1 / 21

Outlines

Title: Factors influencing Coffee Growers’ Perception on Coffee Buyers Opportunism : A Case of Coffee Buyer – Seller Relationships in Tanzania. Outlines. Introduction Theoretical Perspective and hypothesis formulation Research Methodology and Operationalization of Variables

Download Presentation

Outlines

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Title: Factors influencing Coffee Growers’ Perception on Coffee Buyers Opportunism : A Case of Coffee Buyer – Seller Relationships in Tanzania.

  2. Outlines • Introduction • Theoretical Perspective and hypothesis formulation • Research Methodology and Operationalization of Variables • Data Assessment (Preliminary screening, Discriminant validity and Reliability). • Research Model (Regression Model) • Regression Assumptions • Regression Estimation and Hypotheses Testing • Managerial Implications, Limitations and Areas for further Research

  3. Introduction Background information • Main coffee buyers in Tanzania-Primary societies/Associations (KNCU, MBOCU). • Complaints from farmers> buyers no longer offering incentives (fertilizers, insecticides, equipment(CPU) and credits).

  4. Introduction…Ctd. Research Problem • Buyers characterized: lying>insincerity>undervaluation of products. • These behaviors>reflection of buyers’ opportunistic behavior (John 1984; Williamson 1985). Research Question • What is the key factor affecting suppliers’ perception on buyers opportunism?

  5. Introduction…Ctd. Objective of the study • Enhance relationship to reduce perception on buyers opportunism. • Specifically how supplier specific development (investment) affect suppliers’ perception on buyers opportunism.

  6. Theoretical Perspective • A good theory is the best tool in understanding/solving practical business issues (problems). • Transaction Cost Theory (Douma & Schreuder Ch. 8, 2011) >The founder: Ronald Coase>1937: ‘‘Why do firms exist?’’ • What are Transaction Cost? • Control and monitoring costs (e.g. cost documentation) • Bargaining costs (e.g. haggling about terms of trade)

  7. Theoretical Perspective…Ctd. • Transaction Cost is induced when SPI is deployed> It is not possible to avoid this cost>Challenge: Minimize them. • Basic assumptions> Bounded Rationality, Uncertainty/Complexity, Information Asymmetry and Opportunism. • Opportunism: ‘Self seeking with-guile’’ (Williamson 1975; p.6)>Take advantage upon a situation, charge unfair prices, reduce the original product quality.

  8. Theoretical Perspective…Ctd. • Three Basic Elements> Specific Assets, Uncertainty/Complexity of Trade, Frequency or Volume of Trade. • Specific Assets: Investment of Buyer and /or seller in> specific knowledge>routines >machines >tools to serve a specific trade partner (Risky Investment) • SPI are sunk cost (irreversible). • Previous Studies on Opportunism>Focused on Suppliers Opportunism; no studies on Buyers Opportunism.

  9. Research model SALESVOL SUDEV OPPOR REDURA Hypothesized effect Control Effect

  10. Research hypothesis Hints: Transaction-Specific Supplier Development (SUDEV)>‘‘a long term cooperative effort between a buying firm and its suppliers to upgrade the suppliers’’ (Bucklin and Sengupta 1993; Parkhe, 1993). • SUDEV (SPI)-reduce opportunism (Joshi, 1998). • making visit;> discuss issues for performance improvement with respect to grading of my coffee beans; >recognizing farmers’ business for achievements/performance in the form of awards;> providing farm businesses with training/education; >providing farm businesses with equipment or tools for improvement, >providing farmers with credit/capital (Krause and Ellram, 1997; Wagner, 2006). • H1: There is a negative association between transaction-specific supplier development and buyer opportunism.

  11. Research methodology Empirical research setting : Coffee industry in Tanzania • Cross sectional research design Cross sectional research design (Malhotra and Birks, 2006). • Questionnaire Instrument Developing and reviews of questionnaire (adapting items)=>Translation- 2 ways and validation • Sample Size, Data collection procedures and technique More than 400, 000 smallholders.=>Sample=123 each=>Key informants=>Finding the farmer for more than five years=>Personal interview

  12. Operationalization of variables Constructs are operationalized as latent variables and all variables are measured as reflective scales> Variables were operationalized by question items with 7 points likert scale. • The question items for opportunism were adapted from Gundlach et al., (1995); Skarmeas et al., (2002) and Provan and Skinner, (1989). • While question items for Specific Supplier Development (SUDEV) were adapted from Krause (1999) and Ghijsen et al., (2009).

  13. Discriminant Validity • Discriminant Validity: Exploratory Factor Analysis (Table 1.1) Rotated Component Matrix Extracted Principal Component Analysis. Rotated Method: Varimax with Kaiser Normalization. Rotation converged in 3 iterations

  14. Reliability • Reliability: Correctness or exactness>internal consistency >Cronbach alpha (Table 1.2).

  15. Regression Model (Research Model) Regression analysis • Statistical tool used to describe relationship between dependent and independent variables> bivariate (simple)>multivariate (multiple). Regression Model (Research Model) OPPOR = bo +b1REDURA +b2SALESVOL +b3SUDEV+ ԑ

  16. Regression assumptions and Estimation Regression assumptions: • Multicollinearity (Correlation Matrix: OPPOR & SUDEV, REDURA) • Collinearity (Tolerance>0.10, Variance Inflation Factor (VIF)<10) • Normality (Histogram & Normal P-P Plot of Standardized Residual) • Homoscedasticity (Scatter Plot) Regression estimation: • OLS > to estimate parameters of our regression model (Table 1.3)

  17. R2adj=.26 F (7, 65) = 4.54 p<.001 Values for REDURA and SATIS are mean centered scores **p<.05 t- values greater than 1.64 are significant at 0.05 one tail ***p<.01 t-values greater than 2.33 are significant at 0.01 one tail

  18. Hypothesis Testing Hypothesis 1: • supported by coefficient term, b3 = -0.31, t value = -2.67, p ≤0.01.

  19. Discussion, Managerial Implications, Limitations and Areas for Further Research Discussion • Training on :picking>pulping>washing,>fermentation>washing>drying. • Investment on: Machines (CPU)/Tools> Provision of Capital/Credit • Personnel visits to help improve on suppliers performance. • Invite farmers>discuss>performance improvement>grading of coffee beans.

  20. Managerial Implications, Limitations and Areas for Further Research…Ctd. Managerial Implications • Lays out foundation on>stakeholders (buyers) >reduce opportunism. • Frequent communication and well established reporting system>SMS & telephone calls. • Establishment of training centers: seminars, establishing farms for training • increasing follow-up • Frequently>inviting farmers to discuss issues>on performance improvement with respect to grading system of coffee.

  21. Managerial Implications, Limitations and Areas for Further Research…Ctd. • Providing farmers with equipment or tools for improvement. • Providing farmers with credit/capital. • Buyer Organizations should cooperate with supplier when deployment of SUDEV is appropriate/profitable. Limitations and areas for further research • Analyses only coffee industry • Cross sectional design

More Related