Investigation of how procurement practices influence business survival: analysis of buyer - supplier relationships in Zimbabwe's banking industry

Investigation of how procurement practices influence business survival: analysis of buyer - supplier relationships in Zimbabwe's banking industry

The study of procurement practices influence on business performance sparked interest among many researchers during the last two decades. However, very little literature deals directly with how firms‘ procurement practices influence business performance. Also, most of the reviewed articles on procurement practices are conceptual rather than empirical in nature. As a result, many firms continue to struggle attempting to devise bespoke procurement practices link to overall business performance. It is against this back drop that this research seeks to fill this void by conducting empirical case studies at twenty-eight firms operating in the world worst ever turbulent environment. The results of this research study attempt to determine the interconnection between firms‘ procurement practices and business performance. This study therefore provides critical insights into key drivers of procurement practices in buyer - supplier firms and the effect they have on business performance. As such, the research was titled, 'Investigation of how procurement practices influence business survival: An analysis of buyer – supplier relationships in Zimbabwe‘s banking industry'. To explore the research problem exhaustively, three research questions were examined in this study. The first research question sought to explore firms‘ prevalent perceptions of importance and performance of procurement practices effect on business performance. The second research question sought to ascertain differences and similarities in firms‘ perceived importance and performance of procurement practices effect on business performance. Finally, the third research question sought to identify prevalent gaps within and between firms‘ perceptions of importance and performance of procurement practices effect on business performance.

A combination of case study and survey approaches were used to establish and explore firms‘ perceptions of importance and performance of procurement practices effect on business performance. The targeted respondents for this study comprised of firms senior, functional and first line managers with direct or in-direct involvement or responsibilities with buyer and supplier firms‘ procurement activities. A total of 112 managers, participated in either face-to-face interviews or surveys, and 44 of the managers took part in the face-to-face interviews lasting between 30 and 35 minutes per respondent with at least two managers from each case study organization being interviewed at different times. The same respondents were later asked to participate in completing a self administered survey questionnaire. A further 68 managers were asked to participate in self administered survey questionnaire send to them online bringing the total number of participants involved in the survey to 112. The main research results show that firms‘ procurement practices effect on business performance were interconnected by 28 exhibits of the seven trust attributes which exist within and between firms. Further, the research findings show both similarities and differences in firms‘ perceptions of importance and performance of procurement practices effect on business performance. However, four major gaps were identified as having significant influence on buyer and supplier firms‘ perceptions of importance and performance of trust attributes in procurement practices effect on business performance.

Also, MLOGIT statistical analysis was carried out to test the main hypothesis of this research study showed that firms‘ perceptions of importance and performance of procurement practices effect on business performance was significant (p = 0.03). Further, the test showed that when we adjust for the seven constructs of trust in procurement practices, buyer firms perceptions of importance and performance of procurement practices effect on businesses performance appear to have about 20% (RR = 1.20) higher than that of suppliers firms. However, the difference in firms‘ perceptions of importance and performance of procurement practices in business performance (survival) between suppliers and buyer firms was not significant (P = 0.43).

Also, this research study contributes to the existing research knowledge in the broader area of supply chain management. In reaching a conclusion from reviewed literature and overall research findings, it is suggested that firms‘ procurement practices identified in this research study are broadly classified, as either 'high or low trust procurement practices'. This model is developed based on further insights gained from reviewed literature and the research findings of this study. The 'high trust procurement practices' exhibited a single maturity of the seven attributes of trust in procurement practices while the 'low trust' procurement practices exhibited an immaturity. It is therefore concluded based on the findings of this research study that success or failure of firms‘ procurement practices in influencing business survival is largely dependent on four broad issues: (1) the drivers of procurement practices in firms; 2) interactions within and between key stakeholders involved in firms procurement practices; 3) the firms‘ perceptions of importance and performance of procurement practices effect on business performance and; 4) level of prevalent gaps in point 2 and 3. However, the limitations of this research are also discussed and suggestions made to replicate the findings of this study research in different sectors and economies to establish whether specific conclusions arrived at in this research study are supported under different settings and contexts.