Get premium membership and access questions with answers, video lessons as well as revision papers.
Centralization of procurement means that procurement decisions are all executed at the top. Basically, a centralization decision is influenced by factors such as the cost of decisions, desired uniformity of policy, subordinates desire the independence, economic size of enterprise and history of organization.
Given today’s magnitude of purchasing expenditures, then there is dire need for efficiency in the purchasing department.
Centralization enhances efficiency in that:-
(i) It enhances control
Control is monitored and left entirely to one or a few persons thus greater monitoring
(ii) It eliminates inefficient duplication of effort
Therefore, no time is wasted in the procurement process
(iii) Centralization promotes certainty because decisions are made in one place by one or few persons. Thus the required specifications are know to be met in advance.
(iv) Saves on cost
Centralization of the procurement policy of a large organization saves on cost of purchase because the goods are bought in large volumes and thus quantity discount.
Efficient procurement focused on capabilities
The traditional procurement paradigm is fraught with issues. There is the matter of obsolescence – the tender takes so long to develop, respond to and to evaluate that by the time the contract has been awarded, the user’s requirements have already evolved and changed. Contracts are also generally rigid and inflexible, unable to readily support changes that naturally occur within an agency’s business environment, such as changing strategy, policy and technology. The development of detailed tender specifications and the evaluation of the responses is also extremely costly to the public sector. Moreover, the investment required by the private sector to respond to a detailed specification is a high proportion of its operating expenditure (the cost of responding to tenders can approach or exceed 20 percent of total operating expenditure) In short, the traditional procurement paradigm often results in agencies acquiring solutions that do not meet their needs, in a manner that increases costs for vendors and agencies alike.
To circumvent these problems, several approaches can be considered to mitigate the issues associated with traditional contracting. Public agencies should ensure that their tenders are simple and focused on assessing the relevant organizational capability of the vendor. Examples of criteria that the tender should seek to evidence could include the vendor’s relevant experience in a program of this type and scale, the strength of the vendor’s relevant reference sites, the strength of the vendor’s top management team proposed for the program, the scale and track record of the vendor in the local market and financial viability of the vendor.
Public agencies should also outline the required business outcomes and evaluate the ability of vendors to work within a framework that aligns the incentives of both parties. To achieve this, the tender could include additional evaluation criteria e.g. the vendor’s understanding of the client’s business and business outcomes; the vendor’s ideas as to potential contractual frameworks that would best align the objectives of the parties and maximize the probability of achieving desired outcomes, and the vendor’s practical experience in operating within the proposed framework (evidenced by reference sites, track record, lessons learned, etc)
Kavungya answered the question on April 29, 2021 at 09:58
- “Procurement is an important aspect of production management.”
Explain how an efficient procurement policy benefits an organization.(Solved)
“Procurement is an important aspect of production management.”
Explain how an efficient procurement policy benefits an organization.
Date posted: April 29, 2021. Answers (1)
- Distinguish between goals and objectives describing how they can be used in the development of corporate strategic plans.(Solved)
Distinguish between goals and objectives describing how they can be used in the development of corporate strategic plans.
Date posted: April 29, 2021. Answers (1)
- What are the characteristics of a good mission statement?(Solved)
What are the characteristics of a good mission statement?
Date posted: April 29, 2021. Answers (1)
- Discuss the contributions of scientific school of management to the study of work and its relevance to the management of organizations today.(Solved)
Discuss the contributions of scientific school of management to the study of work and its relevance to the management of organizations today.
Date posted: April 29, 2021. Answers (1)
- Explain the environmental factors that a marketing manager should consider before entering the international market.(Solved)
Explain the environmental factors that a marketing manager should consider before entering the international market.
Date posted: April 29, 2021. Answers (1)
- “When a company introduces a new product, it faces the challenges of setting its price for the first time.”
Discuss this statement using the two pricing...(Solved)
“When a company introduces a new product, it faces the challenges of setting its price for the first time.”
Discuss this statement using the two pricing strategies.
Date posted: April 29, 2021. Answers (1)
- United Manufacturing Ltd. produces agricultural chemicals and currently has 800 employees stationed in its four branches.
The company has been experiencing very rapid growth in the...(Solved)
United Manufacturing Ltd. produces agricultural chemicals and currently has 800 employees stationed in its four branches.
The company has been experiencing very rapid growth in the last few years and the number of employees is expected to increase. To maintain its competitive edge the company has been training the existing employees and improving their benefits.
Recently, a new human resource manager was appointed and he has suggested that the company should invest in a computerized human resource information system to replace the manual system.
Required:
(a) Explain how a computerized human resource information system will benefit United Manufacturing Ltd.
(b) Outline the steps the company should follow in the planning, development and implementation of the human resource information system.
Date posted: April 29, 2021. Answers (1)
- Samson Kimani was recently appointed as the finance manager of Bita Chemicals Ltd. He qualified as an accountant one year ago and this is his...(Solved)
Samson Kimani was recently appointed as the finance manager of Bita Chemicals Ltd. He qualified as an accountant one year ago and this is his first managerial position. The finance department is made up of ten members of staff who have been working for the company for several years but since they are not qualified accountants, they were not considered when the appointment was being done. Members of the department are not happy with the appointment as they would have liked someone who has been with the organization for a longer duration and therefore with more experience to have been promoted to that position.
Although Samson is a good accountant, he has a problem relating to people. Consequently, there has been little social contact between him and members of his department.
To overcome his communication problems, Samson has been relying on internal memoranda and placing instructions on the department’s notice board as the main methods of conveying information to his staff. These new methods of communication have not been well received by the staff and have resulted in several complaints being made to the chief finance officer regarding Samson’s inability to effectively communicate with his staff. There has also been a lot of confusion within the department and team spirit is at an all time low.
The chief finance officer has talked to Samson and was able to establish the following as the reasons for Samson’s reliance on written communication only:
To avoid confusion since there is a documented record of his instructions.
When chairing departmental meetings he feels intimidated with so many experienced and older employees and as a result the meetings always end in chaos with no decisions being made.
As a manager in a consultancy firm, you have been approached by the chief finance officer to help Samson improve on his communication skills.
Required:
(a) Explain to Samson why he should use different styles of communication to improve the working relations in his department.
(b) Outline to Samson the guidelines of conducting effective meetings with members of his department.
Date posted: April 29, 2021. Answers (1)
- Quality management is an important strategic issue in an organization. Discus.(Solved)
Quality management is an important strategic issue in an organization. Discus.
Date posted: April 29, 2021. Answers (1)
- Show how delegation of authority in an organization is influenced by the following factors:
a)Chain of command
b)Unity of command
c)Span of control
d)Line and staff relationship(Solved)
Show how delegation of authority in an organization is influenced by the following factors:
a)Chain of command
b)Unity of command
c)Span of control
d)Line and staff relationship
Date posted: April 29, 2021. Answers (1)
- “For any manager to be effective in the change process, he must own the process”
Discuss this statement with regard to a manger as an agent...(Solved)
“For any manager to be effective in the change process, he must own the process”
Discuss this statement with regard to a manger as an agent of change.
Date posted: April 29, 2021. Answers (1)
- What criteria can an organization use for allocating resources to different departments?(Solved)
What criteria can an organization use for allocating resources to different departments?
Date posted: April 28, 2021. Answers (1)
- Effective allocation of the resources of the organization is essential for strategy implementation. Discuss.(Solved)
Effective allocation of the resources of the organization is essential for strategy implementation. Discuss.
Date posted: April 28, 2021. Answers (1)
- Describe the basis upon which consumer markets could be segmented, highlighting the reasons(Solved)
Describe the basis upon which consumer markets could be segmented, highlighting the reasons
Date posted: April 28, 2021. Answers (1)
- Differentiate between consumer markets and industrial markets(Solved)
Differentiate between consumer markets and industrial markets
Date posted: April 28, 2021. Answers (1)
- Informal groups develop spontaneously as employees interact in the work place.
a) Analyze the operations of informal groups indicating their benefits to an organization
b) Explain the...(Solved)
Informal groups develop spontaneously as employees interact in the work place.
a) Analyze the operations of informal groups indicating their benefits to an organization
b) Explain the disadvantages of informal groups
Date posted: April 28, 2021. Answers (1)
- One of the departments of Block Industries Ltd. is headed by a manager who is responsible for approximately 50 professionally qualified staff, plus ancillary workers....(Solved)
One of the departments of Block Industries Ltd. is headed by a manager who is responsible for approximately 50 professionally qualified staff, plus ancillary workers. Section heads look after groups of between four and seven members of staff.
The previous manager was keen, understanding and strict; he closely observed performance, weaknesses and strengths of each staff member. He commended what he observed.
The services offered by Block Industries Ltd were efficient and highly regarded. Staff used to take part in many discretionary activities such as involvement in public affairs and voluntary unpaid overtime work.
A year ago, a new manager was appointed. The new manager, trained in a famous business school, appears to be cold and aloof. He immediately promoted two section heads to be assistant managers, one in charge of public relations, the other in charge of administration to be responsible for the newly introduced weekly performance reports and briefing meetings.
Since the appointment of the new manager, 30% of the staff have left the organization and the rest have gradually ceased all their discretionary activities. There is now a policy of positive non co-operation adopted by employees.
Required:
a) In you own words, briefly analyze the human resources problems facing Block Industries Ltd.
b) Identify five causes that might have led to the prevailing situation and suggest the ways in which the situation can be corrected.
Date posted: April 28, 2021. Answers (1)
- Business process re-engineering affects the way in which work is undertaken in an organization.
Explain this effect as it relates to:
a) Employees’ behaviour.
b) Work structure.(Solved)
Business process re-engineering affects the way in which work is undertaken in an organization.
Explain this effect as it relates to:
a) Employees’ behaviour.
b) Work structure.
Date posted: April 28, 2021. Answers (1)
- Identify five environmental factors that affect business and explain the way in which each factor influences the marketing mix of an organization.(Solved)
Identify five environmental factors that affect business and explain the way in which each factor influences the marketing mix of an organization.
Date posted: April 28, 2021. Answers (1)
- In recent years, many business leaders have considered the viability of forging strategic alliances with other organizations with whom they share common objectives.
Explain the benefits...(Solved)
In recent years, many business leaders have considered the viability of forging strategic alliances with other organizations with whom they share common objectives.
Explain the benefits that may accrue to organizations from forging strategic alliances
amongst themselves.
Date posted: April 28, 2021. Answers (1)