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Vendor Selection Risk and Organizational Performance in Corporate Institutions in Taraba State: The Impact of Incompetent External Service Providers

Salim, HamaAdama Saad, Rilwan Aliyu Saad, Umaru Musa

Abstract

This study examined vendor selection risk and organisational performance in corporate institutions in Taraba State, focusing on incompetent external service providers. Specifically, it assessed vendor competence, due diligence, selection transparency, favoritism, and vendor performance monitoring. The study was anchored on Transaction Cost Economics, Stakeholder Theory, and Agency Theory. A survey research design was adopted, using primary data from selected corporate institutions. Logit regression was employed for analysis. Findings revealed that all five vendor selection risk factors had statistically insignificant effects on organisational performance, despite positive and negative relationships. The study concluded that vendor selection risk factors did not significantly influence organisational performance. It recommended strengthening vendor assessment, due diligence, transparency, fairness, and continuous performance monitoring.

Keywords

Vendor selection riskorganisational performancevendor competencedue diligenceselection transparencyfavoritismvendor performance monitoringexternal service providers.

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