Effect of Procurement Planning on Organizational Performance Within the Public Sector: A Case of Ruhengeri Referral Hospital in Musanze District, Rwanda

Abstract

Public entities in Rwanda spend a significant amount of money on procurement. This is the process of acquiring goods, works, or services from a vendor. The general objective of this study was to assess the effect of procurement planning on organizational performance within the public sector. Specifically, the study assessed the effect of needs assessments in procurement planning on performance of Ruhengeri referral hospital, analyze the effect of quality specification in procurement planning on performance of Ruhengeri referral hospital, examine the effect of cost estimation in procurement planning on performance of Ruhengeri referral hospital and assess the effect of terms of payment in procurement planning on performance of Ruhengeri referral hospital. Research was guided by Resource Based viewpoint theory and Transaction Cost Economics theory. Descriptive research design was adopted in this research. This study has taken 106 populations who have direct works related to procurement planning functions from Ruhengeri referral hospital and reporting health centers (42 working at Ruhengeri referral hospital main location and 64 from 12 health centers under management of Ruhengeri referral hospital). The researcher has determined that due to the small population size, a census inquiry method employed instead of sampling. This study used both primary and secondary data, and each has its specific instruments for collection including questionnaire, documentary and interview. Here the researcher tends to interpret frequency, percentages, mean, and standard deviation, as results of Statistical Package for Social Scientists (SPSS) version 20 while content analysis used to analyze qualitative data. The Model Summary provides valuable observations into the effect of independent variables Terms of payment in procurement planning, Needs identification in procurement planning, Quality specification in procurement planning, Cost estimation in procurement planning on the dependent variable, organization performance. The findings revealed the coefficient of determination (R Square), which is 0.652, demonstrates that 65.2% of the variance in organizational performance of Ruhengeri Referral Hospital explained Terms of payment in procurement planning, Needs identification in procurement planning, Quality specification in procurement planning, Cost estimation in procurement planning. The results indicate the coefficient of needs identification in procurement planning (β: 0.399, p: 0.000), it shows the significant effect of needs assessments in procurement planning on organizational performance of Ruhengeri referral hospital. The results indicate the coefficient of quality specification in procurement planning (β: 0.387, p: 0.001), it shows the significant effect of quality specification in procurement planning on organizational performance of Ruhengeri referral hospital. The results indicate the coefficient of cost estimation in procurement planning (β: 0.152, p: 0.022), it shows the significant effect of cost estimation in procurement planning on organizational performance of Ruhengeri referral hospital. The results indicate the coefficient of terms of payment in procurement planning (β: 0.237, p: 0.021), it shows the significant effect of terms of payment in procurement planning on organizational performance of Ruhengeri referral hospital.  It is recommended that Ruhengeri Referral Hospital continues to strengthen its needs assessment process by involving a wider range of stakeholders.