Influence of buyer-seller relationships on supply chain performance in the banking industry. A case of co-operative bank of Kenya

Abstract

Several empirical studies conducted support that buyer-seller relationships have a positive effect on a firm‟s financial performance. Firms engaged in long-term relationship with their customers achieve higher profitability and ROI than firms using a transactional approach. The study of buyer-seller relationships and their impact on supply chain management is pertinent for two reasons. To the researcher knowledge there is limited empirical evidence on the effects of buyer-seller relationships on supply chain performance in Kenya. This study sought to fill the exiting research gap on the effects of buyer-seller relationships on supply chain performance in the banking industry in Kenya with references on Co-operative Bank of Kenya. The study adopted a descriptive research design. The target population was 168 employees of Co-operative Bank of Kenya at their head office in Nairobi. The sampling technique employed was stratified random sampling. The sample size of the study was 118 respondents. The study collected both primary and secondary data. Primary data was gathered using semi-structured questionnaires where the respondents were issued with the questionnaires. The study conducted a pilot test to test the reliability of the questionnaires. Descriptive data analysis was used; this included the use of weighted means, standard deviation, relative frequencies and percentages. SPSS version 22 was used to assist in the data analysis. The study findings showed that majority of the respondents indicated that supply chain performance in the banking industry in Kenya is affected to a great extent by buyer-seller trust (54.7%), buyer-seller communication (51.2%), buyer-seller power dependence (65.1%) and buyer-seller cooperation (64%). The study thus concluded that conceptual measures for the outcome of retail supply chain performance consists of both financial and non- financial parameters. The study recommended that banking and financial institutions should establish strong interpersonal relationships, effective communication and active cooperation with the suppliers for the establishment of strong and successful buyer – seller relationships