Effect of supplier relationship management practices on organizational performance of supermarkets in Kenya: a case of Naivas supermarkets in Nakuru County

Abstract

The study’s primary goal was to establish the effect of supplier relationship management on organizational performance of Naivas supermarkets, Nakuru County. For companies to be well established, they must focus on creating closer connections with other organizations so as to attain competitive advantage and have a better place in the market. This has made organizations develop the urgency to have lasting relationships with suppliers with the intention of increasing SC performance. This research sought to understand whether information sharing, buyer-supplier trust, supplier collaboration and supplier commitment positively contribute to organizational success and how they affect performance. SRM practices are known to make organizational performance better however, there’s limited empirical evidence on their specific impact within supermarkets in Kenya, which presents a research deficiency that the research desired to fill. The investigation was directed by these specific objectives; to examine the effect of information sharing on the organizational performance of Naivas supermarket, to determine the effect of buyersupplier trust on the performance of Naivas Supermarket, to determine the effect of supplier collaboration on the organizational performance of Naivas Supermarket and to examine the effect of supplier commitment on the performance of Naivas Supermarket in Nakuru county. The theories adopted were social exchange theory, commitment trust theory of relationship marketing and resource-based theory. The method employed in this investigation was descriptive research design. The target population was 82 respondents working at the seven Naivas supermarket branches in Nakuru county. This study adopted random sampling method. The study made use questionnaires and interviews as methods of collecting data. The questionnaires were issued to 82 respondents but only 70 were filled and returned. Interviews were conducted with top employees in the supermarkets. The data collected was according to each objective. Descriptive statistics i.e. standard deviation and mean as well as inferential statistics i.e., a Pearson’s correlation analysis as well as a regression analysis were employed in this study for interpretation of the findings and the results. Data analysis was done by the use of Microsoft excel Data analysis tool as well as SPSS. The results were displayed through tables. The first objective results showed that there’s a positive relationship between information sharing and organizational performance (r= .373, p value=0.001). According to the results of the second objective, it is implied that there’s a positive correlation between buyer-supplier trust and organizational performance (r=.369, p value= 0.001). The findings from the third objective indicated a significant positive relationship between supplier collaboration and organizational performance (r=.455, p value=0.000). The fourth objective’s results showed that there’s a strong positive correlation between supplier commitment and organizational performance (r= .489, p value= 0.000). The study concluded that Naivas supermarkets in Nakuru consider practicing the objectives as this will lead to increased performance. The study recommends that it is important to have training programs for all involved and the service users have to be informed about the practices and decisions that are related to supplier management. This study also recommends that the supermarkets should work more collaboratively with logistics providers.