SUPPLY CHAIN RISK MANAGEMENT AND PERFORMANCE OF COMMERCIAL STATE CORPORATIONS IN NAIROBI CITY COUNTY, KENYA

Grace Wawuda Mwangene, Dr. Paul Machoka

Abstract


Organizations are recognizing the need to adopt risk management strategies to be able to overcome the turbulence in the market caused by variations in supply chains. This approach can in turn enable the managers, risk analysts and stakeholders to focus on minimizing the potential impact of threats. State corporations are facing challenges related to supply chain disruptions that have affected profitability and lead time. The  general objective of the study was to understand the relationship between  supply chain risk management practices on  performance of commercial state corporations in Kenya . The specific objectives were to examine effect of distribution channel risks and supplier integration risks on performance of  commercial state corporations in Kenya. The study was guided by  resource-based view theory and transaction cost theory. The study adopted a descriptive research design.   The unit of analysis was 46 commercial state corporations in Kenya. The unit of observation was 46 procurement, 46 operations, 46 distribution/logistics, 46 quality assurance, and  46 finance departments managers. Yamane 1967 sampling  formula was used to sample 146 managers . Questionnaires were used to collect data. A pilot was conducted with 10% of the sample hence  15 management staff. The study used content and construct validity. Questionnaire reliability was evaluated using Cronbach’s Alpha Coefficient.  Data was sorted and coded for analysis using Statistical Package for Social Sciences (SPSS) version 24. Data was presented in tables. The content of the questionnaire was validated by the research professionals. In addition, construct validity results show that; AVE for  distribution channel risks is 0.540,  supplier integration risks 0.540, and firm performance 0.552. The reliability test results show that; distribution channel risks (0.889), supplier integration risks (0.897), and performance of state corporations (0.903) which all show acceptable reliability. Regression analysis findings revealed that supplier integration risks had the greatest negative effect (B = -0.410, p = 0.000), followed by distribution risks (B = -0.372, p = 0.000). The study concludes that supply chain risks negatively impact firm performance, with supplier integration and distribution risks being the most critical. To mitigate these risks, firms should enhance supplier management, optimize logistics networks, and adopt agile procurement strategies. Future research should explore other performance determinants, including technology and regulatory frameworks.

Key Words: Supply Chain Risk Management Practices, Distribution Channel Risks, Supplier Integration Risks, Performance, Commercial State Corporations 


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