Strategic Procurement Management Practices and Performance of Real Estate firms in Nairobi County, Kenya

Abstract

In Kenya, the real estate industry provided 9.0% of the GDP of the nation in the second quarter of 2020. It also made a large contribution to employment generation and the provision of residential and commercial space. But because of the weak housing market, which is demonstrated by the housing index's progressive and severe decrease in the 2019- 2020 period, real estate enterprises continue to encounter a variety of performance issues. The real estate firms in Kenya have also had challenges of late delivery of the housing projects, poor quality of delivered projects, client funds misappropriations, and legal challenges with their clients. This study sought to examine the effect of procurement management practices on the performance of real estate firms in Nairobi County, Kenya. This study utilized correlational research design. The study’s population was the 100 senior managers of real estate firms in Nairobi County, Kenya. The study utilized a sample size of 50 respondent’s generated using Naissuma coefficient of variation formula. The study collected data using structured questionnaires. The findings indicated that strategic procurement practices have a significant effect on the performance of real estate firms. The study concludes that applying aspects such as supplier optimization dynamics, supplier development and strategic alliances with suppliers is significant in organization performance among firms. The study recommends that supplier development strategies in terms of financial support and training ought to be underscored. The real estate practitioners and investors in the real estate may gain an understanding on the effect of the strategic management practices on the performance of the real estate firms