Upstream Supply Chain Coordination on Performance of Zimbabwean Agro Processing Sector: A Transaction Cost Theory Approach

Judith Charumbira, Florance Shumba, George Shava and Mlisa Jasper Ndlovu
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Judith Charumbira: Lecturer in the Department of Marketing, National University of Science and Technology, Bulawayo.
Florance Shumba: Lecturer in the Department of Accounting, National University of Science and Technology, Bulawayo
George Shava: National University of Science and Technology, Bulawayo.
Mlisa Jasper Ndlovu: Lecturer in the Department of Business Management, National University of Science and Technology, Bulawayo.

International Journal of Research and Innovation in Social Science, 2022, vol. 6, issue 3, 164-175

Abstract: The purpose of the study was to establish the effect of trust, communication and relationship transaction-specific investments on the coordination of upstream supply chain activities and assess its impact on the performance of the Zimbabwean agro-processing sector. The conceptual framework of the study was drawn from Williamsons’ (1975, 1985) transaction cost theory of coordination and seven hypotheses were developed. The study adopted a cross-sectional survey of the Zimbabwean agro-processing sector. Data were collected from fifty-nine stratified randomly sampled Zimbabwean agro-processing organisations and twenty purposively sampled supplier organisations. A self-administered questionnaire containing 7 points Likert scale ranging between (1) representing strongly disagree and (7) representing strongly agree was used. Descriptive statistical measures were used to analyze and present the quantitative data leading to the formulation of a theoretical model which was tested using structural equation modelling. From the model five hypothesis affect supply chain coordination i.e.; trust among supply chain players has a positive influence on supply chain coordination, communication has a positive influence on supply chain coordination, supply chain coordination has a positive impact on organisational performance, trust among supply chain players has a positive impact on organisational performance and transaction-specific investments have a positive impact on organisational performance. However, the study revealed that transaction-specific investments do not influence supply chain coordination while communication has no impact on organisational performance. The study, therefore, concluded that trust and communication among supply chain players have a positive influence on supply chain coordination. The findings also conclude that supply chain coordination, trust among supply chain partners and transaction-specific investments have a positive impact on organisational performance.

Date: 2022
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