Buyer seller relationship level, negotiation and performance in transport logistics firms in Mombasa County

Abstract

How firms manage buyer supplier relationship levels is increasingly critical to firms' operational efficiency, product development, profitability and long-term prosperity, and is becoming a key issue in organizational performance. In today’s competitive world, businesses progressively see the supply chain activities as vital contributor to their firm performance. A dependable procurement system is one created to improve accuracy, efficiency, effectiveness and speed. The general objective of the study was to investigate the moderating effect of negotiation on the buyer seller relationship level and performance in transport logistics firms in Mombasa County. The specific objectives of the study were; to assess the effect of adversarial pairing relationship level, barometric relationship level, complementary relationship level and moderating effect of negotiation and performance in transport logistics firms in Mombasa County. This study employed the social exchange theory, negotiation theory, transaction cost theory and the buyer supplier optimization theory. The study used explanatory research design to explain the causal relationship between independent and dependent variables. The target population was 188 transport logistics firms in Mombasa County. Yamane sampling formula was used to generate a sample size of 127 transport logistics firms. Primary data was collected by using a structured questionnaire, due to its ability to be easily analyzed. Reliability was tested using Cronbach alpha test while validity was tested using the KMO and Bartlett’s test. Data was analyzed by both descriptive and inferential statistics. Descriptive statistics included percentages, frequencies and means. Inferential statistics were the correlation analysis and moderated multiple regression analysis. The correlation results indicated that adversarial relationship level (r2 .285, p=.001), barometric relationship level (r2=.452, p=.000), complementary relationship level (r2=.439, p=.000) and negotiation (r2=.609, p=.000) had positive and significant correlation with performance. The moderated regression results indicated that adversarial relationship level (β=.564, p=.004), barometric relationship level (β=.285, p=.001), complementary relationship level (β=.159, p=.049) all had positive and significant relationship with performance. This study concluded that adversarial relationship level, barometric relationship level and complementary relationship level have positive and significant effect on performance of transport logistics firms. Further, this study found out that negotiation significantly moderated buyer seller relationship level and performance. This study concluded that adversarial relationship level, barometric relationship level, complementary relationship level have significant effect on firm performance while negotiation positively moderated the relationship. This study recommended that managers should improve on adversarial relationship level, barometric relationship level, complementary relationship level and negotiation to increase firm performance.