Factors Influencing Buyer Supplier Relationships on Supply Chain Performance of Foreign Based Development Agencies in Kenya

Abstract

This study established the primary objective; factors that influence buyer supplier relationships on supply chain performance of foreign based development agencies in Kenya. It was guided by the specific objectives: buyer-supplier trust, buyer-supplier dependence, buyer-supplier commitment, buyer-supplier cooperation, buyer-supplier communication, foreign based development agencies performance and supply chain integration. It was anchored on trust theory, dependency theory, social exchange theory, transaction cost theory, communication theory and network theory. The study followed descriptive research design and used primary data obtained from 37 foreign-based development agencies in Kenya. With the help of 10 research assistants who had knowledge about the topic, the study targeted 111 respondents from management level who included senior managers, procurement officers and accountants in the general affairs division of foreign-based development agencies in Kenya. The data was obtained using structured and semi-structured questionnaires administered through drop and pick later after two weeks and where necessary an extension was given to give humble time to respondents. Four out of thirty seven agencies were targeted for the pilot study where 11 fully completed questionnaires from respondents were obtained and analyzed, obtaining a Cronbach alpha of 0.712. The actual data used in the study considered 33 organizations with 96 fully completed questionnaires obtained from respondents. The data was coded and summarized in excel spreadsheets and analyzed using SPSS version 24.0. The study employed two regressions, the first one with actual data and the second one with each of the predictor variable data as product of corresponding regression data. The hypotheses were tested at five percent significant level. Overall, the study results determined that there was a positive, moderately weak relationship between buyer supplier relationship and the performance of the foreign-based development agencies in Kenya with R and R-Square equal to 0.599 and 0.359 respectively. According to the coefficients for the individual factors, buyer-supplier commitment and communication were statistically significant at 5% level of significant. Notably, buyer-supplier trust coefficient was positive but not statistically significant at 95% confident level. This implied positive causation but was statistically insignificant at 95% confident level. Buyer supplier dependence and Buyer supplier cooperation had negative influence on Foreign based development agencies performance because the coefficients were negative but not statistically significant at 5% level indicating a weak relationship. The test for buyer supplier integration and foreign based development agencies performance indicated that moderation had positive influence and it enhanced performance as shown by the rise in value of R and R-Square to 0.653 and 0.426 respectively. Also, there was increase and reduction in p-values for some of the predictors to the extent that some like commitment variable became statistically insignificant. The study concluded that buyer-supplier relationship had a positive, moderate causation on foreign based development agencies performance. In addition, the study concluded that supply chain integration had a positive influence on the buyer supplier relationship and hence performance of an organization. Further, the study concluded that buyer supplier trust, buyer supplier cooperation and buyer supplier communication were important and did influence the performance of agencies positively. On the other hand buyer supplier dependence had negative influence on organization performance. To agencies, the paper recommends strong buyer supplier relationships with emphasis on buyer supplier trust, buyer supplier cooperation, buyer supplier communication and supply chain integration. Further studies could focus on impact of buyer-supplier asymmetries in relation to buyer supplier trust, buyer supplier dependence, buyer supplier commitment, buyer supplier communication and buyer supplier cooperation on foreign based development agencies performance.