Effect of Supplier Relationship Management Practices on Organizational Performance of Supermarkets in Kenya: A Case of Naivas Supermarkets in Nakuru County

Abstract

Supplier relationship management is managing suppliers and vendors and enhancing strategic partnerships. The study’s goal was to establish the effect of supplier relationship management on organizational performance of Naivas supermarkets, Nakuru County. For companies to be established, they must focus on creating closer connections with other organizations to attain competitive advantage. This has made organizations develop the urgency to have lasting relationships with suppliers with intentions 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 performance. SRM practices make organizational performance better however, there’s limited empirical evidence on their impact within supermarkets in Kenya, which presents a research deficiency that the research desired to fill. The investigation’s objectives included; to examine the effect of information sharing on the organizational performance of Naivas supermarket, to determine the effect of buyer-supplier trust on the performance of Naivas Supermarket, to determine the effect of supplier collaboration on the organizational performance of Naivas Supermarket. The theories were; social exchange theory, commitment trust theory of relationship marketing and resource-based theory. Descriptive research design was employed. The target population was 82 respondents working at the seven Naivas supermarket branches in Nakuru County. A census was employed in this study. The study used questionnaires and interviews. Questionnaires were issued to 82 respondents but only 70 were filled and returned. Interviews were conducted with top employees. Descriptive statistics and inferential statistics were employed for results interpretation. Data analysis was done through Microsoft excel Data analysis tool and SPSS. 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). The second objective results, imply a positive correlation between buyer-supplier trust and organizational performance (r=.369, p value= 0.001). 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 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 decisions that are related to supplier management. This study recommends that the supermarkets should work collaboratively with logistics providers.