Cause – effect relationship of trust of buyer – suppliers' integration on procurement performance in large manufacturing firms in Tanzania

Abstract

Purpose The purpose of this study was to establish the cause-effect relationship between determinants of trust in the buyer–supplier integration and the procurement performance of large manufacturing firms in Tanzania. Design/methodology/approach The study surveyed 52 firms from Temeke Municipality, Tanzania using questionnaire subjected to one procurement manager and one stores manager tallying a sample size of 104 respondents. Explanatory design was employed due to the presence of cause–effect relationship and the null hypotheses were tested using binary logistic regression technique at p values < 0.05 and ExpB > 1. Findings Mutual goals, geographical vicinity among partners, and supplier reliability are significant for the procurement performance of the manufacturing firms in Tanzania, whereas interpersonal and inter-organizational trusts and perceived buyers’ confidence are of no significant impact. Research limitations/implications Buyer–supplier integration is a recently embraced and paramount practice for the manufacturing firms in Tanzania. Therefore, longitudinal study would further add value. The presence of the causality from the tested hypothesis appeals for the necessity of progress tracking. Practical implications Causality has been established, and a framework has been developed for the performance of large manufacturing firms using trust of buyer–supplier integration. Social implications There shall be creation of more employment opportunities and timely availability of materials from large manufacturing firms in Tanzania. Originality/value Anchored on transaction cost economics and resource dependency theories, the study disclosed the root cause of procurement performance in the context of manufacturing firms in Tanzania whilst considering trust as a resource advantage of buyer–supplier integration.

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