procurement industry practices
37
because it would like to be in a position where it is getting a fair deal on all its
purchases.
Stanbic Bank has promulgated the supplier relationship management framework whose
purpose is to govern its Supplier Relationship Management activities including inter
alia; periodic supplier performance reviews, external supplier risk/controls assurance,
financial stability checks, invoice validation/processing and contracts review for
Strategic (High risk), Operational (Medium risk) and Commodity (Low risk) supplier
relationships as per the segmentation process (Stanbic Bank Uganda Limited Supplier
Relationship Management Framework version 1.0). As a result of the adoption of the
Supplier Relationship Management practices by Stanbic Bank, the Procurement unit
saved Uganda Shillings Four Billion One Hundred Million Only (UGX 4,100,000,000)
(Procurement Unit Report, 2019) from the purchase of goods and services hence
achieving Value for Money.
1.2 Problem statement
Value for money (VFM) is based on the idea of distributing costs and benefits based on
the total cost of ownership (Mungu, 2021). As noted by Karanja (2021), effective
supplier relationship management is based on value for money (VFM). This is the
accomplishment of the desired procurement objectives at the best price possible, not
necessarily the lowest price, but based on a fair assessment of financial and non-
financial aspects pertinent to procurement (Adi & Dutil, 2018).
The significance of value for money in any supplier relationship management cannot be
over emphasized. For effectively delivery of services, value for money in the supplier
relationship management can be illustrated in terms of ensuring economy, efficiency
and effectiveness in use of resources.
In order to ensure Value for Money (VfM), Stanbic Bank has put in place a number of
measures such as ensuring an effective supplier appraisal process, putting in place a
quality control unit as well as a fully functional procurement unit. Preventing waste and
fostering competition among their suppliers, promoting transparency and
accountability during the tendering process are key conditions they have put in place in
this endeavour. In addition to these, the staff knowledge and skills are kept at par
through regular trainings on the job and off the job. Despite these efforts, Stanbic Bank
is not realizing Value for Money for most items purchased, and in addition to that, there
38
is concern over escalating costs and budget excesses across various high value
technology procurement requirements, lack of establishment of effective Supplier
Relationship Management which contributes to 61% of losses made in procurement
bids, loss of 4.7 billion in procurement of bicycles that Stanbic bank had forged the bill
of lading, (Stanbic Bank, 2020, Odongo, 2021). This problem is partly attributed to poor
supplier performance management and lack of supplier development at Stanbic Bank,
which, if not addressed will lead to continued losses for the bank as well as poor
management of its procurement processes, leading to negative consequences (Cheptora
et al., 2018). This has prompted the study to identify Supplier Relationship
Management as a factor that influences the achievement of Value for Money in
commercial banks with the case study of Stanbic Bank Uganda Limited.
1.3 Purpose of the study
The purpose of the study was to examine the effect of supplier relationship management
on Value for Money in procurement in commercial banks in Uganda with a case study
of Stanbic Bank Uganda Limited.
1.4 Specific Objectives
i. To examine the effect of supplier performance management on value for money
at Stanbic Bank Uganda Limited.
ii. To examine the effect of supplier development on value for money in Stanbic
Bank Uganda Limited.
1.5 Research Questions
i. What is the effect of supplier performance management on value for money at
Stanbic Bank Uganda Limited?
ii. What is the effect of supplier development on value for money at Stanbic Bank
Uganda Limited?
1.5 Hypothesis of the Study
H1: Supplier performance management as significant relationship with value for money
in Stanbic Bank Uganda Limited
H2: Supplier development as significant relationship with value for money in Stanbic
Bank Uganda Limited.
1.6 Conceptual Framework
According to Swaen and George (2022), conceptual framework illustrates the expected
relationship between study variables. It defines the relevant objectives for your research
process and maps out how they come together to draw coherent conclusions. In this case
39
the independent variable is supplier relationship management and the dependent
variable is Value for Money in commercial banks in Uganda.
Supplier Relationship Mgt (SRM) (IV)

Supplier performance management
 Setting of performance targets Value for Money (VFM) (DV)
 Appraisal management  Quality of a service offered
 Monitoring of performance  Getting the right quality
Supplier Development  Delivery of services

 Supplier training  Satisfaction of the cost of a
 Supplier financial support service
Source: Modified from Togar, Simatupang & Ramaswami (2005), “An integrative
framework for supply chain collaboration”
Figure 1.1: Relationship between supplier relationship management and Value for
Money
In the figure above, the independent variable is supplier relationship management and
value for money is the dependent variable. The independent variable is measured in
terms of supplier performance management with sub themes like (setting of
performance targets, appraisal management and monitoring of performance) and
supplier development with sub themes like (supplier training and supplier financial
support). The dependent variable is measured in terms of quality of a service offered,
getting the right quality, delivery of services and satisfaction of the cost of a service. Any
change in the independent variable will bring about a change in the dependent variable.
1.7 Significance of the Study
The study is expected to contribute to different sectors in the following ways:
40
The policy makers may gain more insight on value for money and are expected to use
the findings and recommendations to enhance the achievement of value for money in
Procurement through the adoption of supplier relationship management practices.
The commercial banks may be able to understand the importance of Supplier
Relationship Management practices in Procurement and how it will achieve Value for
Money. They will therefore embrace the concept and put it at the center of their
supplier relationships.
The study is expected to add to existing stock of literature in the field of procurement
and supply chain management. Other scholars may validate the findings and use the
study as a reference text.
Other researchers and institutions may follow the areas recommended for further
research as a means of increasing body knowledge on supplier relationship management
and value for money in procurement.
41
1.8 Justification of the study
Value for money in services delivery is paramount. Therefore, it is imperative to put in
place procurement management practices that ensure value for money such that there is
economy in procurement, effectiveness and efficiency. However, public institutions
continue to experience lack of value for money with procurement of poor quality
commodities/ products, delayed deliveries, incomplete commodities deliveries,
incompatible technologies and stock outs. In recent decades, there has been significant
shift in the role of the purchasing function from being mainly an administrative or
clerical role (fulfilling technical or operational requirements) to a more strategic,
commercial and business focused role. A significant proportion of turnover and total
cost is now typically spent on the procurement of goods, services or works from external
organizations. Procurement responsibility therefore extends to a larger proportion of
the organization’s spending and procurement decisions can make a significant impact
on services delivery in financial institutions. This study maybestudy maybe useful to the
government agencies and financial institutions in helping them achieve their objectives.
1.9 Scope of the study

This section defines the research boundaries/scope of this study in terms of subject,
geographical coverage and time under review.
1.10.1 Subject scope
This study shall look at the various SRM practices in procurement at Stanbic Bank
Uganda Limited, the benefits of SRM and the extent to which SRM contributes to the
achievement of Value for Money (quality of a service offered, getting the right quality,
delivery of services and satisfaction of the cost of a service)
1.10.2 Geographical scope
The researcher shall conduct this study at Stanbic Bank Uganda Limited head office
located at Plot 17 Hannington Road Crested Towers, Short Tower, Kampala Uganda.
The case study was also selected owing to the fact that the SRM environment is an area
of regulatory interest by the Central Bank of Uganda through its Outsourcing
guidelines issued to all Supervised Financial Institutions (SFIs) in Uganda, Stanbic
Bank Uganda Limited being the largest SFI.
42
1.10.2 Time scope
This study shall focus on the Supplier Relationship Management environment in the
period 2015-2023.
1.11 Operating definitions
Supplier Relationship Management (SRM)
Supplier Relationship Management or Supply Management is a comprehensive
approach to managing an organization’s interactions with the firms that supply the
products and services it uses. SRM is also a systematic approach for developing and
managing partnerships. It is focused on joint growth and value creation with a limited
number of key suppliers based on trust, open communication, empathy and a win-win
orientation.
Procurement means acquisition by purchase, rental, lease, hire purchase, licence,
tenancy, franchise, or any other contractual means, of any type of works, services or
supplies or any combination.
Value for Money: This is the relationship between the money that enters the chain (the
costs) and the resulting outcomes and impact (White et al., 2013). In this study, it was
considered to refer to ensuring economy, efficiency and effectiveness in the buying of
commodities.
Supplier Performance Management is a business practice that is used to measure,
analyse, and manage the performance of a supplier.
Financial Support refers to the buying firm's effort to develop its suppliers by engaging
in human and capital resources which include technical support, direct investment in
equipment and tools
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CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
The literature in this chapter is reviewed under the following sub headings; Theoretical
review, actual literature review and summary. The literature reviewed in this section
describes and examines the supporting theories that related to the research objectives
outlined in chapter one.
2.2 Theoretical review
The study was guided by Transaction Cost theory (Williamson 2007). This theory is one
of the most important organisation theories because of the studies that have been
encouraged through it (Williamson 2007), and is one of the main perspectives in
organisational studies (David and Han, 2004). The vital commitment of Transaction cost
economics to organisation theory, resulted in a wide range of empirical contributions
(Macher and Richman 2008), using transaction cost economics, for instance as a make
or buy decision help, or verification of the right contract mode.
The transactional cost theory states that transactions via market mechanisms incur cost,
particularly the costs of searching for exchange partners and making and enforcing
contracts. Therefore, the organization will either choose to manage these resources
externally or internally, depending on transaction costs. For instance, the theory
predicts that organizations would internalize most transactional activities within
hierarchies when these costs are high. On the other hand, organizations would prefer to
outsource the activity when the costs are low. It is because paying an external source to
perform the activity would be cheaper.
According to this theory, all organizations encounter expenses with market
transactions. Depending on whether these costs are high or low, organizations
sometimes favour internal (or inhouse) hierarchies or favour external markets as a
structure for their economic governance. A third governance structure, known as
relational or hybrid, is an intermediate mechanism combining the other two. This
theory guides the study as it contends that transaction sizes between the influences the
44
Strategic Supplier Management practices. This is however affected by the uncertainty
and adaptation around the relationships Emmett and Crocker (2009) notes that the
governance of a relationship is predicted by the asset specificity, or the extent of
investment involved in a transaction in the theory and the bigger the transaction, the
stronger or sensitive the relationship. According to Tarafdar & Qrunfleh (2020), other
predicting factors are the environmental and behavioral uncertainty surrounding the
transaction consequently the scope of opportunism. The theory further puts
relationship specific investment and the reduction in uncertainty as the key to any
relationship success that can be enjoyed by both parties. To illustrate this, if one party
makes relationship specific investment, it will only be done when the other party also
makes the same investment that is relationship specific or contractual guarantees be
given. The factors in the transaction cost theory that are relevant to this study are
adaptation and uncertainty.
Lower transaction costs which can be as result of technology allows information to be
communicated in real-time and at much lower costs, thereby reducing the costs that are
required in order to find a particular good that is focus of the transaction (Hamilton,
2020). The author also suggest that strategic supplier management practices enable an
easier matching between buyers and sellers once goods have been located and lowers the
cost of brokerage.
Financial institutions
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2.3 Related literature review
This section covered literature review according to the research objectives as indicated.
2.3.1 Supplier performance management and Value for money
Supplier performance management
Setting of performance targets
Loberg et al (2021) argue that this system concentrates on setting and aligning
individual and organizational goals but it can also be used for evaluating performance.
Participation in the setting of objectives allows managers to control and monitor the
performance by measuring outcomes against the goals that the employees helped to set.
Chopra, (2017) state that the MBO system should keep employees focused on the
deliverables of their job and in this way, the organization would have delivered on a
strategic promise. Essentially, performance assessment on individual employees involves
a wide spectrum of people including internal and external customers, suppliers, peers,
team members, superiors and subordinates (Loberg et al (2021). The information can
be gathered by using formal and structured interviews, informal discussions, surveys
and observations. The appraisal information is used in feedback to the employee and it
serves as an important input for career development and training. The broad spectrum
ensures a good evaluation of the workers’ strengths and weaknesses and it enhances
self-insight to develop to one’s full potential. This approach fits with the current trends
in leadership thinking.
Weintraub, Cassell and DePatie (2021) conducted a research on SMART goal setting
format for purposes of decreasing stresses and increasing engagement and work
performance. The review point was to look for method for getting positive work results
with regards to execution, commitment, and diminished burnout. The assumption that
people are passive agents who only experience work flow when good working conditions
are present led to a lack of research on work flow. As a result, the study tested a nude
SMART goal-setting intervention with the goals of improving work outcomes and
improving work flow. The study was based on 65 American MTurk workers who have
full-time work engagement and assessment was done on 5-day experimental
experiences. The results showed setting goals resulted in well-coordinated workflows
thus reduced the level of stress among staff on a daily basis. Additionally, it increased
staff engagement, resulting in improved performance compared to the control group.
The study created contextual gaps since it was done in America and also created
methodological gaps by conducting an exploratory study with control group.
46
Conceptualization of performance is also different since it used elements of decreased
stress and increased engagement
The clarity of long-term strategic goals determines the effectiveness of supplier
development. Supplier development efforts should focus on future capabilities in
technology and product development rather than on current quality and cost (Barbieri,
et al., 2021). Effective communication plays a key role between buyers and suppliers to
motivate them; it enhances the mutual understanding of both parties and reassures the
conflict resolution. A long term commitment of buying firm assures a relationship with
suppliers where suppliers willingly can make changes in their operations to fulfil the
requirements of buyer (Bayo-Moriones, et al., 2020). Supplier evaluation is another
important strategy to improve buyer-supplier performance. For the purpose, buyers
should select suppliers carefully and evaluate them regularly. Supplier evaluation
results could provide valuable information about general areas of weakness where
performance improvements were needed. When suppliers follow further developments
of its performance and capability by itself to improve competence, a rational and
tactical match come into exist between buyer and supplier management which increases
possibilities of success in the cooperation (Monari and & Wanjau, 2022).
Appraisal management
Organizations are normally set up to achieve certain goals through their operations.
This is expressed in form of organizational objectives and targets which are meant to
drive day to day operations. Organizations have used performance appraisals as a tool
to advance their competitiveness through creation of a competitive edge in a highly
competitive business environment. Nyamai and Minja (2023) noted that organizations
in Europe had applied performance appraisals on their workers to assess the
performance of their workers to better understand their capabilities, skills gaps and
coming up with training programs. This has helped many organizations align their
employee development and empowerment programs towards attainment of
organizational objectives (Balaraman, Gebre, Berhe & Priya, 2018). They use this
appraisal to manage the performance of their organizations. Performance appraisals
have been implemented in many organizations to help evaluate the task execution
among staff towards the realization of organizational objectives. It is common practice
to find management teams evaluating the way employees perform their tasks by
comparing them to targets so as to establish variations (Makokha, Namusonge, Kanali
and Chepkorir, 2017). It is significant that organizations appraise their staff to assess
47
how they are faring on at their places of work, identify challenges, ways of reducing the
effects of identified challenges for better performance. Firms need to find ways of
exploiting resources at their disposal to achieving a position that may not be easily
rivalled by the competition. Unique human resource has been identified as one of the
key sources of unrivalled competitive position if they possess unique skills, experience
and expertise.
As noted by Ushakov (2021), well organized and implemented appraisals among staff
have the potential of enhancing the speed and the quality with which decisions are
made. The information availed on appraisal can be helpful in planning and execution of
promotions, career choices and effecting transfers and secondment. It helps
management understand where they need to put more efforts for improved
performance results. The results from appraisals can help align management and other
staff’s expectation for improved performance results (Mwangi and Njuguna, 2019).
Management can use appraisal processes to motivate employees in execution of duties
that help attain pre-set objectives. Outcomes of performance appraisals could help in
directing organizational activities like issuance or distribution of bonuses, career
advancement and promotions. They help management is coming up with targets for the
next period in a way that can easily be understood and managed by staff. Through
target setting, organizations are able to focus their production process to ensure that
objectives are met. This ensures that targets for all employees are laid out early and
followed periodically to ensure that any deviations are dealt with in time. This help in
ensuring that employee jobs and key performance indicators are aligned with
expectations of the organization.
Important to note is that performance appraisal is very critical to employee
performance (Antara et al., 2020). By appraising the suppliers, various performance
aspects are generated for management to address. An individual’s performance is rated
and scored which highlights how they are performing against the set targets and goals.
Critical in this process is that the employee is able to understand his/her weaknesses
which have to be worked on. Similarly, the supervisors are able to understand each
one’s high performing points and weakest points hence devise means of addressing
them. In essence, appraisal is healthy as it checks the employee’s level of input against
the outputs hence resulting into improved performance when weaknesses are addressed.
Therefore, it is highly vital for organizations like Stanbic Bank Uganda Limited to
48
regularly conduct performance appraisals which has a direct impact on their
performance as revealed in this study
Expectations for employee’s performance are established in employee performance
plans. Employee’s performance plans are all of the written or otherwise recorded,
elements that set forth expected performance. A plan must include all critical and non-
critical elements and their performance elements tell suppliers what they have to do and
standards tell them how they have to do it. The critical elements include planning
monitoring, developing, rating and rewarding CQU, (Roberts, Neumann, & Cauvin,
2020). Management by objectives as one of the key appraisal methods is defined as a
result-based evaluative program (Loberg et al., 2021). In greater detail, the goals of the
performance appraisal system from an MBO perspective are mutually defined by a
number of key stakeholders who include the subordinates, supervisors and suppliers as
well. A typical MBO appraisal system consists of several steps. The process begins by
the establishment of clear objectives for the employee. An action plan detailing the way
in which the objectives are to be achieved is develop. The employee is then allowed to
implement the developed action plan. This allows for appraisal of performance in an
objective maimer. Corrective actions are taken in situations deemed necessary as well as
new objectives for the future established.
Monitoring of performance
Al Kurdi, Alshurideh and Al Afaishat (2020) asserted that monitoring of suppliers is
important to motivate them. In monitoring the suppliers, the supervisors play a critical
role of checking progress, supporting to bridge gaps and providing feedback to the
suppliers. Hence Armstrong emphasizes that a good supervisor should be able to scan
the work environment in which the junior staff work to ensure that it is supportive
enough to enable the employee achieve the set goals and objectives. He further notes
that the supervisor must support the juniors to update their objectives and support
them to learn continuously on the job and task accomplishment through coaching (Al
Kurdi, Alshurideh, & Al Afaishat, 2020).
Novita and Sudaryan (2021) confirm that performance evaluations are crucial parts of
performance management. Similarly, Jedaia and Mehrez, (2020) reaffirm performance
evaluation as a basic tool that makes suppliers very effective and active in performing
their tasks and duties in the organization. This study clearly noted that evaluation
feedback is often provided to the suppliers’ which helps them to perform their tasks.
This feedback is helpful in highlighting any performance gaps that need to be
49
addressed. In fact, Okoth and Florah (2019) were right to assert that by providing
feedback, it helps the suppliers to identify those weaknesses in their current
performance hence enabling them to make adjustments for purposes of achieving the
stated goals and targets.Supplier monitoring allows companies to keep track of their
current suppliers’ performance while also encouraging continuous improvement
(Subramaniam et al., 2020). Supplier monitoring is associated with the function of
keeping track of the available suppliers to ensure that they are potentially meeting the
needs of buying organisations (Maestrini et al., 2018). Available literature has linked the
role of supplier monitoring with performance in different streams of literature. Some
have found that supplier monitoring has no effect on performance (Subramaniam et al.,
2020), whereas monitoring has been found to positively affect performance in other
ways (Maestrini et al., 2018). Therefore, supplier monitoring is an important function in
organisations and is linked to performance. There are studies that have used cost
reduction when measuring procurement performance (Wachiuri, 2018). Similarly,
procurement operational efficiency is an organisation’s ability to ensure the most
costeffective way of delivering goods and services (Kakwezi and Nyeko, 2019).
Supplier Development
Supplier training
Supplier development is any effort a buying firm expends on a supplier to increase the
performance and capabilities of the supplier to meet the buying firm’s own short-term or long
term supply needs (Ochieng, 2021). Supplier development is any effort or attempt by a
buying firm, that is the manufacturer with its supplier to enhance the performance and/or
capabilities of the supplier and in that way meet the manufacturers supply needs and
specifications (Ochieng, 2021). Supplier development is the process of working with
suppliers on one-to-one basis to improve their performance to deliver quality materials that
go a long way to benefit the buying organization. CIPS has noted that supplier development
appreciates regular feedback of the supplier’s performance together with any customer
complaints. A suggestion was also made by CIPS that supplier tailored to the specific needs
of the buying organization. It was also pointed out that, supplier knowledge and technology
can be leveraged through supplier development to reduce cost and lower risk.
Supplier development undertakings also lead to superior partnerships between buyers and
their suppliers as well as ways to efficiently and effectively utilize capital by incorporating
“lean” practices. Eliminating the waste of resources across the entire supply chain helps in
making it lean” and “green (Shin, et al., 2021). Working in close partnership with suppliers,
50
to ensure that the labor force get at least the required minimum legal wage and are properly
remunerated for overtime hours is a basic obligation. A direct impact in compliance
enhancement can also be attained without raising the product cost through supporting
suppliers to advance their productivity and quality. In highly developed supplier development
practices, time and accurate information is vital to decision-making and eventually to
performance. As a result, sharing top secret information with suppliers is seen to correlate
positively with the firm's general business performance. Incorporating suppliers in the
product design course gives them the chance to work with purchasers to discover areas that
can most efficiently and effectively be undertaken, thus mounting purchasing performance.
Therefore, it should be anticipated that the execution of highly developed supplier
development would develop the supplier performance and/or capacities, and ultimately,
progress the buyer's purchasing performance.
Supplier development is, in simpler terms, about providing regular and continuous feedback
of the supplier’s performance as qualified by the buyer’s organization, jointly with any
client’s complaints. This feedback can frequently, in and of itself, provide a key inducement
for suppliers to check and advance their performance, mainly in areas such as delivery
consistency and lead times (Shonubi, 2020). This strategy can be further boosted by using the
expertise in the buying organization to expand the supplier’s capacities and hence augment
the total added quality in both products and services. Purchasing and supplies management
ought to also be receptive to the likelihood of taking up supplier know-how and aligning it to
the buyer’s business objectives and needs (Adesanya, et al., 2020). A further benefit of this
supplier development strategy is that the areas selected for improved performance or capacity
are customized to the particular needs of the buying organization, and this alignment makes
sure that the gains feed directly through into the buyers products and services, enabling them
to be even extra competitive in their own market place.
Supplier development is a strategy of working with particular providers on a balanced
premise to upgrade their execution and capacities with respect to the upside of the acquiring
affiliation (Wanjiru, 2022). Supplier development activities are described as the most
important effort that an organization undertakes to develop suppliers for long term
partnership and relationship enhancement and also to gain competitive advantage. According
to Pornchaiwisesk, (2020) supplier development is a cooperation that seeks continuous
improvement between a buyer and a supplier for superior performance of an organization
geared towards strengthening the buyer's competitive advantage. There are two objectives of
51
supplier development; to prevent suppliers from making immediate changes in their
operations and to increase their capabilities for improvement.
Supplier financial support
The ideas of financial and operating activities in the supply chain can be extended further by
defining two separate, but heavily interconnected, supply chains (EBA, 2014). The physical
supply chain (PSC) and the financial supply chain (FSC). Events in the FSC are generally
driven by triggers in the PSC. The PSC includes information, activities, people, organizations
and resources affecting the creation and transfer of a product or service from the supplier to
the buyer. Activities involves the value added operations that create finished products from
raw materials and the PSC is the underlying economic functions creating product value by
providing the right product at the right location in adequate time. Thus, financial activities are
necessary to compensate the different values added, and as a result, the FSC must support the
PSC activities. FSC is the management and transactions that facilitates purchase, sales, and
payment of products and services. It includes contractual frameworks such as general
purchase agreements, distribution of POs and invoices, the matching of goods, POs and
invoices etc.
As indicated by Lubale and Kioko (2022), provider budgetary help is the purchasers' exertion
towards its providers to persistently spot monetary shortcomings inside its supply base and
taking the important money related help to evade supply interruptions and increment provider
money related wellbeing in order to meet his present moment and long haul monetary
commitments. Money related help is a basic achievement factor in provider improvement and
provider execution. As indicated by Oromo and Mwangangi (2022), demonstrated money
related help gives the purchasing firm expanded provider rivalry in the worldwide market and
possibly diminishes transportation and other calculated expenses of providers. The present
effective purchasers can credit their accomplishment to their significant purchaser provider
relationship possible through purchasers' drive to help provider by means of specialized help,
budgetary help and through provider preparing so as to accomplish predominant execution
and shared addition for the two gatherings.
Budgetary venture can likewise allude to the purchasing association’s exertion to build up
their provider by participating in human and capital assets which incorporates direct interest
in gear and instruments and specialized help at the provider site (Mwesigwa & Nondi, 2018).
At the point when the provider gets assessment input from the purchasing association for
enhancements, the firm needs to give recommendations or work force to provider site
(Krause et al., 2020). Such activity of the purchasing firm persuades the immediate
52
contribution of their potential providers including budgetary assets (Wagner, 2016).
Arrangement of money related help might be stretched out to explicit providers who may
encounter monetary troubles to enable them to meet their budgetary commitments. This can
be as up-front instalments, credits, gear gifts and so forth which helps a provider in gaining
operational limit which they might not have been prepared to do. A provider who is
appropriately and sufficiently monetarily bolstered expands the purchasing association’s
capacity to convey high calibre and creative items to its clients and in this manner lessens
purchasers' operational dangers. Provider's budgetary help is basic in deciding the provider's
capacity to remain monetarily dissolvable (Wagner, 2016). Budgetary help improves
providers' ability and ability to adapt to the purchasers' necessity and in this manner
reinforces the providers' ability to meet asset prerequisites by the purchaser.
In this study, supplier development is operationalized to entail supplier financing. To manage
procurement costs in public universities, there is a need to relook at adoption of supplier
development. This study seeks to provide a link between supplier development and
procurement performance before providing a policy recommendation on the best supplier
development practices to be adopted. With the challenges facing procurement activities in the
public sector, and specifically public universities, it was hard to generalize the findings of
other studies to this sector, hence there was a need to fill this contextual scope by focusing on
the influence of supplier financing on procurement performance among public universities
with specific focus on public universities in Mombasa County.
As indicated by Choi (2018), provider budgetary help is the purchasers' exertion towards its
providers to persistently spot monetary shortcomings inside its supply base and taking the
important money related help to evade supply interruptions and increment provider money
related wellbeing in order to meet his present moment and long haul monetary commitments.
Money related help is a basic achievement factor in provider improvement and provider
execution. As indicated by Heidi and John (2017), demonstrated money related help gives the
purchasing firm expanded provider rivalry in the worldwide market and possibly diminishes
transportation and other calculated expenses of providers. The present effective purchasers
can credit their accomplishment to their significant purchaser provider relationship possible
through purchasers' drive to help provider by means of specialized help, budgetary help and
through provider preparing so as to accomplish predominant execution and shared addition
for the two gatherings. Budgetary venture can likewise allude to the purchasing association’s
exertion to build up their provider by participating in human and capital assets which
incorporates direct interest in gear and instruments and specialized help at the provider site
53
(Krause, et al., 2020). At the point when the provider gets assessment input from the
purchasing association for enhancements, the firm needs to give recommendations or work
force to provider site (Krause et al., 2000; Prahinski and Benton, 2018). Such activity of the
purchasing firm persuades the immediate contribution of their potential providers including
budgetary assets (Wagner, 2021).
be as up-front instalments, credits, gear gifts and so forth which help a provider in gaining
reinforces the providers' ability to meet asset prerequisites by the purchaser. Based on the
above review of literature, this paper set to analyse effect of supplier financing on
procurement performance among public universities with specific focus on public
universities.
54
In addition, performance appraisal is often carried out in Stanbic Bank Uganda Limited as
revealed by the results though this was not statistically significant with Value for money.
2.3.2. Supplier development and Value for Money

Supplier Development
Supplier training
Supplier development is any effort a buying firm expends on a supplier to increase the
performance and capabilities of the supplier to meet the buying firm’s own short-term or long
term supply needs (Ochieng, 2021). Supplier development is any effort or attempt by a
buying firm, that is the manufacturer with its supplier to enhance the performance and/or
capabilities of the supplier and in that way meet the manufacturers supply needs and
specifications (Ochieng, 2021). Supplier development is the process of working with
suppliers on one-to-one basis to improve their performance to deliver quality materials that
go a long way to benefit the buying organization. CIPS has noted that supplier development
appreciates regular feedback of the supplier’s performance together with any customer
complaints. A suggestion was also made by CIPS that supplier tailored to the specific needs
55
of the buying organization. It was also pointed out that, supplier knowledge and technology
can be leveraged through supplier development to reduce cost and lower risk.
Supplier development undertakings also lead to superior partnerships between buyers and
their suppliers as well as ways to efficiently and effectively utilize capital by incorporating
“lean” practices. Eliminating the waste of resources across the entire supply chain helps in
making it lean” and “green (Shin, et al., 2021). Working in close partnership with suppliers,
to ensure that the labor force get at least the required minimum legal wage and are properly
remunerated for overtime hours is a basic obligation. A direct impact in compliance
enhancement can also be attained without raising the product cost through supporting
suppliers to advance their productivity and quality. In highly developed supplier development
practices, time and accurate information is vital to decision-making and eventually to
performance. As a result, sharing top secret information with suppliers is seen to correlate
positively with the firm's general business performance. Incorporating suppliers in the
product design course gives them the chance to work with purchasers to discover areas that
can most efficiently and effectively be undertaken, thus mounting purchasing performance.
Therefore, it should be anticipated that the execution of highly developed supplier
development would develop the supplier performance and/or capacities, and ultimately,
progress the buyer's purchasing performance.
Supplier development is, in simpler terms, about providing regular and continuous feedback
of the supplier’s performance as qualified by the buyer’s organization, jointly with any
client’s complaints. This feedback can frequently, in and of itself, provide a key inducement
for suppliers to check and advance their performance, mainly in areas such as delivery
consistency and lead times (Shonubi, 2020). This strategy can be further boosted by using the
expertise in the buying organization to expand the supplier’s capacities and hence augment
the total added quality in both products and services. Purchasing and supplies management
ought to also be receptive to the likelihood of taking up supplier know-how and aligning it to
the buyer’s business objectives and needs (Adesanya, et al., 2020). A further benefit of this
supplier development strategy is that the areas selected for improved performance or capacity
are customized to the particular needs of the buying organization, and this alignment makes
sure that the gains feed directly through into the buyers products and services, enabling them
to be even extra competitive in their own market place.
Supplier development is a strategy of working with particular providers on a balanced
premise to upgrade their execution and capacities with respect to the upside of the acquiring
affiliation (Wanjiru, 2022). Supplier development activities are described as the most
56
important effort that an organization undertakes to develop suppliers for long term
partnership and relationship enhancement and also to gain competitive advantage. According
to Pornchaiwisesk, (2020) supplier development is a cooperation that seeks continuous
improvement between a buyer and a supplier for superior performance of an organization
geared towards strengthening the buyer's competitive advantage. There are two objectives of
supplier development; to prevent suppliers from making immediate changes in their
operations and to increase their capabilities for improvement.
Supplier financial support
The ideas of financial and operating activities in the supply chain can be extended further by
defining two separate, but heavily interconnected, supply chains (Mwagike
& Changalima, 2022EBA, 2014). The physical supply chain (PSC) and the financial supply
chain (FSC). Events in the FSC are generally driven by triggers in the PSC. The PSC includes
information, activities, people, organizations and resources affecting the creation and transfer
of a product or service from the supplier to the buyer. Activities involves the value added
operations that create finished products from raw materials and the PSC is the underlying
economic functions creating product value by providing the right product at the right location
in adequate time. Thus, financial activities are necessary to compensate the different values
added, and as a result, the FSC must support the PSC activities. FSC is the management and
transactions that facilitates purchase, sales, and payment of products and services. It includes
contractual frameworks such as general purchase agreements, distribution of POs and
invoices, the matching of goods, POs and invoices etc.
As indicated by Lubale and Kioko (2022), provider budgetary help is the purchasers' exertion
towards its providers to persistently spot monetary shortcomings inside its supply base and
taking the important money related help to evade supply interruptions and increment provider
money related wellbeing in order to meet his present moment and long haul monetary
commitments. Money related help is a basic achievement factor in provider improvement and
provider execution. As indicated by Oromo and Mwangangi (2022), demonstrated money
related help gives the purchasing firm expanded provider rivalry in the worldwide market and
possibly diminishes transportation and other calculated expenses of providers. The present
effective purchasers can credit their accomplishment to their significant purchaser provider
relationship possible through purchasers' drive to help provider by means of specialized help,
budgetary help and through provider preparing so as to accomplish predominant execution
and shared addition for the two gatherings.
57
Budgetary venture can likewise allude to the purchasing association’s exertion to build up
their provider by participating in human and capital assets which incorporates direct interest
in gear and instruments and specialized help at the provider site (Mwesigwa & Nondi, 2018).
At the point when the provider gets assessment input from the purchasing association for
enhancements, the firm needs to give recommendations or work force to provider site
(Krause et al., 2020). Such activity of the purchasing firm persuades the immediate
contribution of their potential providers including budgetary assets (Mwagike
& Changalima, 2022Wagner, 2016). Arrangement of money related help might be stretched
out to explicit providers who may encounter monetary troubles to enable them to meet their
budgetary commitments. This can be as up-front instalments, credits, gear gifts and so forth
which helps a provider in gaining operational limit which they might not have been prepared
to do. A provider who is appropriately and sufficiently monetarily bolstered expands the
purchasing association’s capacity to convey high calibre and creative items to its clients and
in this manner lessens purchasers' operational dangers. Provider's budgetary help is basic in
deciding the provider's capacity to remain monetarily dissolvable (Wagner, 2016). Budgetary
help improves providers' ability and ability to adapt to the purchasers' necessity and in this
manner reinforces the providers' ability to meet asset prerequisites by the purchaser.
In this study, supplier development is operationalized to entail supplier financing. To manage
procurement costs in public universities, there is a need to relook at adoption of supplier
development. This study seeks to provide a link between supplier development and
procurement performance before providing a policy recommendation on the best supplier
development practices to be adopted. With the challenges facing procurement activities in the
public sector, and specifically public universities, it was hard to generalize the findings of
other studies to this sector, hence there was a need to fill this contextual scope by focusing on
the influence of supplier financing on procurement performance among public universities
with specific focus on public universities in Mombasa County.
As indicated by Choi (2018), provider budgetary help is the purchasers' exertion towards its
providers to persistently spot monetary shortcomings inside its supply base and taking the
important money related help to evade supply interruptions and increment provider money
related wellbeing in order to meet his present moment and long haul monetary commitments.
Money related help is a basic achievement factor in provider improvement and provider
execution. As indicated by Heidi and John (2017), demonstrated money related help gives the
purchasing firm expanded provider rivalry in the worldwide market and possibly diminishes
transportation and other calculated expenses of providers. The present effective purchasers
58
can credit their accomplishment to their significant purchaser provider relationship possible
through purchasers' drive to help provider by means of specialized help, budgetary help and
through provider preparing so as to accomplish predominant execution and shared addition
for the two gatherings. Budgetary venture can likewise allude to the purchasing association’s
exertion to build up their provider by participating in human and capital assets which
incorporates direct interest in gear and instruments and specialized help at the provider site
(Krause, et al., 2020). At the point when the provider gets assessment input from the
purchasing association for enhancements, the firm needs to give recommendations or work
force to provider site (Changalima, Ismail, & Mchopa, 2021Krause et al., 2000; Prahinski and
Benton, 2018). Such activity of the purchasing firm persuades the immediate contribution of
their potential providers including budgetary assets (Wagner, 2021).
be as up-front instalments, credits, gear gifts and so forth which help a provider in gaining
reinforces the providers' ability to meet asset prerequisites by the purchaser. Based on the
above review of literature, this paper set to analyse effect of supplier financing on
procurement performance among public universities with specific focus on public
universities.
Supply company managers make sure to train suppliers who have positive work experience to
decision making hence motivating the min results increasing firm performance. The
managers make sure they provide the staff with motivation programs, promotion programs
and good supplier programs (Bai & Satir, 2020). Further, the buyer may send his suppliers or
59
group of team to train supplier or he may invite group of suppliers facing same problem for
training in his own firm. Therefore, training suppliers is a very important tool in increasing
supplier base since it increases supplier competency and the opportunities to enhance value
for money. Masinde and Osoro (2019) found that supplier development programs support the
development of a supplier’s capabilities usually with the assistance of a buyer. Supplier
development also depends on supplier’s interest and how they explore them self to increase
their capabilities to provide value for money. Thus, it is important that suppliers looking to
develop their capabilities have access to the type of training that they require which may or
may not be provided by their buyers. For suppliers that have access to buyer-supported
training their training needs might often change as they develop their own capabilities
(Matto, 2022).
Supplier development is concerned with assisting the actual and potential suppliers produce
and supply high quality inputs to their prospective clients. Suppliers help organizations to
meeting their present and future requirements, since no organization is capable of satisfying
all its supplies requirements from its internal sources (Changalima, Ismail, & Mchopa,
2021). In most cases it involves large organizations extending a helping hand in form of
resources to small vendors/small suppliers who have demonstrated willingness to meet their
purchaser’s requirements. It therefore involves looking at the various strengths and weakness
of a supplier who is willing to supply you with the materials/services and helping them
overcome these weaknesses so that they can serve you in a more efficient way. Analyzing
value for money in performance management of suppliers, price, quality, and time to market
immediacy, product credibility, service reliability, support capability, research and
development power, purchase specialty, value analysis, value engineering and e-commerce
(Mwagike & Changalima, 2022).
Traditionally, the role of supplier in contributing to the value for money of the buyer has
never been accorded strategic importance. This has been due to the simple reason that the
inter-organizational linkages between the buyers and sellers has been of arm’s length and
often adversarial with individual firms in the supply chain seeking to achieve cost reduction,
profitability and growth at the expense of each other (Araz, & Ozkarahan, 2017). However,
researchers, such as Sikombe and Phiri (2021) stated that successful buyers recognize the role
of working closer with their suppliers plays with regards to inventory management and
handling, demand management, purchasing processing management, and achievement of
success in the face of industry competition and increasing material scarcity in the global
arena for ensuring high levels of economy, efficiency and effectiveness.
60
Ismail et al (2022) the notion of achieving effective value for money due to investments in
supplier development is not of complete novelty. Effective supply chain performance of any
firm can only be achieved if there is a cordial buyer-supplier relationship focusing on the
antecedents trust and commitment, communication quality, information sharing and
involvement as well as feedback. To address the challenges of relational assets assignment
that buyers face, they apply a number of strategies to identify, evaluate and select suppliers
with the aim of supplier base reduction, selection of key suppliers for consideration for
process and product development improvements and investments and to advance buyer-
supplier collaborative relationships (Sikombe and Phiri (2021).
Suppliers’ need competent technical ability to provide high quality product or service, ensure
future a rise in performance and promote successful development efforts. This is very
important when the firm’s strategy included the development of a new product or technology
or access to proprietary technology (Ismail et al., 2022). These technical criteria insist
company to shift into the global market place. This factor has been measured on the basis of
the importance of the following technical areas: compliance with quantity, compliance with
due date, compliance with packaging standard, and production planning systems of suppliers,
maintenance activities of suppliers and plant layout and material. The potential production
capability of each supplier should be analysed to meet a specified Production plan and also to
develop a new product according to the market demand. Therefore the production facilities
and ability of the supplier to improve its capacity should also be taken into account in order
to Judge the best one (Das & Buddress, 2017). Financial support refers to the buying firm's
effort to develop its suppliers by engaging in human and capital resources which include
technical support, direct investment in equipment and tools (Mukucha & Chari, 2021). Buyer
organizations are supposed to communicate with the suppliers they want to develop for
information on their willingness. When the supplier gets evaluation feedback from the buying
firm for improvements, the firm needs to provide suggestions or personnel to the supplier
site. Such actions of the buying firm motivate direct involvement of potential suppliers
including financial resources (van der Westhuizen & Ntshingila, 2020).
61
2.4 Value for Money
VFM does not mean a tender must be awarded to the lowest tenderer thus not about
achieving the lowest initial price but the optimum combination of whole life costing and
quality (Nsiah-Asare and Prempeh, 2016). Value for money is based not only on the
acquisition price/cost (economy) but also on the maximum efficiency and effectiveness
of a procurement transaction. Uyarra and Flanagan (2015) stress that an efficient
operation produces the maximum output for any given set of resource inputs; or, it has
a minimum input for any given quantity and quality of services provided.
Value for money (VfM) is defined as the optimum combination of whole of life costs and
quality of the good or service to meet the user’s requirement (Moralles et al. 2015).
Value for money (VFM) is not about achieving the lowest price. It is about achieving the
optimum combination of whole life costs and quality. Traditionally VfM was thought of
as getting the right quality, in the right quantity, at the right time, from the right
supplier at the right price. This concept has been updated to obtaining better quality of
goods or services in more suitable quantities, just in time when needed, from better
suppliers at prices that continue to improve (World Bank Report, 2013).
Value for money is derived from the optimal balance of benefits and costs on the basis
of total cost of ownership. As such, value for money does not necessarily mean that a
tender must be awarded to the lowest tenderer (Civil Service College, 2010). Value for
money is a term generally used to describe an explicit commitment to ensuring the best
results possible are obtained from the money spent. In the UK Government, use of this
term reflects a concern for more transparency and accountability in spending public
funds, and for obtaining the maximum benefit from the resources available (Barnett et
al. 2010).
Value for money in public procurement is achieved through pursuing the lowest whole
of life cost, clearly defining relevant benefits and delivering on time. Preventing waste
and fostering competition, transparency and accountability during the tendering
process are key conditions to achieving value for money. Value for Money refers to a
judicious, economic and efficient use of state resources at a reasonable cost. Value for
money is not about achieving the lowest initial price: it is defined as the optimum
combination of whole life costs and quality (Lorenzoni, Let al., 2018).
62
According to Leigh-Hunt, et al., (2018), value for money is often used to express the
satisfaction of the cost of a service of a given quality. As value for money is often
equated with reducing costs, organisations can believe that they are achieving value for
money if they are paying less for a given service compared to last year. However, even
though cost is easier to measure, Leigh-Hunt, et al., (2018) stress that value for money is
about quality of a service and the effectiveness of how it is delivered. Therefore, they
claim that organisations, in order to achieve value for money, should set both cost and
quality objectives and only prioritise cost where financial constraints are severe.
According to Ariste and Di Matteo, (2017), value for Money in the public sector involves
consideration of the contribution to be made to advancing government policies and
priorities while achieving the best return and performance for the money being spent.
This means that public procurement entities can choose to award a contract based on
other criteria other than the lowest price. One of the factors considered is the whole life
cycle cost (Raymond, 2008). All public procurement of goods, works and services, must
be based on Value for Money assessment, having due regard to propriety and
regularity.
2.5 Summary of literature review
Studies have been done on Supplier Relationship Management and Value for Money.
For example, Nshimyumuremyi (2018) conducted a study on the Procurement Planning
and Value For Money, Changalima (2016) conducted a study on the determinants of
Value For Money in the procurement of works in the Public Sector, Mchopa et al (2014)
conducted a study on contracts management and Value For Money and Nsiah-Asare
and Prempeh (2016) conducted a study on the measures of ensuring Value for Money.
However, none of the above-mentioned studies have looked at the contribution of
Supplier Relationship Management in the achievement of Value for Money. In addition,
no study has been conducted in the private sector of Uganda, specifically the banks on
how Supplier Relationship Management promotes Value for Money hence presenting a
consent or knowledge gap that this study has covered.
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DATA
This trend makes the importance of objective evaluation of supplier performance higher since
a long-term supplier strategy is not only important for an organization’s development and
profitability but is also a crucial part of the overall business strategy (Nordling et al., 2010).
Appraisal
Hashi Energy uses data to evaluate and compare performance of new suppliers, and for
continuous improvement, and appraisal on a two-way basis can highlight the buyer's
deficiencies, which is the source of common problems within many supplier relationships.
64
Arsan (2011) observed that desk appraisal is one of the widely used methods in appraising
suppliers. This involves use of published and unpublished information already in existence
and is particularly applicable to product and financial appraisal. Secondary data applicable
include catalogues, product data sheet furnished by the supplier. This leads to investigation
on specific factor. It helps to appraise the accuracy and veracity of the answers provided by
potential suppliers.
Monitoring and evaluation
According to Handfield et al., (2008) an important part of evaluation processes touches on a
supplier’s quality management systems and philosophy. It should be noted that the success of
the buying organization is highly dependent on how well the suppliers perform. It is also
important that the supplier and the buyer have the same idea of what satisfactory quality is.
CHAPTER THREE
METHODOLOGY
3.1 Introduction
This chapter presents and describes the approaches and techniques the researcher used
to collect data and investigate the research problem. This includes research design,
study population, sample size and selection, sampling techniques and procedure, data
collection method, data collection instruments, data quality control (validity and
reliability), procedure of data collection, data analysis and measurement of variables
and ethical considerations.
3.2 Research design
The study used a cross sectional survey design. A cross-sectional survey is suitable for
such a study to collect information at a one point in time, rather than from a given
period of time. While using the cross-sectional design, the researcher will apply both
qualitative and quantitative approaches to collect detailed facts Žukauskas et al (2018).
By using the quantitative approach, the researcher will describe numerical data,
statistics and statistical inferences which are to focus on relationships between variables,
which will assume a sample to be representative of the population and used statistics to
generalise findings (Sileyew, 2020) while qualitative approach helped in collating
65
narrative and descriptive facts, to make a deeper exploration on how supplier
relationship management contributes to value for money in procurement in commercial
banks in Uganda with a case study of Stanbic Bank Uganda Limited.
3.3 Study Population
According to Stratton (2021), a population is a complete set of the entire group or
individuals with a common observable characteristic. The study population targeted
110 respondents made up of officers and managers of different departments that play a
role in the day to day running of the business at the head office and among whose roles
is to ensure Value for Money. These include officers in the finance and administration
department, operations unit of the bank. The administration department primarily
deals with procurement and disposal, as well as asset management issues of the bank.
3.4 Sample Size
This refers to the number of items being selected from the universe to constitute a
sample (Kothari, 2019). The sample size of the population in this study is obtained using
the Morgan and Krejcie as illustrated in the 3.1 below:
Table 3.1: sample size determination
Category Population (N) Sample size (n) Sampling technique
Heads of departments 15 14 Purposive sampling
Managers 5 5 Purposive sampling
Finance and 950 7344 Simple random sampling
Administration staff
Operations’ department 40 36 Simple random sampling
staff
Total 11010 909

Source: (Stanbic Bank HR Department, 2021)
3.5 Sampling Techniques and procedures
3.5.1 Simple Random Sampling
Simple random sampling is a type of probability sampling in which the researcher
randomly selects a subset of participants from a population. It makes sure that every
person in a population has an equal probability of being chosen as a respondent
(Thomas, 2020). It is embraced because it helps a scientist to efficiently pick a more
modest gathering of delegate items or individuals (a subset) from a pre-characterized
populationce to go about as subjects (information hotspots) for perception or trial and
66
error as per the objectives of their study (Golzar, 2022). The justification for adopting
this technique was that it helped to minimize bias and increased the generalizability of
the study findings. When done correctly, it ensures that your sample is representative of
the larger population, making it more likely that your research results can be applied to
the population as a whole.
Simple random sampling is a type of probability sampling in which the researcher randomly
selects a subset of participants from a population. Each member of the population has an
equal chance of being selected. Data is then collected from as large a percentage as possible
of this random subset. This sampling technique was used because it ensures that every
member has an equal chance of being recruited into the sample and also eliminates bias in
data collection (Thomas, 2020). The study used simple random sampling to select finance
and administration staff and operations’ department staff. Through use of this technique,
finance and administration staffs and operations’ department staff were used as study
population from which a small sample shall be drawn.
3.5.2 Purposive Sampling
Purposive sampling, also known as judgmental, selective, or subjective sampling in

which researchers rely on their own judgment when choosing members of the
population to participate in their surveys (Nikolopoulou, 2022). In purposive
sampling, the researcher set out to identify members of the population who were likely
to possess certain characteristics or experiences about the study variables. This
technique was considered since it is less costly and saves time; it enabled the researcher
to acquire an in-depth understanding of the problem and to gain richer, useful and
focused information (Thomas, 2020). Purposive sampling was used to select managers
and heads of departments.
3.6 Data Collection Methods
Quantitative and qualitative methods were utilized to collect primary data. The study
used both primary and secondary sources of data collection. Quantitative and
qualitative methods were utilized to collect primary data (Taylor, 2021). Self-
67
administered questionnaires supportedquestionnaires supported the collection of primary
data.
3.6.1. Questionnaire Survey
This study adopted a questionnaire survey method. The primary goal of a questionnaire
survey was to gather information, opinions, or attitudes from the representative sample
selected to participate in the study (Taherdoost, 2022). The questionnaire was closed-
ended providing a list of predefined response options from which the participants had
to select responses that suited their opinion about the set statements. The questionnaire
was administered to the selected respondents through paper surveys. With the
assistance of research assistants, questionnaires with closed-ended questions were
distributed to finance and administration staff membersrespondents. This was utilized to
get their perspectives comparable to the study's peculiarities (Mutepf, 2019;
Linderman, 2023). The justification for using this method was; that firstly, it was cost-
effective for collecting data from a large number of respondents. Secondly, the
standardized questions allowed for easy comparisons and analysis. Thirdly, anonymity
encouraged honest responses on sensitive topics.
3.6.2 Interview Method
An interview method in research refers to a systematic approach used by researchers to

collect information from participants by asking them questions in a structured or semi-
structured manner (Sileyew, 2019). This method was adopted to gather in-depth
insights, opinions, experiences, and perspectives from the selected participants. The
setting for the interviews was face-to-face to answer the research question (Young et al.,
2018; Ethami, et al.,2022, 2022). The key informants who were Executive Committee
MembersManagers and heads of departments were the subject of interviews. This method
aimed to delve deeply into a participant's thoughts, feelings, experiences, and
perspectives about the contribution of effect of supplier relationship management on Value
for Money in procurement in commercial banks in Uganda with a case study of Stanbic Bank
Uganda Limited.strategic physical planning to road infrastructure provision in Mukono
Municipality.
68
3.7. Data collection instruments
Questionnaires and interview guide was used as the major tools for this study
3.7.1 Questionnaire
According to Muhammad and Kabir (2018), a questionnaire is a method of survey data
collection in which information is gathered through oral or written questionnaires. The
questionnaires were self-administered to the Councilors on the Sectoral committee and the
Technical team of the councilFinance and administration staff members to obtain the
required information for the study. The questionnaires were adopted since they are
easier to administer, less costly, and timely and they allow the aspect of confidentiality
(Budianto, 2020). The researcher designed the questionnaire with sub-sections to
include; demographic characteristics, strategic physical planningsupplier relationship
(management (IV): supplier performance management,Strategy planning, Tactical planning,
supplier developmentOperational planning , and Road infrastructure provisionValue for
(money (DV). The questionnaire generated data for objectives one, two, and three (see
Chapter One, specific objectives).
3.7.2 Interview guide
An interview guide is an alternative tool of data collection whereby researchers collect
data through direct verbal interaction while recording respondents’ answers using an
interview guide to supplement other data collection methods (Budianto, 2020). Key
informants, such as Managers and heads of departmentsmembers of the executive
committee and members of the executive committee, who are knowledgeable about the
study problem, were interviewed. It enabled the researcher to gather comprehensive
qualitative data on the phenomenon under investigation,investigation; this approach was
taken into consideration. This allowed for more in-depth analysis and provides more
relevant information that could not have been obtained through the questionnaires
69
(Wang, 2018). The researcher used the interview guide to have a professional
conversation with the respondents to get complete explanations of how they perceived
the study phenomena.
3.8 Quality control of data

Data quality techniques ensured that data collected was valid and reliable; the
instruments were tested to ensure validity and reliability.
3.8.1 Validity of instruments
The validity of a research instrument refers to the extent to which the instrument (such
as a questionnaire) accurately measures what it intends to measure (Kothari, 2008;
Mugenda & Mugenda, 2003). In other words, it assesses whether the instrument is
measuring the specific construct or concept it claims to measure and whether the results
obtained from the instrument are genuinely reflective of the underlying phenomenon
Chetwynd (2022). The researcher adopted Yusoff’s six steps to quantify the Content
Validity of the questionnaire as illustrated in Figure 3 below.
Step 1. Step 2. Step 3.

Prepare content Select review Conduct content
validation form panel validation
Step 4.
Step 6. Step 5.
Review domain
Calculate CVI Score each item
and items
Figure 3.2: Content Validation Procedure.

Source: Yusoff 2019
Procedure to perform content validity in research:
The research defined the constructs or variables that had to be measured within the
questionnaire (Yusoff, 2019). This was followed by reviewing the relevant literature to
understand the key concepts, variables, and dimensions related to the study “supplier
relationship management and Value for Money in procurement in commercial banks in
Uganda”, to identify the important aspects to be reflected in the questionnaire. Based on
the literature reviewed, and construct definition, the researcher generated a pool of
70
potential items or questions that could be included in the questionnaire. These items
were diverse and covered various aspects of strategy planning, Tactical planning, and
operational planning.
Thereafter, the researcher sought input from two experts in the subject matter. These
experts helped to evaluate the relevance and clarity of each item in the questionnaire.
They can also suggest additional important items. The Content Validity Index (CVI)
was adapted to calculate the validity of the questionnaire (Yusosff, 2019).
a.) Item-CVI: This method assesses the content validity of each item in the
questionnaire. Experts rate each item for relevance on a scale (for example, 1 to 4 or 1
to 5), where higher ratings indicate greater relevance. Calculate the Item-CVI for each
item by dividing the number of experts who rated it as relevant by the total number of
experts. An Item-CVI score of 0.80 or higher is often considered acceptable.
b.) Scale-CVI: If the questionnaire consists of multiple items that are meant to measure
the same construct (e.g., a Likert scale), calculate the Scale-CVI to assess the overall
content validity of the scale. This is typically done by averaging the Item-CVI scores for
all items within the scale.
The study adapted Scale-CVI.
Before conducting your main study, the questionnaire that was validated was tested
through a pilot study on a small sample to identify any potential issues with wording,
comprehension, or item difficulty. The researcher finalized the questionnaire by making
necessary revisions based on the pilot test results.
CVI = Number of items considered relevant
Total number of items.
CVI = No. of items rated relevant
Total no. of items
The CVI is computed using the following formula
Table 3.2: Results of content validity for research tools
Dimensions No of Items Relevant CVI
Supplier performance 08 06 0.75
management
Supplier development 07 07 1
Value for Money in 08 07 0.875
procurement
71
Source: Primary Data (2023)
Table 3.2 presents averages of 0.875 and (0.75, 1 & 0.875 respectively) on all three
variables had a CVIs that were above 0.7, imply that the tool was validity since it was
appropriately answering / measuring the objectives and conceptualization of the study.
According to Mugenda & Mugenda (2003), the tool can be considered valid where the
CVI value is 0.7 and above as is the case for all the four variables provided above.
3.8.2 Reliability of instruments
The reliability of a questionnaire refers to its ability to yield the same data when it is re-
administered under the same conditions (Learnovate, 2022; Hassan, 2023). Reliability
for quantitative research ensures that the results obtained are not just due to random
fluctuations or measurement errors. It helps researchers ensure that the data they
collect are consistent and can be used to make valid inferences about the underlying
construct of interest. To assess the reliability or internal consistency of a set of items in a
questionnaire or a test, the Indeed Editorial Team (2023) proposed doing a stability test
using the test-retest method on a 10% population with similar characteristics to the
study population small population during the pilot study. Cronbach’s alpha reliability
coefficient was computed.
Cronbach's alpha ranges from 0 to 1, where; If alpha is close to 1, it indicates high
internal consistency, meaning that the items in the scale are measuring the same
construct consistently. If alpha is close to 0, it suggests low internal consistency,
meaning that the items in the scale are not measuring the same construct consistently. A
threshold of 0.7 and above was considered reliable (Scribbr, 2019; Hair, et al., 2019).
The administration of the tools was carried out on two occasions within two weeks with
the respondents from Stanbic Bank Uganda Limited. An average Cronbach Alpha of
0.823 was obtained as illustrated in Table 3.3 below.
Table 3.3: Reliability test results of research instruments.

Study variables Cronbach’s Alpha
Supplier performance management 0.745
Supplier development 0.986
Value for Money in procurement 0.876
Average Cronbach Alpha coefficient for variables 0.843
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The reliability of instruments was established using Cronbach Alpha Coefficient which
tests internal reliability and the average reliability test result for research was 0.84
which is recommended as given table 3.3 above.
3.9 Data collection procedure
A letter of recommendation from the Uganda Management Institute (UMI) to Stanbic
Bank Uganda Limited was obtained. After successful defences, the researcher
guaranteed respondents the confidentiality of their data. Respondents were given time
to complete the study questionnaire. The data collection process involved two main
activities: collecting data and displaying data. Data was collected by the researcher
using questionnaires and interviews. Questionnaires are preferred by researchers
because they are inexpensive to manage, can be filled out as the respondents like, and
can quickly collect information from multiple respondents.
Face-to-face interviews are a more personal form of study, as interviewers worked
directly with respondents and interviewers asked follow-up questions, especially
because it was generally easier for respondents.
3.10. Data Analysis Technique
Data was analysed both quantitatively and qualitatively.
3.10.1 Quantitative data analysis
Quantitative data analysis, which calls for employing both descriptive and inferential
statistics, was carried out using the Statistical Package for Social Scientists (SPSS).
Descriptive statistics describe the characteristics of a data set. Descriptive statistics were
computed using frequency distributions, mean, and standard deviation. Inferential
statistics focused on making predictions about the contribution of Strategic physical
planningSupplier relationship management to the road infrastructure provisionvalue for
money . The data was presented in comprehensive tables displaying the responses to
each category of variables after being edited, coded, and entered. This was done using
regression analysis showing the effect independent variables and a dependent variable
(Marsh et al, 2020).
3.10.2 Qualitative data analysis
The term "qualitative analysis" was coined by Borgstede and Scholz (2021) to describe
a method that "provides insights and understanding of the problem setting." Narrative
analysis of qualitative data was consolidated given how the outcomes connect with the
exploration questions. The researcher collected data from a collection of written, oral,
or visual texts (such as books, papers, magazines, talks, and meetings) to identify
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patterns in written correspondence to conduct Narrative analysis (Marsh, et, al., 2020;
Luo, 2022).
3.11 Measurement of variables

The background ground characteristics variables identifying the respondents were
measured using the nominal scale with appropriate options given. The nominal scale
helps label or tag to identify objects, properties, or events. Independent and dependent
variables namely Supplier Performance Management and supplier development was
measured on the ordinal scale which is a ranking scale and possess the characteristic of
order. The scale helped to distinguish between objects according to a single attribute
and direction (Smith & Albaum, 2013). The ranking was based on the five-point Likert
scale (Where 1 = strongly disagree 2 = disagree 3 = undecided 4 = agree 5 = strongly
agree).
3.12 Ethical Considerations
Morals in research allude to the standards that recognize satisfactory and
unsatisfactory ways of behaving (Cammaerts, 2020). The researcher was aware of the
significance of ethics in this study, which prioritized honesty, integrity, and attribution.
Confidentiality and privacy: It refers to the obligation of an individual or organization
to safeguard entrusted information. The research participant’s privacy was assured by
the researcher, who kept all the information safely locked up during the research
process.
To ensure privacy, the respondents were informed that indeed their names were
required, that they have the right to leave questions unanswered for which they do not
wish to offer the requisite information, and that the study could not put the respondent
under pressure if this happens.
Informed Consent: The researcher sought informed consent before conducting the data
collection process. Informed consent for research requires that the respondents or
subject must be competent to understand and decide, receive full disclosure,
comprehend the disclosure, act voluntarily, and consent to the proposed action to which
this study adhered.
Plagiarism: presenting someone else's work or ideas as your own, with or without their
consent by incorporating it into your work without full acknowledgment. All published
and unpublished material, whether in manuscript, printed, or electronic form, is
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covered under this definition. This was minimized by paraphrasing, citing, quoting,
citing quotes, citing own material, and referencing.
Voluntary participation: The research participants were informed that their
participation in the study was not to be rewarded in any way; it was entirely voluntary.
All the research participants were informed of their rights to refuse to be interviewed or
to withdraw at any point for any reason, without any prejudice or explanation.
CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS
4.1 Introduction
This chapter presents analyses and interprets results. The findings are presented
according to the objectives of the study. The study examined the effect of Supplier
Relationship Management on Value for Money in procurement in commercial banks in
Uganda with a case study of Stanbic Bank Uganda Limited. The objectives of the study
were to examine the effect of Supplier Performance Management on Value for Money
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at Stanbic Bank Uganda Limited and to examine the effect of Supplier Development on
Value for Money in Stanbic Bank Uganda Limited.
4.2 Response Rate
The response rate of the study is presented in Table 4.4 below
Table 4.4: Response rate
Instrument Target Actual Response Response rate
Questionnaire 7380 68 9385
Interview 19 15 79
Targeted 9299 83 9083
Source Primary data (2023)
From Table 4.4 above, out of the 7380 distributed questionnaires, 68 were returned
correctly filled representing 9379%. Out of the 19 respondents that were targeted for
interviews, 15 were interviewed implying a response rate of 79%. The overall response
rate, therefore was 9083%. This response rate was deemed well enough since it was
over and above the 50% recommended by Amin (2005).
4.3 Findings on background information of the respondent

The demographic characteristics (education level, sex, among others) for the 68
respondents were examined and findings are presented in the next subsection.
4.3.1 Sex of the respondents
The sex characteristics of respondents were investigated for this study, and findings are
presented the Table 4.5 below.
Table 4.5: Sex of the respondents

Category Frequency Percent
Male 50 74
Female 16 26
Total 68 100
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From Table 4.5 above, the majority of the respondents were male 74% and females
were 26%. The study was representative of both sexes. The implication of this finding
was that no matter the disparity in percentage of males and females who attended the
study, at least views of both males and females were captured which is too vital in
making a critical analysis on the effect of Supplier Relationship Management on Value
for Money in procurement in commercial banks.
4.3.2 Age of the respondents
The study looked at the distribution of the respondents by age using frequency
distribution. The results obtained on the item are presented in Figure 4.3 below.
50
45
40
35
30
25
20
15
10
5
0
18-25 years 26-30yrs 31-35yrs 36-40 years 41 years and
above

Figure 4.3: Age of the respondents
From the Figure 4.2 above, it was revealed that the majority of respondents were
between 31-35 years implying 44%, 15% were between 26-30 years, those between 41
years and above were 22% respectively. This indicated that all categories of
respondents in reference to different age groups were represented in this study. This
implies that all categories of respondents in reference to different age groups were
represented in this study and mature enough to respond to questions asked.
4.3.3 Education level of respondents
By examining the highest educational qualifications of the study respondents, the
researcher wished to ascertain whether there were substantial differences in the
responses as indicated in the Figure 4.3 below.
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PHD Diploma
7% 7%
Masters
23%
Degree
63%

Figure 4.4: Highest Level of Education
The findings from Figure 4.3 above indicate that majority of the respondents were
degree holders making a total percentage of 63%, the respondents with masters were
23%, those with diplomas were 12%, and PhD respectively. This implies that the
respondents had good academic qualifications with the right skills and knowledge to
deliver. Besides, the respondents were able to understand, read, interpret the
questionnaire and gave relevant responses to the questions asked.
4.3.4 Years of service in the organization
By examining the years of service in the organization by respondents, the researcher
wished to ascertain whether there were substantial differences in the responses as
indicated in the Figure 4.4 below.
78
10 years and
above
7-9 years
4-6 years
1-3years
0 10 20 30 40 50 60 70

Figure 4.5: Years of service in the organization
From the Figure 4.4 above, it indicate that majority of the respondents 68% had
worked for 4-6 years, 13% had worked for 1-3years, 16% of the respondents had
worked for 7-9 years and 06% of the respondents had worked for more than 10 years.
This meant that majority of the respondents had a working experience of 3 years and
above, thereby having enough knowledge to provide relevant information about
supplier relationship management and value for money in procurement in commercial
banks.
4.4 Empirical findings
This section presents the empirical findings of the study according to the objectives. The
empirical findings are analyzed using descriptive statistics, qualitative analysis and
testing hypotheses for the respective findings.
4.4.1 Value for Money at Stanbic Bank Uganda Limited
The items on Value for Money at Stanbic Bank Uganda Limited were structured basing
on the objective of the study. Items were measured on a five-point Likert scale where
code 1 = strongly Disagree, 2 = Disagree, 3 = Not sure, 4 = Agree and 5 = strongly Agree.
Seven (7) Items which are statistically tabulated and presented in the table below with
the frequencies and percentages according to the responses collected.
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Table 4.6: Value for Money at Stanbic Bank Uganda Limited
Item Responses Frequency Percent
The prices of commodities are Strongly Disagree 14 21%
low Disagree 05 7%
Not sure 00 00%
Agree 37 54%
Strongly Agree 12 18%
The procurement process is cost Strongly Disagree 08 12%
effective Disagree 00 00%
Not sure 00 00%
Agree 51 75%
Right products are procured Strongly Disagree 06 09%
Disagree 02 03%
Not sure 00 00%
Agree 48 71%
There timely delivery Strongly Disagree 45 66%
Disagree 18 26%
Not sure 00 10%
Agree 05 07%
Satisfaction is obtained from the Strongly Disagree 03 4%
supplies Disagree 25 37%
Not sure 12 18%
Agree 16 24%
Expectations of the beneficiaries Strongly Disagree 06 09%
from the supplies are met Disagree 02 03%
Not sure 00 29%
Agree 48 71%
Suppliers fulfil their contractual Strongly Disagree 06 09%
obligations Disagree 27 40%
Not sure 8 12%
Agree 22 32%
As to whether the prices of commodities are low, majority of the respondents, 7254%
agreed with the statement18% strongly agreed, 00% were not sure, 2807% of the
respondents disagreed with the statementand 21% strongly disagreed. The above responses
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imply that the procurement officers understand the power of the value for money. This
is because they try their best to pay for best quality goods and services at the lowest
costs. They also ensure that they allocate their money wisely in a profitable venture that
would give them a competitive advantage in the market. However, in order to achieve
this, they ensure that they have quality human and material resources at lowest cost and
make sure they balance the use of resources at reasonable cost as well.
Responses to the question as to whether under the procurement process is cost effective,
majority of the respondents, 8875% of the respondents agreed 13% strongly agreed with
the statement, 00% were not sure, whereas 00% disagreed and 12% of the respondents
strongly disagreed with the statement. The findings above are supported the key
informant who indicated that:
The cost of the product is directly related to the amount of value you deliver.
Another respondent said that; Stanbic Bank Uganda Limited give discounts
the right way. Stanbic Bank Uganda Limited gives discount if clients pay
everything upfront. It is encouraging early payment and removing the risk
of not getting paid later on. In relation to above, another respondent said
that; Stanbic Bank Uganda Limited reduces costs, increases turnover,
increases productivity, and increases efficiency to enhance profitability
((KII/001/12/05/2023)
As to whether right products are procured, the majority of the respondents, 8971%
agreed with the statement, 18% strongly agreed, 00% were not sure, 1203% of the
respondents disagreed with the statement respectivelyand 09% strongly disagreed.. The
findings above are supported by the key informants who assert that:
Stanbic Bank Uganda Limited management Calls the clients regularly. It
Schedules periodical calls with the customers to share updates about how
things are going and to ask how happy they are with the services In relation to
this, a respondent stated that; Stanbic Bank Uganda Limited is genuinely
committed to providing more customer service excellence than. It keeps an eye
on the communication outlets and it is ready and willing to answer any
questions, over any solutions, or address any issues that may arise in a timely
manner (KII/001/15/05/2023)
Another respondent stated that:
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Stanbic Bank Uganda Limited shares new market insights, its opinion on
the matter, and opportunities that the clients might not be aware of yet. It
should be noted that; Generating valuable content shows that the
organization is on top of the game and improves brand awareness
(KII/001/15/05/2023)
As to whether there is timely delivery of services, the majority of the respondents,
9266% strongly disagreed with the statement, 26% disagreed, 00% (00) were not sure,
whereas 080% (00) agreed and 07% disagreed with the statement respectively. This
implies that Stanbic Bank Uganda Limited operations produce maximum output for a
given set of inputs and make use of the right resources to accomplish tasks at hand.
However, they find it difficult to reduce wastes because of the poor methods and
practices they employ in their procurement planning. In other words because of
resource wastage accruing from wrong procurement planning practices, value for
money in terms of efficiency is affected.
Responses to the question as to whether satisfaction is obtained from the supplies,
majority of the respondents, 37% disagreed with the statement, 18% of the
respondents were not sure of the statement, 24%, agreed to the statement respectively.
As to whether expectations of the beneficiaries from the supplies are met, the majority
of the respondents, 8971% agreed with the statement, 18% strongly agreed, 00% were
not sure, 03% disagreed and 0129% of the respondents strongly disagreed with the
statement.
As to whether suppliers fulfil their contractual obligations, 5432% of the respondents
agreed with the statement, 22% strongly agreed, 12% were not sure, 3490% disagreed
and 09% strongly disagreed with the statement. This implies that effective and efficient
contractual obligations are one of the best way to improve value for money process and
further lead to a sustainable improvement in the performance of an organization.
4.4.2 Supplier Performance Management and Value for Money

The first objective in the study was to examine the effect of Supplier Performance
Management and Value for Money. To observe the influence, 6 question items were
administered to respondents to establish the extent to which they agreed with them.
Table 4.7: Descriptive statistics on supplier performance management
Item Response Freq %
Stanbic Bank Uganda Limited has established Strongly 09 13%
82
key performance indicators for all its Disagree
strategic supplies Disagree 2 03%
Not sure 2 03%
Agree 17 25%
quality expectations that suppliers are Disagree
expected to meet Disagree 06 09%
Not sure 03 04%
Agree 37 54%
quantity expectations that suppliers are Disagree
expected to meet Disagree 03 04%
Not sure 8 12%
Agree 42 62%
quarterly performance expectations that Disagree
strategic suppliers have to meet Disagree 27 40%
Not sure 00 00%
Agree 23 34%
annual performance expectations that Disagree
strategic suppliers have to meet Disagree 6 9%
Not sure 0 00%
Agree 17 25%
The contract manager regularly collects Strongly 16 24%
contract performance information Disagree
Disagree 18 26%
Not sure 06 09%
Agree 20 29%
Source Primary Data (2023)
As to whether Stanbic Bank Uganda Limited has established key performance
indicators for all its strategic supplies, 56% of the respondent strongly agreed with the
statement, 25% agreed, 03% were not sure of the statement, 03% disagreed and 13%
strongly disagreed with the statement.. The findings above are supported by the key
informants who indicated that:
Suppliers of Stanbic Bank Uganda Limited provide a detailed test, sample,
and inspection methods to ensure compliance with the key performance
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indicators. Suppliers of Stanbic Bank Uganda Limited help in defining the
requirements and then approach industry to see what is available to meet the
department’s/agency’s needs (KII/001/17/05/2023)
Responses to the question as to whether Stanbic Bank Uganda Limited has established
quality expectations that suppliers are expected to meet, 54% of the respondents agreed
with the statement 31% strongly disagreed, 09% disagreed, 04% were not sure, 01%
disagreed.. This implies that involving suppliers in quality expectations the buying
organizations to share knowledge and increase learning so that better solutions can be
found to complex inter-company problems that impact performance. The findings are
supported by the key informant who asserts that:
Supplier can have a significant impact on an organizations performance,
through their contributions towards cost reduction, eliminate inconsistency
in the designer’s manufacturing processes, minimize high-cost material
items, share technical expertise and processes within each other, enabling
the constant improvement of quality, share technology capabilities, and
increase responsiveness of buying companies (KII/001/17/05/2023)
With respect to whether Stanbic Bank Uganda Limited has established quantity
expectations that suppliers are expected to meet, the majority of the respondents 62%
agreed with the statement, 19% strongly agreed, 04% disagreed, 12% not sure, 03%
strongly disagreed. This implies that involving suppliers in quantity expectations the
buying organizations to share knowledge and increase learning so that better solutions
can be found to complex inter-company problems that impact performance.
Responses to the question as to whether Stanbic Bank Uganda Limited has established
quarterly performance expectations that strategic suppliers have to meet, the majority
of the respondents 40% disagreed, 34% agreed with the statement, 00% were not sure,
09% strongly disagreed and 12% strongly agreed. As to whether Stanbic Bank Uganda
Limited has established annual performance expectations that strategic suppliers have
to meet, the respondent’s responses indicated that the majority of the respondents 52%
strongly agreed, 25% agree, 00% not sure, 03% disagreed and 13% strongly disagreed
with the statement. The findings above are supported by the key informants who
indicated that:
Stanbic Bank Uganda Limited uses data to evaluate and compare
performance of new suppliers, and for continuous improvement, and
appraisal on a two-way basis can highlight the buyer's deficiencies, which is
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the source of common problems within many supplier relationships. The key
informant indicated that desk appraisal is one of the widely used methods in
appraising suppliers. This involves use of published and unpublished
information already in existence and is particularly applicable to product
and financial appraisal. Secondary data applicable include catalogues,
product data sheet furnished by the supplier. This leads to investigation on
specific factor. It helps to appraise the accuracy and veracity of the answers
provided by potential suppliers (KII/002/20/05/2023)
As to whether the contract manager regularly collects contract performance
information, 29% of the respondents agreed with the statement, 12% strongly agreed,
09% not sure, 26% disagreed and 24% strongly disagreed with the statement. These
findings revealed material weaknesses in reviewing supplier performance for lack of
data collection instrument on supplier performance, failure by contract managers to
promptly collect supplier performance information, inadequate use of meeting, supplier
appraisal and use of performance reports to review supplier performance a practice
which constrains procurement performance.
4.4.2.1 Regression of Supplier Performance Management and Value for Money

The simple linear regression analysis was applied to ascertain the magnitude of the
effect of Supplier Performance Management on Value for Money and the results are
shown in the table 4.8 below:
Table 4.8: Model summary
Model R R Square Adjusted R Square Std. Error of the Estimate

1 .159a .025 .035 .92903
a. Predictors: (Constant), Supplier performance management
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The R Square explains the effect of the independent variable of Supplier Performance
Management on Value for Money, is 0.35. This suggests that Supplier Performance
Management account for 35% variation in the dependent variable Value for Money.
Table 4.9: Regression of supplier performance management
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) 2.603 .675 3.855 .000
Supplier
Performance .392 .241 .350 1.624 .000
Management
a. Dependent Variable: Value for money
The study further revealed that Supplier Performance Management as a dimension of
the independent variable has a Standardized Coefficient Beta of 0.35. The moderate
positive results indicate that the Supplier Performance Management accounts for 35%
variation in Value for Money at Stanbic Bank Uganda Limited. The study results
further indicated a significant statistical of Supplier Performance Management on
Value for Money given that P-value (P=0.01<0.05). The hypothesis that Supplier
Performance Management significantly affects Value for Money is therefore upheld.
This implies that the more the Supplier Performance Management, the better the Value
for Money. This means that any change in Supplier Performance Management leads to
the same change in Value for Money.
4.4.3 Supplier Development and Value for Money
The second objective in the study was to examine the effect of Supplier Development
and Value for Money. To observe the influence, 7 question items were administered to
respondents to establish the extent to which they agreed with them.
Table 4.10: Descriptive Statistics on Supplier Development and Value for Money
Item Responses Frequency Percent
Stanbic Bank Uganda Limited Strongly Disagree 02 03%
pricing policy is jointly agreed on Disagree 04 06%
with its suppliers Not sure 02 03%
Agree 22 32%
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undertakes supplier evaluation Disagree 04 6%
periodically to ensure good quality of Not sure 05 7%
the goods and services
Agree 44 65%
In most aspects of the relationship, Strongly Disagree 01 01%
the responsibility for getting things Disagree 06 08%
done is shared Not sure 9 13%
Agree 34 50%
We openly advise our suppliers on Strongly Disagree 13 19%
the best technology to use in Disagree 27 40%
handling our products Not sure 07 10%
Agree 16 24%
The technical abilities of the public Strongly Disagree 01 1%
staffs in handling products are Disagree 04 6%
evaluated supplying to them Not sure 00 00%
Agree 58 85%
Stanbic Bank Uganda Limited makes Strongly Disagree 18 26%
its supply plans for the next seasons Disagree 28 41%
together with its suppliers in Uganda Not sure 9 13%
Agree 12 18%
organizes training of its suppliers Disagree 06 09%
Not sure 03 04%
Agree 37 54%
With respect to whether Stanbic Bank Uganda Limited pricing policy is jointly agreed
on with its suppliers, majority of the respondents, 32% agreed 53% strongly agreed,
06% were not sure, 03% disagreed and 06% strongly disagreed. This implies that
Stanbic Bank Uganda Limited extends financial support to specific suppliers who may
experience financial difficulties so as to empower them to meet their financial
obligations. This indicates that a supplier who is properly and adequately financially
supported, increases the buying organizations ability to deliver high-quality and
innovative products to its customers and thus reduces buyers operational risks.
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Supplier’s financial support is critical in determining the supplier’s ability to remain
financially solvent.
Responses to the question as to whether Stanbic Bank Uganda Limited undertakes
supplier evaluation periodically to ensure good quality of the goods and services,
majority of the respondents 65% agreed with the statement, 21% strongly agreed, 7%
were not sure, 6% disagreed and 01% strongly disagreed.
As to whether in most aspects of the relationship, the responsibility for getting things
done is shared, 50% agreed with the statement, 26% strongly agreed, 13% were not
sure, 08% disagreed and 01% strongly disagreed.
With respect to whether the bank openly advises suppliers on the best technology to use
in handling products, 40% agreed, 19% strongly agreed, 10% were not sure, 20%
disagreed and 6% strongly disagreed.. This implies that Stanbic Bank Uganda Limited
conducts so called innovation workshops with its suppliers. The findings are supported
by the key informants who argued that:
Once target suppliers are selected, Stanbic Bank Uganda Limited conducts
so-called innovation workshops with its select suppliers. Stanbic Bank
Uganda Limited invites suppliers to workshops and gives them chances to
share pain points they experience and/or provide opportunities they see and
brainstorm ideas together to solve the situations they mention or capture
opportunities they describe. The areas of problem solving and innovation do
not limit to new product development they actually cover all possible
interactions that Stanbic Bank Uganda Limited and suppliers can have
through business operations. The ideas generated from workshops mostly
handle short-term situations and opportunities (KII/005/13/05/2023)
Another respondent stated that:
The innovation ideas are mostly centred on product innovation and
marketing and/or service improvement, and few fresh ideas have been
generated from users as time passes by. Given that suppliers are usually
involved in supply chains of multiple companies in the same industry, it’s
significantly to have closer relationships with suppliers and have them play
critical roles in open innovation in our company. In this regard, it’s the high
time to rethink the role of suppliers in open innovation
(KII/008/17/05/2023)
88
With respect to whether technical abilities of the public staffs in handling products are
evaluated supplying to them, the majority of the respondents, 85% agreed with the
statement, 10% strongly agreed, 00% were not sure, 01% disagreed and 02% strongly
disagreed. The findings are supported by the key informant who noted that:
Public staffs have helped to reduce costs and development time, increase
quality and provide innovation to increase market share at Stanbic Bank
Uganda Limited. By keeping the supplier-partner’s future needs in mind,
decisions of suppliers regarding investments, new product, new process or
system could be facilitated. Thus, the possibility of misjudgement or wrong
strategy made would be reduced (KII/009/19/05/2023)
As to whether the Stanbic Bank Uganda Limited makes its supply plans for the next
seasons together with its suppliers in Uganda, the majority of the respondents, 41%
disagreed with the statement, 26% strongly disagreed, 13% were not sure, 18% agreed
and 01% strongly agreed. This implies that Stanbic Bank Uganda Limited always
makes its procurement plans for the next seasons together with its suppliers and
alternatively suppliers always provide them with sale forecasts for the products buyer
companies buy from them. The findings are supported by the key informants who
stated that:
Stanbic Bank Uganda Limited is able to develop mutually beneficial

knowledge sharing relationships with suppliers by talking to them about
their future requirements. Stanbic Bank Uganda Limited seeks the opinions
of its suppliers because they have their own impressions of how the company
is performing. Stanbic Bank Uganda Limited uses formal surveys to gather
this knowledge or ask for their views on a more informal basis
(KII/011/22/05/2023)
As to whether Stanbic Bank Uganda Limited organizes training of its suppliers, the
majority of the respondents, 54% agreed with the statement, 26% strongly agreed,
13% were not sure, 08% disagreed and 01% strongly disagreed. This implies that
Stanbic Bank Uganda Limited selects the type of training suitable for specific groups of
suppliers. However much 08% of the respondents disagreed and were not sure
respectively. It should be noted that, the right type of training could then lead to an
increase in performance for the supplier which would in turn encourage an increase in
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buyer supported training. The findings are supported by the key informant who
asserts that:
Supplier training programs are designed by the buyer focused on enhancing
and improving supplier technical capability in terms of key competencies
like quality, production processes and management best practices to
enhance firm’s productivity (KII/001/17/05/2023)
Relatedly, another key informant said:
“It has now became a routine that our suppliers have to be trained on what
you expect from them after being selected…we don’t mean they don’t know
what to do…they of course know but Stanbic Bank Uganda Limited has
different targets away from what other organizations they might have been
working with wanted…so training and continually advising them becomes
very key in stimulating their performance and our performance at Stanbic
Bank Uganda Limited …” (KII/012/16/05/2023)
4.4.3.1 Regression of Supplier Development and Value for Money

The linear regression analysis was applied to ascertain the magnitude of the effect
Supplier Development on Value for Money and the results are shown in the table 4.1
below:
Table 4.11: Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .159a .045 .052 .72903
a. Predictors: (Constant), Supplier development

The adjusted R Square explains the effect of the independent variable Supplier
Development on Value for Money, is 0.52. This suggests that Supplier Development
account for 52% variation in Value for Money.
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Table 4.12: Regression analysis for Supplier Development
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 2.603 .675 3.855 .001
Supplier
.392 .241 .520 1.624 .000
development
a. Dependent Variable: Value for money
The study further revealed that Supplier Development as a dimension of the
independent variable has a Standardized Coefficient Beta of 0.520. The strong positive
results indicate that the Supplier Development accounts for 52% Value for Money at
Stanbic Bank Uganda Limited. The study results further indicated a significant
statistical relationship between the study variables given that P-value (P=0.01<0.05).
The hypothesis that Supplier Development significantly affects Value for Money is
therefore upheld. This implies that the more Supplier Development, the better the Value
for Money. This means that any change in Supplier Development leads to the same
change in Value for Money.
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CHAPTER FIVE
SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter presents analyses and interprets results. The findings are presented
according to the objectives of the study. The study examined the effect of Supplier
Relationship Management on Value for Money in procurement in commercial banks in
Uganda with a case study of Stanbic Bank Uganda Limited. The objectives of the study
were to examine the effect of Supplier Performance Management on Value for Money
at Stanbic Bank Uganda Limited and to examine the effect of Supplier Development on
Value for Money in Stanbic Bank Uganda Limited. This chapter provides summaries of
the findings from the study, discusses the empirical results in view of the research
objectives, and draws conclusions and finally recommendations.
5.2. Summary of major findings
The summary of the major findings is presented based on the study objectives as laid
out chapter one of this report.
5.2.1: Supplier Performance Management and Value for Money
The study revealed that the strategies of Supplier Performance Management included;
Stanbic Bank Uganda Limited has established key performance indicators for all its strategic
supplies, Stanbic Bank Uganda Limited has established quality expectations that suppliers are
expected to meet, Stanbic Bank Uganda Limited has established quantity expectations that
suppliers are expected to meet, Stanbic Bank Uganda Limited has established quarterly
performance expectations that strategic suppliers have to meet. The findings further
established that Supplier Performance Management had a moderate positive effect on the
Value for Money at Stanbic Bank Uganda Limited. The adjusted R square which
explains the effect of Supplier Performance Management on Value for Money was 0.35
which account for 35% variation in Value for Money. The study results further
indicated a significant effect of Supplier Performance Management on Value for Money
given that P-value (P=0.00<0.05).
The study revealed that the strategies of supplier development included; Stanbic Bank
Uganda Limited pricing policy is jointly agreed on with its suppliers, Stanbic Bank Uganda
Limited undertakes supplier evaluation periodically to ensure good quality of the goods and
services, In most aspects of the relationship, the responsibility for getting things done is
92
shared, We openly advise our suppliers on the best technology to use in handling our
products, The technical abilities of the public staffs in handling products are evaluated
supplying to them and Stanbic Bank Uganda Limited makes its supply plans for the next
seasons together with its suppliers in Uganda. The findings established that Supplier
Development had a strong positive effect on the Value for Money at Stanbic Bank
Uganda Limited. The adjusted R square which explains the effect of Supplier
Development on Value for Money was 0.52 which account for 52% variation in Value
for Money. The study results further indicated a significant effect of Supplier
Development on Value for Money given that P-value (P=0.00<0.05).
5.3. Discussion of findings

It was also revealed in this study that performance evaluations are highly correlated
with Value for Money. Novita and Sudaryan (2021) confirm that performance
evaluations are crucial parts of performance management. Similarly, Jedaia and
Mehrez, (2020) reaffirm performance evaluation as a basic tool that makes suppliers
very effective and active in performing their tasks and duties in the organization. This
study clearly noted that evaluation feedback is often provided to the suppliers’ which
helps them to perform their tasks. This feedback is helpful in highlighting any
performance gaps that need to be addressed. In fact, Okoth and Florah (2019) were
right to assert that by providing feedback, it helps the suppliers to identify those
weaknesses in their current performance hence enabling them to make adjustments for
purposes of achieving the stated goals and targets.
The study findings are consistent with Antara et al (2020) who indicated that
performance appraisal is often carried out in Stanbic Bank Uganda Limited as revealed
by the results though this was not statistically significant with Value for money.
Important to note is that performance appraisal is very critical to employee
performance. By appraising the suppliers, various performance aspects are generated
for management to address. An individual’s performance is rated and scored which
93
highlights how they are performing against the set targets and goals. Critical in this
process is that the employee is able to understand his/her weaknesses which have to be
worked on. Similarly, the supervisors are able to understand each one’s high
performing points and weakest points hence devise means of addressing them. In
essence, appraisal is healthy as it checks the employee’s level of input against the
outputs hence resulting into improved performance when weaknesses are addressed.
The study findings are in agreement with Roberts, Neumann, and Cauvin, (2020)
suppliers must know what they need to do perform their jobs successfully. Expectations
for employee’s performance are established in employee performance plans.
Employee’s performance plans are all of the written or otherwise recorded, elements
that set forth expected performance. In greater detail, the goals of the performance
appraisal system from an MBO perspective are mutually defined by a number of key
stakeholders who include the subordinates, supervisors and suppliers as well. A typical
MBO appraisal system consists of several steps. The process begins by the establishment
of clear objectives for the employee. An action plan detailing the way in which the
objectives are to be achieved is develop. The employee is then allowed to implement the
developed action plan. This allows for appraisal of performance in an objective maimer.
Corrective actions are taken in situations deemed necessary as well as new objectives
for the future established.
The study findings are consistent with Bai and Satir (2020) who posit that supply
company managers make sure to train suppliers who have positive work experience to
decision making hence motivating the min results increasing firm performance. The
managers make sure they provide the staff with motivation programs, promotion
programs and good supplier programs. Further, the buyer may send his suppliers or
group of team to train supplier or he may invite group of suppliers facing same problem
for training in his own firm. Therefore, training suppliers is a very important tool in
increasing supplier base since it increases supplier competency and the opportunities to
enhance Value for Money. Masinde and Osoro (2019) found that Supplier Development
programs support the development of a supplier’s capabilities usually with the
assistance of a buyer. Supplier Development also depends on supplier’s interest and
how they explore them self to increase their capabilities to provide value for money.
Thus, it is important that suppliers looking to develop their capabilities have access to
94
the type of training that they require which may or may not be provided by their
buyers. For suppliers that have access to buyer-supported training their training needs
might often change as they develop their own capabilities.
The study findings are cognizant with Changalima, Ismail and Mchopa (2021) who
indicated that Supplier Development is concerned with assisting the actual and potential
suppliers produce and supply high quality inputs to their prospective clients. Suppliers
help organizations to meeting their present and future requirements, since no
organization is capable of satisfying all its supplies requirements from its internal
sources. In most cases it involves large organizations extending a helping hand in form
of resources to small vendors/small suppliers who have demonstrated willingness to
meet their purchaser’s requirements. Mwagike and Changalima (2022) noted that
analyzing Value for Money in performance management of suppliers, price, quality,
and time to market immediacy, product credibility, service reliability, support
capability, research and development power, purchase specialty, value analysis, value
engineering and e-commerce.
Ismail et al (2022) conveys that Suppliers’ need competent technical ability to provide
high quality product or service, ensure future a rise in performance and promote
successful development efforts. This is very important when the firm’s strategy included
the development of a new product or technology or access to proprietary technology.
These technical criteria insist company to shift into the global market place. This factor
has been measured on the basis of the importance of the following technical areas:
compliance with quantity, compliance with due date, compliance with packaging
standard, and production planning systems of suppliers, maintenance activities of
suppliers and plant layout and material. Das and Buddress (2017) also revealed that
potential production capability of each supplier should be analysed to meet a specified
Production plan and also to develop a new product according to the market demand.
Therefore the production facilities and ability of the supplier to improve its capacity
should also be taken into account in order to judge the best one.
5.4 Conclusions
Study conclusions were drawn based on the study findings.
The study concluded that Supplier Performance Management significantly affect
procurement Value for Money and the failure to set supplier performance targets and
95
reviewing supplier performance constrain the attainment of procurement agility, Value
for Money and internal customer satisfaction indicators of procurement.
From the study, it was found that supplier development played an important role in the
Value for Money at Stanbic bank especially through supplier training, early supplier
involvement, and financial support. The study revealed that the strategies of Supplier
Development included; training suppliers about the required products, allowing
suppliers have representatives at the buyers premises, sending buyer representative
personnel to illustrate to the suppliers on some production stages, involving suppliers in
the product design stages, involving suppliers in the product decision, using similar
suppliers for repeated times, Giving suppliers incentives to boost their finance, direct
investment in equipment and production tools and outsourcing parts and services from
external suppliers.
5.5 Recommendations
In light of the study conclusions, the following recommendations were made in line with
the objectives of this study.
The management of banking institutions needs to invest much in evaluating the
performance of suppliers consistently as they assess their suitability and capability
before they are given contracts. The selection process should entail assessing of their
past performance and evaluation should go after work is done so that they can be
replaced or advised where they are not doing well.
To enhance Value for Money in banking sector, the study recommends that
management should set supplier performance indicators, quantity expectations and
quarterly performance expectations for strategic supplies. The contract managers
should also collect supplier performance data based on established tool and indicators
and regularly generate report for management actions.
In relation to supplier relationships management programs, government agencies
involved in procurement should establish effective relationships with suppliers. This
should be through maintaining constant touch with the suppliers, long cordial
relationships, train suppliers and communicate effectively with suppliers. The
96
organizations should also check suppliers’ performance effectiveness; establish trust
and good relationships with them.
Management of the banking sector in particular should introduce a policy of “Supplier
Development”. It should focus on supplier training and enrolment in seminars and
workshops provide them with capital benefits to undertake their work.
The study also recommends that the organization adopts supplier optimization policies
where the company was able to pick suppliers based on their capabilities and not just
based on the price and the quality of service or product. These procurement policies will
ensure that delays resulting from the procurement process are corrected and the
organization is able to positively influence its performance through the procurement
department and not lose money through the same department.
There should be a plan to ensure awareness of Supplier Development amongst the
concerned parties so that its practice is obvious as any other organizational routine. For
example, suppliers can be trained about supplier development so that there is no chance
of taking it for granted because of the important roles it plays on the organization's
performance.
5.6. Areas for future Research

The study was limited on Supplier Relationship Management and Value for Money in
procurement. There is therefore a need for further study to ensure that many more
variables are used more than SRM like financial management, public private
partnership and many more.
Supplier Relationship Management and Value for Money in procurement were
restricted on three dimensions each. Theoretically, these variables can have many more
dimensions and indicators. It is thus important for another study to be undertaken to
study these variables using more other dimensions and indicators for a comprehensive
understanding of the study.
Further research should be carried out procurement management practices and value
in other Financialfinancial institutions and government agencies such as ministries,
schools and non-government organizations to confirm the consistency of the findings of
this study. Also studies can be carried out politics and revenue challenges in relation to
value for money in Financialfinancial institutions .institutions.
97
Further research should also be conducted to find out how supplier education, supplier
collaboration and supplier segmentation affect procurement performance of
manufacturing organizations.
98
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APPENDICES

AND OPERATIONS’ DEPARTMENT
Dear Respondent,
I am BAYIGA DORCUS a student at Uganda Management Institute pursuing a
Master’s Degree in Public Procurement Management. As one of the requirements for
being awarded with this qualification, I am conducting a study on, “The effect of
Supplier Relationship Management on Value for Money in Procurement in Commercial
Banks in Uganda with a case study of Stanbic Bank Uganda Limited”. You have been
identified as one of the resourceful people to participate in this study. You are requested
to answer the questions as honestly as possible to enable reliable conclusions and
recommendations. All your responses was used strictly for research purpose and treated
with anonymity and utmost confidentiality.
SECTION A: DEMOGRAPHIC CHARACTERISTICS
Individual Characteristics
Please tick the option that best describes you.
Indicate your Sex
Male Female
1 2
In which age bracket do you fall?
18-25 years 26-30yrs 31-35yrs 36-40 years 41 years and above
1 2 3 4 5
Highest Education Level
Certificate Diploma Degree Masters PHD
1 2 3 4
Years of Service
1-3years 4-6 years 7-9 years 10 years and above
1 2 3 4
1
SECTION B: QUESTIONS ON THE STUDY VARIABLES
You are required to answer the following statements using the key presented to you.
Key: 5Strongly Agree (SA), 4- Agree (A), 3- Not sure (NS), 2- Disagree (D) and 1
represents Strongly Disagree (SD).
SA A NS D SD
SUPPLIER PERFORMANCE MANAGEMENT
SPM1 Stanbic Bank Uganda Limited has established key

performance indicators for all its strategic supplies
SPM2 Stanbic Bank Uganda Limited has established quality

expectations that suppliers are expected to meet
SPM3 Stanbic Bank Uganda Limited has established quantity

expectations that suppliers are expected to meet
SPM4 Stanbic Bank Uganda Limited has established quarterly

performance expectations that strategic suppliers have to
meet
SPM5 Stanbic Bank Uganda Limited has established annual

performance expectations that strategic suppliers have to
meet
SPM6 Stanbic Bank Uganda Limited has an established data

collection tools/forms for collecting information on
strategic suppliers
SPM7 The contract manager regularly collects contract

performance information
SPM8 Meetings are used to share information on supplier

performance
SUPPLIER DEVELOPMENT
2
SD1 Stanbic Bank Uganda Limited pricing policy is jointly
agreed on with its suppliers
SD2 Stanbic Bank Uganda Limited undertakes supplier

evaluation periodically to ensure good quality of the goods
and services
SD3 In most aspects of the relationship, the responsibility for

getting things done is shared
SD4 We openly advise our suppliers on the best technology to

use in handling our products
SD5 The technical abilities of the public staffs in handling

products are evaluated supplying to them
SD6 Stanbic Bank Uganda Limited makes its supply plans for
the next seasons together with its suppliers in Uganda
SD7 Stanbic Bank Uganda Limited organizes training of its

suppliers
VALUE FOR MONEY
VfM1 The prices of commodities are low
VfM2 The procurement process is cost effective
VfM3 Right products are procured
VfM4 There timely delivery
VfM5 Satisfaction is obtained from the supplies
VfM6 Expectations of the beneficiaries from the supplies are met
VfM7 Suppliers fulfil their contractual obligations
VfM8 Suppliers fulfil their obligations fast
Thanks for your time & cooperation
3
APPENDIX TWO: INTERVIEW GUIDE FOR THE MANAGERS
Dear Sir/ Madam,

I am BAYIGA DORCUS REG 18/MPP/KLA/WKD/0001 a student at Uganda
Management Institute pursuing a Master’s Degree in Public Procurement
Management. As one of the requirements for being awarded with this qualification, I
am conducting a study on, “The extent to which Supplier Relationship Management
contributes to Value for Money in Procurement in Commercial Banks in Uganda with a
case study of Stanbic Bank Uganda Limited”. You have been identified as one of the
resourceful people to participate in this study. You are requested to answer the
questions as honestly as possible to enable reliable conclusions and recommendations.
All your responses was used strictly for research purpose and treated with anonymity
and utmost confidentiality.
i. Are reference checks done on suppliers previous contracts?
ii. Is verification of documentation submitted by the suppliers done with relevant
authorities?
iii. Is assessment of supplier’s equipment undertaken before award of contract?
iv. Are supplier staff qualifications vetted?
v. What are some of the challenges in selecting of suppliers in Stanbic Bank
Uganda Limited?
4
vi. What can be done to improve on the selection of suppliers in Stanbic Bank
Uganda Limited?
vii. Can you suggest some other criteria that can be considered in order to select
effective suppliers?
viii. Describe the Efforts to Use Supplier Development with Strategic Suppliers In
Stanbic Bank Uganda Limited
ix. To what extent has Stanbic Bank Uganda Limited considered the use of supplier
performance targets with its strategic suppliers
x. What Are the Challenges Supplier Performance Management in Stanbic Bank
Uganda Limited
Thanks for your time & cooperation
5
APPENDIX III: SAMPLING GUIDE

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SUPPLIER RELATIONSHIP MANAGEMENT AND VALUE FOR MONEY IN

PROCUREMENT IN COMMERCIAL BANKS OF UGANDA: A CASE OF

A RESEARCH DISSERTATION SUBMITTED TO THE SCHOOL OF MANAGEMENT

DR. BRUCE KISITU

Sign ……………………………………. Date………………………………..

DR. JULIET ATWEBEMBEIRE

I acknowledge with gratitude the contributions and co-operation made by the

1.1 Background to the Study...........................................................................................................2

1.1.1 Historical Background............................................................................................................2

1.1.2 Theoretical Background..........................................................................................................4

1.1.3 Conceptual Background..........................................................................................................5

1.1.4 Contextual Background..........................................................................................................6

1.2 Problem statement.....................................................................................................................7

1.3 Purpose of the study...................................................................................................................8

1.4 Specific Objectives....................................................................................................................8

1.5 Research Questions....................................................................................................................8

1.5 Hypothesis of the Study.............................................................................................................8

1.7 Significance of the Study...........................................................................................................9

1.9 Scope of the study....................................................................................................................10

1.10.1 Subject scope......................................................................................................................10

1.10.2 Geographical scope.............................................................................................................10

1.10.2 Time scope..........................................................................................................................10

1.11 Operating definitions.............................................................................................................10

2.2 Theoretical review...................................................................................................................12

2.3 Related literature review..........................................................................................................13

2.3.1 Supplier performance management and Value for money...................................................13

2.3.2. Supplier development and Value for Money.......................................................................17

2.4 Value for Money......................................................................................................................21

2.5 Summary of literature review..................................................................................................22

3.2 Research design.......................................................................................................................24

3.3 Study Population......................................................................................................................24

3.4 Sample Size.............................................................................................................................24

3.5 Sampling Techniques and procedures.....................................................................................25

3.5.1 Simple Random Sampling....................................................................................................25

3.6 Data Collection Methods.........................................................................................................25

3.6.1. Questionnaire Survey...........................................................................................................26

3.7.2 Interview guide.....................................................................................................................27

3.8 Quality control of data.............................................................................................................27

3.8.1 Validity of instruments.........................................................................................................27

3.8.2 Reliability of instruments.....................................................................................................29

3.9 Data collection procedure........................................................................................................30

3.10. Data Analysis Technique......................................................................................................30

3.10.1 Quantitative data analysis..................................................................................................30

3.10.2 Qualitative data analysis.....................................................................................................31

3.11 Measurement of variables......................................................................................................31

3.12 Ethical Considerations...........................................................................................................31

PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS.........................33

4.2 Response Rate..........................................................................................................................33

4.3.1 Sex of the respondents..........................................................................................................33

4.3.2 Age of the respondents.........................................................................................................34

4.3.3 Education level of respondents.............................................................................................35

4.3.4 Years of service in the organization.....................................................................................35

4.4 Empirical findings...................................................................................................................36

4.4.1 Value for Money at Stanbic Bank Uganda Limited.............................................................36

4.4.2 Supplier Performance Management and Value for Money..................................................39

4.4.3 Supplier Development and Value for Money.......................................................................43

SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS...................48

5.2. Summary of major findings....................................................................................................48

5.2.1: Supplier Performance Management and Value for Money.................................................48

5.2.2 Supplier Development and Value for Money.......................................................................48