Evaluation of the impact of suppliers' customer service on Hong Kong tertiary institutions' buying decisions : a case study of micro-computer purchase in the tertiary institutions

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Evaluation of the impact of suppliers' customer service on Hong Kong tertiary institutions' buying decisions : a case study of micro-computer purchase in the tertiary institutions

 

Author: Yuen, Sum-tin
Title: Evaluation of the impact of suppliers' customer service on Hong Kong tertiary institutions' buying decisions : a case study of micro-computer purchase in the tertiary institutions
Degree: M.B.A.
Year: 1993
Subject: Universities and colleges -- China -- Hong Kong -- Finance
Purchasing -- Case studies
Microcomputers -- Purchasing -- Case studies
Hong Kong Polytechnic -- Dissertations
Department: Dept. of Management
Pages: iii, 221 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1150941
URI: http://theses.lib.polyu.edu.hk/handle/200/181
Abstract: Purchasing and supply is a potential area for cost saving in organizations through negotiation and better sourcing. The annual expenditure on equipment in Hong Kong's tertiary institutions is in excess of HKS162 million. (Appendix 1).*(1) Hence this is a potential area for cost saving. These institutions are facing the dilemma of, on one hand providing more higher educational opportunities for Hong Kong students and on the other, achieving this objective with reduced financial resources from government. Apart from cost cutting plans, management in Hong Kong tertiary institutions has to look for additional areas of cost saving to achieve the target without affecting the quality of education. Expenditure on equipment purchases is one of the areas that can contribute to such cost saving. This project report attempts to discover Hong Kong tertiary institutions' buying decision patterns. The study also seeks to examine the impact of customer service on Hong Kong tertiary institutions. The overall approach in the study is summarized below: Firstly, using an incremental approach to identify Hong Kong tertiary institutions' buying decision patterns; the cost and effectiveness of customer services by suppliers on the tertiary institutions. Secondly, once the customer services by suppliers have been found contributing cost and effectiveness to Hong Kong tertiary institutions, then use the "Programme Analysis" technique to evaluate the tertiary institutions' "Supplier's Performance Evaluation System" to identify the existing or expected cost and time saving. Thirdly, If the tertiary institutions had been found not using "Supplier's Performance Evaluation System" to evaluate suppliers' performance, then introduce the model of "Programme Analysis" to evaluate suppliers performance. This is intended to achieve the purpose of cost and time saving contributed from the effective customer service by suppliers. Finally, when the outcomes in all the previous stages had been found with customer services by suppliers not contributing cost and time saving to Hong Kong tertiary institutions, then identify what other factors can contribute cost and time saving to Hong Kong tertiary institutions. In the study, it is hypothesized that "Effective Customer Service By Suppliers Contributes Cost and Time Saving to Hong Kong Tertiary Institutions." The study aims at answering the following primary research questions which are the focus of investigation. These are namely: 1. Do effective customer services by suppliers contribute cost and time savings to Hong Kong tertiary institutions' buying decisions? 2. If effective customer services by suppliers do contribute cost and time savings to Hong Kong tertiary institutions' buying decisions, then A. Evaluate the existing cost and time impact of customer services by suppliers to Hong Kong tertiary institutions' buying decisions. B. Evaluate the expected cost and time impact of customer services by suppliers to Hong Kong tertiary institutions' buying decisions. C. Evaluate the difference between the existing and expected cost and time impact of customer services by suppliers to Hong Kong tertiary institutions' buying decisions. 3. If effective customer services by suppliers do not contribute cost and time savings to Hong Kong tertiary institutions' buying decisions, then identify what other factors have impact as well as contributing cost and time saving to Hong Kong tertiary institutions. The study was conducted by using micro-computers purchases as a case study in seven Hong Kong tertiary institutions. Questionnaires were sent to both the purchasing and supply departments of the Finance Officers and the Central Computer Centres in these tertiary institutions. The study has resulted in the following findings which are useful to anyone wishing to conduct further research. These are namely: (i) The buying decision-making patterns in Hong Kong tertiary institutions were found in the following sequence; both buyers and users first considered customer services rendered by suppliers at pre-sales and after-sales stages of micro-computers. They would then considered micro-computers' quality; and finally the lowest price offers. (ii) Effective customer services by suppliers were found to influence Hong Kong tertiary institutions' buying decisions and led to awarding of repeat orders to suppliers. (iii) Effective customer services by suppliers were found to contribute cost and time saving to Hong Kong tertiary institutions. (iv) Both buyers and users in Hong Kong tertiary institutions were found very often to undertake pre-discussion before negotiating with suppliers. (v) "Availability of Funds" and "High Price" were found to be the major constraints affecting Hong Kong tertiary institutions' buying decisions for micro-computer purchases. (vi) In joint decision-making process, users in Hong Kong tertiary institutions were found to possess a greater power and bigger say than buyers in final decision-making. (vii) Majority of Hong Kong tertiary institutions were not using "Suppliers' Performance Evaluation System"; however, they preferred to use such system to evaluate suppliers' performance. (viii) The respondents thought that "Suppliers' Performance Evaluation System" would be a useful tool for buying decision-making because such system would generate benefits of better decision-making analysis; better service rendered by suppliers; better negotiation power, and better discounts obtained. It contributed cost and time savings to Hong Kong tertiary institutions. (ix) Hong Kong tertiary institutions were found to be using a wide variety of different brands of micro-computers. This was a potential area for cost saving when the existing variety of micro-computer brands were reduced and standardised to only one or two brands. (x) The major factors affecting micro-computer purchase for both buyers and users in buying decision-making were found to be price, computer quality, customer service and standardization with the existing micro-computer in use. These findings conform with my notion that "Effective Customer Services By Suppliers Contribute Cost and Time Saving to Hong Kong Tertiary Institutions' Buying Decisions." Finally, the project report recommended greater cost and time savings could be achieved through combined equipment purchases incorporated with "Suppliers' Performance Evaluation System" for all seven tertiary institutions than institutions individually purchasing their own equipment. *(1) This figure excludes equipment expenditure from Hng Kong Baptist College, Chinese University and Lingnan College because their data are not available.

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