Contract Management Practices and The Performance of Food and Beverage Manufacturing Firms in Nairobi City County, Kenya

The current supply chain business environment is characterized by increasing uncertainties. Contract management has emerged as an important approach for enterprises to achieve profit and market share objectives by reducing environmental risk experienced due to poor contracting practice adoption. The primary aim of this study was to determine the influence of contract management practices on the performance of food and beverage manufacturing firms in Nairobi City County, Kenya. The research was based on specific objectives, such as contract cost management, contract records management, contract documentation, and contract monitoring on the performance of food and beverage manufacturing firms. Theories, such as the transaction cost economics theory, information processing theory, legal positivism theory, and goal-setting theory, will also guide the study. This study will employ a cross-sectional survey approach, mainly concentrating on 95 food and beverage manufacturing firms in Nairobi City County, Kenya, listed by KAM, 2020. To meet the research objectives, the departmental heads in the procurement department was used as observation units across the firms. The pilot study will target 12 respondents, 10% of the final study sample size, of which respondents was randomly chosen in each firm. The primary data was collected through a self-administered questionnaire that will include open and closed-ended questions designed to obtain definite responses. For this study, the quantitative data collected was analyzed by using SPSS version 28 to calculate the response rate using descriptive statistics, including frequencies, percentages, means, and standard deviations. The study findings showed that contract management practices namely contract cost management, contract records management, contract documentation and contract monitoring significantly influence the performance of food and beverage manufacturing firms in Nairobi City County, Kenya. The study concluded that performance was predicted to improve for every unit increase in these practices. The study further recommends that food and beverage manufacturing firms should ensure budget allocations are made prior to the initiation of any procurement activity. To achieve this, the firms can conduct thorough assessments of procurement needs, analyze historical spending data, forecast future costs based on sales projections and market trends, prioritize expenditures aligned with strategic business objectives, and obtain formal approval from executive management or the budget committee prior to initiating any procurement activities. This will ensure improved contract management practices and improve performance of food and beverage manufacturing firms.