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DOCTOR OF BUSINESS ADMINISTRATIONDISSERTATIONINVESTIGATION OF HOW PROCUREMENT PRACTICES INFLUENCE BUSINESSSURVIVAL: ANALYSIS OF BUYER - SUPPLIER RELATIONSHIPS IN ZIMBABWE'SBANKING INDUSTRY.Student: Masimba Phillip DahwaMBA, Post grad. Dip, BA (Hons), FCIPS, FCILTSupervisor: Dr Latif Al-HakimSubmitted in partial fulfillment of the award ofDoctor of Business Administration,Faculty of Business, University of Southern Queensland

AbstractThe study of procurement practices influence on business performance sparked interest among manyresearchers during the last two decades. However, very little literature deals directly with how firms‘procurement practices influence business performance. Also, most of the reviewed articles onprocurement practices are conceptual rather than empirical in nature. As a result, many firmscontinue to struggle attempting to devise bespoke procurement practices link to overall businessperformance. It is against this back drop that this research seeks to fill this void by conductingempirical case studies at twenty-eight firms operating in the world worst ever turbulentenvironment. The results of this research study attempt to determine the interconnection betweenfirms‘ procurement practices and business performance. This study therefore provides criticalinsights into key drivers of procurement practices in buyer - supplier firms and the effect they haveon business performance. As such, the research was titled, ‗Investigation of how procurementpractices influence business survival: An analysis of buyer – supplier relationships in Zimbabwe‘sbanking industry. To explore the research problem exhaustively, three research questions wereexamined in this study. The first research question sought to explore firms‘ prevalent perceptions ofimportance and performance of procurement practices effect on business performance. The secondresearch question sought to ascertain differences and similarities in firms‘ perceived importance andperformance of procurement practices effect on business performance. Finally, the third researchquestion sought to identify prevalent gaps within and between firms‘ perceptions of importance andperformance of procurement practices effect on business performance.A combination of case study and survey approaches were used to establish and explore firms‘perceptions of importance and performance of procurement practices effect on businessperformance. The targeted respondents for this study comprised of firms senior, functional and firstline managers with direct or in-direct involvement or responsibilities with buyer and supplier firms‘procurement activities. A total of 112 managers, participated in either face-to-face interviews orsurveys, and 44 of the managers took part in the face-to-face interviews lasting between 30 and 35minutes per respondent with at least two managers from each case study organization beinginterviewed at different times. The same respondents were later asked to participate in completing aself administered survey questionnaire. A further 68 managers were asked to participate in selfadministered survey questionnaire send to them online bringing the total number of participantsinvolved in the survey to 112. The main research results show that firms‘ procurement practiceseffect on business performance were interconnected by 28 exhibits of the seven trust attributeswhich exist within and between firms. Further, the research findings show both similarities anddifferences in firms‘ perceptions of importance and performance of procurement practices effect onbusiness performance. However, four major gaps were identified as having significant influence onbuyer and supplier firms‘ perceptions of importance and performance of trust attributes inprocurement practices effect on business performance.Also, MLOGIT statistical analysis was carried out to test the main hypothesis of this research studyshowed that firms‘ perceptions of importance and performance of procurement practices effect onbusiness performance was significant (p 0.03). Further, the test showed that when we adjust forthe seven constructs of trust in procurement practices, buyer firms perceptions of importance andperformance of procurement practices effect on businesses performance appear to have about 20%(RR 1.20) higher than that of suppliers firms. However, the difference in firms‘ perceptions ofimportance and performance of procurement practices in business performance (survival) betweensuppliers and buyer firms was not significant (P 0.43).i

Also, this research study contributes to the existing research knowledge in the broader area ofsupply chain management. In reaching a conclusion from reviewed literature and overall researchfindings, it is suggested that firms‘ procurement practices identified in this research study arebroadly classified, as either ―high or low trust procurement practices‖. This model is developedbased on further insights gained from reviewed literature and the research findings of this study.The ‗high trust procurement practices‘ exhibited a single maturity of the seven attributes of trust inprocurement practices while the ‗low trust‟ procurement practices exhibited an immaturity. It istherefore concluded based on the findings of this research study that success or failure of firms‘procurement practices in influencing business survival is largely dependent on four broad issues: (1)the drivers of procurement practices in firms; 2) interactions within and between key stakeholdersinvolved in firms procurement practices; 3) the firms‘ perceptions of importance and performance ofprocurement practices effect on business performance and; 4) level of prevalent gaps in point 2 and3. However, the limitations of this research are also discussed and suggestions made to replicate thefindings of this study research in different sectors and economies to establish whether specificconclusions arrived at in this research study are supported under different settings and contexts.Key words: Procurement; practices; trust; performance; important; business; survival;stakeholders; buyer; supplier; case studyii

Certification of DissertationI certify that the ideas, experimental work, results, analyses, software and conclusions reported inthis dissertation are entirely my own effort, except where otherwise acknowledged. I also certify thatthe work is original and has not been previously submitted for any other award, except whereotherwise acknowledged.Masimba Phillip DahwaAugust 11, 2010ENDORSEMENTDr Latif Al-HakimSupervisor--------------------Dateiii

AcknowledgementsI would like to sincerely thank everyone who has stimulated and supported me to pursue andcomplete further studies in an area I have always been passionate about – procurement. I wish toacknowledge the helpful contributions of many people and companies. Without their support, thepast four years of studying would not have been possible for me.Most importantly, I would like to thank Dr Latif Al- Hakim, my research supervisor, for hisindispensable encouragements and his cautious inspiration. I enjoyed the freedom and responsibilityhe bestowed on me to pursue the research my own way. Continually, Latif advised me to considerbroader issues in my area of research and constantly challenged me to ‗think outside the box‘. Isincerely want to thank Latif for his valuable guidance and wisdom, for it was an honor and greatprivilege for me to be supervised by him. Thank you very much Latif.Also, in writing this report a lot of other people‘s work was used. My sincere appreciation to all theauthors of various books, journals and articles and electronic publications read and used andacknowledged in this thesis. I would also thank the management of various banks and suppliers fortaking their valuable time, leaving their busy schedules to participate in the pilot study, interviewsand surveys. Their candid responses were important to the success of the research. There are severalother professional fellows who supported me in various ways, providing inspiration, professionalexperience and friendships. In this respect, I would like to thank Alfred Magudu, Dumisani Ndlovuand Morgan Damba for their support in the early phases of my studies, and my brother HenryKissinger for helping with the proofing.I also wish to thank my wife Netsai for all the support and encouragements she gave me throughoutthe four years of my study. Carrying out this research would not have been possible without hercontinued moral and psychological support when the journey got harder for me particularly in theface of the prevailing political and economic challenges prevalent in my country. At last but notleast, I would like to thank Tendai, Kundai and Matifadza our lovely girls for their infectious zestfor life. I wish to share the excitement and experience of taking my DBA studies with my parentsBetty and Laurence for building confidence in me during my childhood and inspiring me throughtheir words of wisdom that ‗Dzidzo ndiyo pfuma huru‟ meaning ‗Education is a valuable asset inlife‘. I took heed of their words of wisdom and wish to thank them for raising me up the way theydid.iv

DedicationWords of wisdom to my lovely daughters Tendie, Kundie and Matie – “Success is God granted butnot guaranteed, you must do your bit to achieve it”v

EITTRFQRFPSPQQPPMSCIPSSMFMPTLOPTLANOVAAutomated teller machineBlack Empowerment ProgramChief Operating OfficerChief Procurement OfficerCorporate ResponsibilityFinancial Times Stock ExchangeHuman ResourcesInformation Communication TechnologyKnow Your SupplierLondon Stock ExchangeMulti National CompanyMultinomial Logistic RegressionNational Social Security AuthorityPoint of SalePurchase to PayQuality Business ReviewResource Dependency TheoryResearch and DevelopmentRepublic of South AfricaSouth AfricaSocial, Ethical and Environmental riskSmall to Medium EnterpriseState Procurement BoardUnited KingdomUninterrupted Power SupplyUnited States of AmericaTotal Cost of OwnershipTotal Quality ManagementZimbabwe Stock ExchangeInvitation To TenderRequest for a QuotationRequest for a ProposalSupplier Pre-Qualifying QuestionnaireProcurement Performance Management SystemChartered Institute of Purchasing and SupplySenior ManagementFunctional ManagersProcurement Team LeaderOperationalAnalysis of Variancevi