Contribution Of Purchasing To The Organizational Objective Of A Small Scale Business
(A Case Study Of Christian Provision Store)
Purchasing, within the context of a small-scale business, plays a fundamental role in shaping and achieving organizational objectives. It encompasses a diverse set of activities, ranging from sourcing raw materials to negotiating favorable terms with suppliers. The strategic procurement of goods and services significantly impacts cost efficiency, supplier relationships, and overall operational effectiveness. Effectively managing the procurement process ensures that the business obtains quality inputs at competitive prices, thereby directly influencing financial sustainability. Additionally, adept purchasing practices contribute to inventory control, fostering a streamlined supply chain that minimizes waste and enhances productivity. Furthermore, by staying attuned to market dynamics and incorporating innovative procurement strategies, small-scale businesses can establish a competitive edge. Ultimately, the judicious handling of purchasing activities is pivotal in aligning the business with its objectives, promoting resilience in a dynamic market, and fostering sustainable growth.
Title page
Approval page
Dedication
Acknowledgement
Abstract
Table of content
List of tables
CHAPTER ONE
1.0 Introduction
11 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Research question
1.5 Significance of the study
1.6 Scope of the study
1.7 Limitation of the study
1.8 Definition of terms
CHAPTER TWO
2.0 Literature review
2.1 Introduction
2.2 Meaning of small scale business
2.3 Objective of small scale business
2.4 What is purchasing
2.5 The objectives of purchasing
2.6 Functions of purchasing in a organization
2.7 Contribution of purchasing in an organizational objectives
2.8 Purchasing contribution to business performance of a (small scale business)
CHAPTER THREE
3.0 Research design and methodology
3.1 Introduction
3.2 Research design
3.3 Sources/ methods of data collection
3.4 Population and sample size
3.5 Sample technique
3.6 Validity and reliability of measuring instrument
3.7 Method of data analysis
CHAPTER FOUR
4.0 Presentation and analysis of data
4.1 Introduction
4.2 Presentation of data
4.3 Analysis of data
4.4 Interpretation of result
CHAPTER FIVE
5.0 Summary, conclusion and recommendations
5.1 Introduction
5.2 Summary of findings
5.3 Conclusion
5.4 Recommendation
References
Appendix
1.0 INTRODUCTION
The small scale business of (Mr Christian provision stored) is located at Okigwe Road Owerri in Imo state.
The small scale business was established on March 18th 2009 by Mr Christian Ibekwe .A.
At present, the business has about (3) three employees.
(1) Sales lady
(2) Cashier
(3) An apprentis (boy)
This business performs some function which include
(1) Supplying to the final consumers
(2) Employment to people
According to (Mr Christian Ibekwe .A.) he further confirmed that these business of his has helped him in so many ways.
He started with the sum of N5,000 as capital but now he can boast of N500,000 (five hundred thousand naira) at present. He further advised the unemployed youths that is better to start as an entrepreneur than stay ideal “ An ideal man is the devil’s workshop”
1.1 BACKGROUND OF THE STUDY
Every organization be it private or public is established to meet some needs, while some are established for economic purpose, others for political or social needs.
Small scale business in no doubt is an important aspect of entrepreneurship.
It is to note that entrepreneurship in Nigeria is not a new course because it has gained ground over the years.
Small scale business are being credited with being responsible for the majority of innovations s much that small scale business has been called the innovations
“ ENGINE OF THE ECONOMY”
Small scale business varies, it varies in terms of time from one place to the other. However no matter the kind of definitions given for small scale business the criterias are usually:-
(1) Size of the employees
(2) Sales of capital invested
(3) Size of paid employees
(4) Combination of any of the above
(5) Any business that employees 50 below is regarded as a small- scale business.
Krectner (1995:62) Defines small scale business as a independently business owned and managed profit seeking enterprise with fewer than 100 employees.
1.2 STATEMENT OF PROBLEM
Effective small scale business as earlier mentioned is necessary for the organizational goals.
Not all business is a success, many things has contributed to the failure wind- up and folding up of many small scales business like:-
(1) Lack of managerial experience
(2) Wrong business decisions
(3) Poor management
(4) Adverse government fiscal and monetary policies
(5) Lack of knowledge and experience in children line of business
(6) Financial problem
(7) Fraudulent activities
(8) Poor business location
(9) Competitions
(10) Swift towards modern technology
All these are problems that can make a business fail. If there is no improvement I anyway the business will definently collapse.
1.3 OBJECTIVE OF THE STUDY
It should be realized that sine small scale business is important to both purchasing and supply and entrepreneurship management, purchasing department should be economical in it’s performance and it’s primary aim is to improve profit.
The objectives of the study should be summarize as follows:-
(1) To highlight the contribution of purchasing towards the objectives of a small scale business
(2) To indicate the relevance of purchasing in small scale business
(3) To examine infrastructure needs for effective small scale business.
1.4 RESEARCH QUESTIONS
(1) How does purchasing contribute of the organizational objective of small scale business
(2) What are the basic things needed for the establishment of a small scale business
(3) Does inefficient supply function affects the performance profitability of a small scale business?
1.5 SIGNIFICANCE OF THE STUDY
This project is of great importance to me in the sense that I have acquire so much knowledge based on the subject matter and also for he benefit of others that might find this project relevant for their research or for orientation purpose.
It is also for the benefit of managers, bankers, e.t.c for the execution of their job/ obligations. It will be useful to government and organization policy marketer’s as this will be the basis of formulating sound and operating decisions.
1.6 SCOPE OF THE STUDY
The span of this research cut across the roles of small scale business and also the contribution of purchasing to organization which small scale business in included.
The contribution of small scale business to the economy has helped a lot like employment has helped somany youths to have something doing, and that is a big one to the nation.
1.7 LIMITATIONS OF THE STUDY
In view of the nature of the topic under the study, could not cover much area as necessary, besides these were other factors that also incapacitated the researcher. They include:-
(1) TIME CONSTRAINT
The research could not easily reach the necessary organizations for references and inquiring as most of time were being dedicated to academic work loads.
(2) FINANCIAL CONSTRAINTS
Due to lack of insufficient availability of money, the sources of information including the internet café was inaccessible
(3) Lack of related information from journals
(4) Unwillingness and poor responses from the staff of the sample forms.
1.8 DEFINITIONS OF TERMS
Small scale business according to Leslie. E. Palich (2008) defines small scale business as a business that is privately owned and operated with a small number of employees and relatively low volume of sales.
INDUSTRIALIZATIONS: The establishment of small and medium scale business in any nation will facilitate the growth and development of that country, it is believe that this type of business is the engine room for development.
MOBILIZATION: The small business are suitable for mobilization/ mobilizing savings for productive purpose which may not be readily available.
ADAPTABILITY: The small business can easily adapt to their business environment because of their unique nature.
Contribution Of Purchasing To The Organizational Objective Of A Small Scale Business
Purchasing plays a crucial role in the success of small-scale businesses by contributing to their organizational objectives in various ways. Here are some key contributions:
- Cost Management:
- Cost Reduction: Effective purchasing practices can help small businesses identify cost-saving opportunities, negotiate favorable terms with suppliers, and secure competitive pricing for goods and services. This contributes to the objective of cost reduction and improved profitability.
- Budget Control: Purchasing helps in managing and controlling the budget by ensuring that expenses related to procurement are well-planned and within the allocated budget.
- Quality Assurance:
- Supplier Selection: Small businesses can achieve their organizational objectives related to product or service quality by carefully selecting suppliers who offer high-quality goods or services.
- Product Consistency: Consistent and reliable suppliers contribute to maintaining the quality and reliability of the business’s offerings, leading to customer satisfaction and repeat business.
- Supply Chain Efficiency:
- Timely Delivery: Effective purchasing ensures timely delivery of materials and supplies, reducing production delays and inventory holding costs.
- Inventory Management: Proper procurement practices can help optimize inventory levels, preventing overstocking or stockouts, which can lead to cost savings and improved customer service.
- Risk Management:
- Supplier Diversification: Small businesses can mitigate risks by diversifying their supplier base. Purchasing departments can identify alternative suppliers to ensure business continuity in case of supply chain disruptions.
- Contractual Agreements: Carefully negotiated contracts with suppliers can include provisions for risk-sharing and penalties for non-performance, reducing the organization’s exposure to potential losses.
- Strategic Sourcing:
- Market Analysis: Purchasing teams can conduct market research to identify new suppliers, products, or technologies that align with the organization’s strategic objectives, such as expansion into new markets or the introduction of innovative products.
- Vendor Relationships: Building strong relationships with key suppliers can lead to collaboration opportunities, favorable terms, and access to industry insights.
- Compliance and Ethics:
- Regulatory Compliance: Purchasing professionals ensure that all procurement activities adhere to relevant laws and regulations, reducing the risk of legal issues that could harm the business.
- Ethical Sourcing: By promoting ethical sourcing practices, such as fair labor and environmental standards, small businesses can align their objectives with social responsibility and sustainability goals.
- Cost-Effective Procurement Technology:
- Leveraging procurement software and tools can streamline purchasing processes, reduce administrative costs, and improve overall efficiency.
In summary, purchasing contributes significantly to the organizational objectives of small-scale businesses by managing costs, ensuring product quality, optimizing the supply chain, mitigating risks, and supporting strategic goals. Effective procurement practices can directly impact the bottom line and the long-term success of the business.