ASSESSMENT OF FACTORS INFLUENCING E PROCUREMENTADOPTION BY SMALL AND MEDIUM SIZED ENTERPRISES IN NYERI COUNTY – KENYA

Abstract

Worldwide, SMEs have been seen as catalysts of economic growth and empowerment more so in emerging economies such as Kenya where they constitute more than 80% of all business entities. Growth in technology and huge technological advancements led to innovations such as e-procurement which is the application of information systems and usage of electronic means such as internet in carrying out procurement activities and process leading to numerous benefits. However, previous studies have shown that SMEs in unindustrialized nations have not fully adopted e-procurement or there is no adoption at all. Similarly, there is little literature on implementation of e-procurement by SMEs in emerging economies. Objectives of the study were assessment of organizational, technological and environmental factors as factors that influence e-procurement adoption by SMEs in Nyeri county as well as establishing the moderating effect of government policies on the relationship between factors affecting e procurement adoption and the adoption of e-procurement by SMEs in Nyeri County. The study was premised on Diffusion of innovation thery and the Technological Organizational Environmental (TOE) adoption framework theory in assessing e-procurement implementation by SMEs. This study applied inferential statistics so as to inference the population and enable generalization of the research findings. Descriptive statistics were used to measure variability and provided data summaries and results presented in tables. The study sampled 195 respondents from a target populace of 377 firms by use of stratified sampling method. Data gathering was by use of questionnaires where 128 responses were gotten from the sample. SPSS system was used for data analysis. A pilot study was conducted to test the validity and reliability of the study which yielded a Cronbach’s Alpha coefficient of 0.72 (72%) with an internal consistency of 99.2% hence the tools of data collection was deemed reliable. The study through logistic regressions analysis found that organizational, technological and environmental factors had no significant relationship on adoption of e-procurement. It also found that government policies had no moderating effect on independent variables that influence acceptance of e-procurement by SMEs. The research concluded that e-procurement implementation by SMEs was still very low and recommended that SMEs should be sensitized and encouraged to use e-procurement. It also recommended further studies to establish barriers that could still be hindering adoption and also the best forms of e-procurement technologies that SMEs can comfortably adopt