Supplier Involvement and Organisational Performance of Manufacturing Companies: A Case Study of Mukwano Industries, Kampala-Uganda

TABLE OF CONTENTS

DECLARATION . i

APPROVAL ii

DEDICATION iii

ACKNOWLEDGEMENT iv

LIST OF ACRONYMS v

LIST OF TABLE ix

ABSTRACT x

CHAPTER ONE 1

1.0 Introduction 1

1.1 Back Ground to the study 1

1.2 Statement ofthe Problem 2

1.4 Specific Objectives 3

1.6 Scope ofthe Study 3

1.6.1 Subject Scope / Content 3

1.6.3TimeScope 3

1.7 Significance of the Study 3

1.8 Conceptual frame work 4

1.9 Operational Definition of Terms 4

CHAPTER TWO 5

LITERATURE REVIEW 5

2.0 Introduction 5

2.1 Key variables 5

2.1.1 Supplier involvement 5

2.2 Factors affecting supplier involvement 7

2.2.1 Information sharing 8

2.2.2 Joint decision making 8

2.2.3 Incentive alignment 9

2.3 Level of organizational performance 9

2.4 Relationship between supplier involvement and organizational performance 13

vi

CHAPTER THREE .15

METHODOLOGY 15

3.0 Introduction 15

3.1 Research Design 15

3.2 Study population 15

3.3 Sample Size 15

3.4 Sampling Techniques 16

3.5 Sources ofInformation 16

3,5.1 Secondary Data 16

3.5.2PrimaryData 16

3.6.1 Questionnaire 17

3.6.2 Interviews 17

3.7 Data Analysis 17

3.8 Validity & Reliability 17

3.9 Research Procedure 18

3.10 Limitations 18

3.11 Ethical Procedure 18

CHAPTER FOUR 20

DATA ANALYSIS, RESULTS AND DISCUSSION 20

4.0 Introduction 20

4.1 Response Rate 20

4.1.1 Departments of respondents 20

4.1.1 Position of Respondents 21

4.1.2 Duration of service 22

4.1.3 Age of Respondents 22

4.1.4 Qualification of respondents 23

4.2 Extent of supplier involvement 24

4.3 Level of organizational performance 26

4.4 Significant relationship between Supplier involvement and Organizational performance in

Mukwano Industries 27

VII

CHAPTER FIVE .29

SUMMARY, CONCLUSION AND RECOMMENDATION 29

5.0 Introduction 29

5.1 Summary of Findings 29

5.2 Conclusion 30

5.3 Recommendations 30

5.4 Areas for further Research 31

REFERENCES 32

APPENDIX I: RESEARCH INSTRUMENT 33

APPENDIX II: Table for Determining Sample Size ofa known Population 36

ABSTRACT

The study established the effect of supplier involvement on organisational performance in Mukwano Industries, three specific objectives guided this study and these were; (i) to find out the factors affecting supplier involvement in Mukwano Industries, (ii) to examine the level of organizational performance in Mukwano Industries Ltd, and (iii) to establish the relationship between supplier involvement and organizational performance in Mukwano Industries Ltd. The study adopted and employed a descriptive survey design which determines and reports the way things are. The researcher made use of descriptive research design using both qualitative and quantitative approaches to data collection. The study used a research population of 48 and a sample size of 41. The findings indicated that; the study confirmed that Mukwano Industries has embraced the concept of supplier involvement as it had incorporated most variables in their operations. Mukwano Industries built relationship with its suppliers based on informing sharing, joint decision making and incentive alignment but with most of the emphasis on incentive alignment. This revealed that the supplier involvement was rated high at 2.90, the findings revealed that organizational performance was rated satisfactory and this was indicated by the overall mean of 2.73 and this implies that the Mukwano Industries do the work efficiently and effectively, the findings indicated a positive significant relationship between buyer-supplier relationship and organizational performance in Mukwano Industries, and this was indicated by the sig value of 0.001 which was less than 0.05, this therefore implies that high supplier involvement increases the level of organizational performance, and low supplier involvement reduces it. The researcher concluded that; the linkage between buyer-supplier collaboration and performance is clear in that when manufacturing firms align incentives, jointly make decisions and share information, performance will improve in regard to customer satisfaction, supplier retention and timely deliveries whereby supplier retention 2.86 was found to be the most practiced activity in Mukwano Industries compared to customer satisfaction 2.60 and timely deliveries 2.73. The researcher concluded that Mukwano Industries focused mainly on supplier retention compared to both customer satisfaction and timely deliveries. Also basing on the findings, the researcher concluded that that highly satisfying supplier involvement contributes to organizational performance in Mukwano Industries. The researcher recommended that; Mukwano Industries should make sure that their suppliers are always free to share important information that is of their interest, the researcher recommends that the suppliers should provide them with sales forecasts for the products the company buys from them, still the researcher recommends that the Mukwano Industries should always have joint investments with their suppliers, and Mukwano Industries should make sure that they continue with the purchasing arrangements with most of the suppliers.