Effect of procurement risk management processes on procurement performance in crude oil supply projects
A case study of Tanzania petroleum development corporation (TPDC)
Abstrak
Crude oil supply projects are capital-intensive and exposed to supplier, logistical, regulatory, and market uncertainty, yet it is unclear how structured procurement risk management affects procurement outcomes in Tanzania’s crude oil supply projects. This study examined the effect of four procurement risk management processes that include risk identification, assessment, mitigation, and monitoring on procurement performance in crude oil supply projects at the Tanzania Petroleum Development Corporation (TPDC). A quantitative, cross-sectional survey design informed by agency theory was adopted. Structured questionnaires were administered to a stratified random sample of 124 TPDC employees drawn from risk management, procurement, internal audit, legal, and upstream functions, yielding 101 usable responses (82%). Data were analyzed in IBM SPSS version 27 using descriptive statistics, Pearson correlation, and multiple linear regression. All four processes had positive and statistically significant effects on procurement performance, supporting the four hypotheses. Risk identification had the strongest effect, followed by risk assessment, risk mitigation, and risk monitoring. Together, the processes explained 84.8% of the variance in procurement performance. The results suggest that early, systematic identification and assessment of risk offer the greatest potential for improving procurement performance, while mitigation and monitoring play complementary roles. The study is limited by its single-organization setting and reliance on self-reported perceptions, and further research in other state-owned enterprises is recommended.
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