SUPPLIER RELATIONSHIP MANAGEMENT AND THE PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES IN NAIROBI CITY COUNTY, KENYA

Procurement and Logistics

The study seeks to determine the influence of supplier relationship management on the performance of micro, small and medium enterprises in Nairobi City County. The objectives included to determine the influence of supplier relationship management practices, supplier base segmentation, supplier performance management, supplier communication, and supplier integration on performance. The study is anchored on resource-based theory, transaction cost economics theory, communication accommodation theory, network theory and the supplier relationship management model. The study employed a cross-sectional survey approach and mainly concentrated on 5,594 micro, small and medium enterprises in Nairobi City County that are listed under AGPO. The respondents were chosen based on the sample frame. The heads of procurement department in each of the firms were employed as unit of analysis. The primary data were collected through self-administered questionnaires. Statistical Package for the Social Sciences (SPSS version 28) was used to analyze the data. The Cronbach’s Alpha value was greater than 0.7 which indicated that the questionnaire met the minimum acceptable threshold. The study findings showed that supplier relationship management practices namely supplier base segmentation, supplier performance management, supplier communication and supplier integration significantly influence the performance of MSMEs in Nairobi City County, Kenya. The study concluded that performance was predicted to improve for every unit increase in these practices. The study further recommends that MSMEs should diversify their customer base to reduce dependency on a single client. Some recommendations include through market research and targeting, proactive sales and marketing efforts, leveraging existing relationships, flexible pricing, and building brand recognition.

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