INFLUENCE OF STRATEGIC PROCUREMENT PRACTICES ON SUPPLY CHAIN PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES: MEDIATING ROLE OF ORGANISATIONAL CULTURE

Abstract

Supply chain performance has emerged as a critical determinant of business success in today's globalized economy. Despite its importance, supply chain performance remains a significant challenge for many SMEs. The purpose of this study was to assess the influence of strategic procurement practices on supply chain performance. The study specifically sought to establish how strategic sourcing, buyer-supplier collaboration, and supply chain integration influence supply chain performance of small and medium enterprises (SMEs) with a focus on the mediating role of organizational culture. The study adopted cross-sectional survey research design. The target population for this study was 45,969 SMEs across various sectors including manufacturing, wholesaling, retailing and services providers. The study determines the sample size that represent the population using Dillman’s (2014) sample size formula, to mitigate the sample size error, an additional 30% was added (Israel,2013) resulting in a final sample size of 450 respondents. The study used primary data which was collected using questionnaires. A Partial Least Squares Structural Equation Modelling (PLS-SEM) approach was employed to analyse data collected from SMEs. The results indicate that both strategic sourcing and buyer-supplier collaboration significantly and positively influence supply chain performance. In contrast, supply chain integration did not exhibit a significant direct effect on performance, highlighting potential challenges SMEs face in achieving full integration. Furthermore, the findings reveal that organizational culture mediates the relationship between strategic sourcing and supply chain performance, as well as between buyer-supplier collaboration and performance, emphasizing the importance of a strong internal culture for effective supply chain management. However, organizational culture was not found to mediate the link between supply chain integration and performance. This research contributes to the literature on SME supply chain management by offering a nuanced understanding of how organizational culture influences strategic supply chain initiatives, ultimately leading to improved performance. The study concluded that by focusing on strategic sourcing and cultivating strong buyer-supplier collaborations while nurturing an organizational culture that supports these strategic endeavours, small and medium enterprises (SMEs) can substantially improve their supply chain performance and gain a competitive advantage in an increasingly complex market environment.