Indian Journal of Finance

Open Access Open Access  Restricted Access Subscription Access

Exploring the Influence of Supplier Relationship Quality on South African Municipalities’ Service Delivery Performance


Affiliations
1 Department of Marketing, University of the Witwatersrand, Johannesburg, 2000, South Africa
2 Department of Business Management, University of Venda, University Rd, Thohoyandou, 0950, South Africa

   Subscribe/Renew Journal


Most South African municipalities are yet to perform at the desired level. Service delivery protests have been a permanent feature in the South African media for years. Apprehending the factors influencing relationship quality may help municipalities enhance their performance and reduce service delivery problems. The study adopted a quantitative approach within the South African municipality setting. The respondents were sampled using stratified random sampling and snowball sampling. Data were collected from 205 respondents using a structured 5-point Likert scale questionnaire. The data were coded and analyzed using descriptive statistics, SPSS, and AMOS statistical software. The main finding was that relationship quality influenced service delivery performance from the management’s perspective. The composite relationship quality variables (cooperation, trust, commitment, and satisfaction) significantly influenced the relationship quality. The implication is that the quality of the relational interactions between the municipalities and their suppliers significantly impacted the quality-of-service delivery performance.

Keywords

Management Practices, Relationship, Quality, Satisfaction, Service Delivery, Performance.

JEL Classification Codes : M1, M2, M3

Paper Submission Date : December 30, 2021 ; Paper sent back for Revision : February 22, 2022 ; Paper Acceptance Date : August 10, 2022 ; Paper Published Online : December 15, 2022

User
Subscription Login to verify subscription
Notifications
Font Size

  • Abdul-Muhmin, A. G. (2005). Instrumental and interpersonal determinants of relationship satisfaction and commitment in industrial markets. Journal of Business Research, 58(5), 619–628. https://doi.org/10.1016/j.jbusres.2003.08.004

  • Alexander, G., & Kane-Berman, J. (2014). The 80/20 report: Local government in 80 indicators after 20 years of democracy. South African Institute of Race Relations. https://irr.org.za/reports/occasional-reports/files/the-80-20-report-on-local-government-26-may-2014-1.pdf

  • Alexander, P. (2013). South Africa: The rebellion of the poor. Popular Resistance.org. https://popularresistance.org/south-africa-the-rebellion-of-the-poor/

  • Alexander, P., & Pfaffe, P. (2011). South Africa's rebellion of the poor: Balfour and relationships to the means of protest. In, Version for academic and activist workshop on 'Protests, Elections and Emerging Politics.' South African Research Chair in Social Change, Humanities Faculty, University of Johannesburg.

  • Almomani, H. Q. (2019). Relationship quality as predictor of B2B customer loyalty in the pharmaceutical sector: Evidence from Jordan. Journal of Relationship Marketing, 18(2), 108–123. https://doi.org/10.1080/15332667.2018.1534062

  • Auditor General (SA). (2012). General report of the auditor-general on local government. https://www.agsa.co.za/Reporting/AnnualReport.aspx

  • Auditor General (SA). (2016). General report of the auditor-general on local government. https://www.agsa.co.za/Reporting/AnnualReport.aspx

  • Baumgartner, H., & Homburg, C. (1996). Applications of structural equation modeling in marketing and consumer research: A review. International Journal of Research in Marketing, 13(2), 139–161. https://doi.org/10.1016/0167-8116(95)00038-0

  • Becker, A., Laligi, H., & Thiel, C. (2004). Effective supplier management in the Brazilian automotive industry. In, N. Schweickart, & L. Kaufmann (eds.), Lateinamerika-Management (pp. 279–313). Gabler Verlag. https://doi.org/10.1007/978-3-322-90458-4_14

  • Bentler, P. M. (1990). Comparative fit indexes in structural models. Psychological Bulletin, 107(2), 238–246. https://doi.org/10.1037/0033-2909.107.2.238

  • Bentler, P. M., & Bonett, D. G. (1980). Significance tests and goodness of fit in the analysis of covariance structures. Psychological Bulletin, 88(3), 588–606. https://doi.org/10.1037/0033-2909.88.3.588

  • Bollen, K. A. (1989). Structural equations with latent variables. John Wiley and Sons, Inc. https://doi.org/10.1002/9781118619179

  • Browne, M. W., & Cudeck, R. (1992). Alternative ways of assessing model fit. Sociological Methods & Research, 21(2), 230–258. https://doi.org/10.1177/0049124192021002005

  • Cameron, R. (2014). Vertical decentralisation and urban service delivery in South Africa: Does politics matter? Development Policy Review, 32(s1), s81–s100. https://doi.org/10.1111/dpr.12070

  • Cater, B., & Zabkar, V. (2009). Antecedents and consequences of commitment in marketing research services: The client's perspective. Industrial Marketing Management, 38(7), 785–797. https://doi.org/10.1016/j.indmarman.2007.10.004

  • ?ater, T., & ?ater, B. (2010). Product and relationship quality influence on customer commitment and loyalty in B2B manufacturing relationships. Industrial Marketing Management, 39(8), 1321–1333. https://doi.org/10.1016/j.indmarman.2010.02.006

  • Daunoriene, A., & Zekeviciene, A. (2015). A reference model of public institutions' quality practices, citizens' satisfaction and performance quality. Engineering Economics, 26(4), 422–430. http://doi.org/10.5755/j01.ee.26.4.6066

  • De Cannière, M. H., De Pelsmacker, P., & Geuens, M. (2009). Relationship quality and the theory of planned behavior models of behavioral intentions and purchase behavior. Journal of Business Research, 62(1), 82–92. https://doi.org/10.1016/j.jbusres.2008.01.001

  • Empowerdex. (2012). Service Delivery Index (Munidex). Empowerdex Economic Empowerment Rating Agency. https://www.empowerdex.com/

  • eNCA. (2015, February 05). Service delivery protests peaking. https://www.enca.com/south-africa/service-delivery-protests-peaking

  • Gadde, L.-E., & Snehota, I. (2000). Making the most of supplier relationships. Industrial Marketing Management, 29(4), 305–316. https://doi.org/10.1016/S0019-8501(00)00109-7

  • Ghzaiel, K., & Akrout, F. (2012). Dimensions and antecedents of relationship quality in a business-to-business context: An exploratory study. Journal of Supply Chain and Customer Relationship Management, Vol. 2012, 1–17. https://doi.org/10.5171/2012.589977

  • Hair Jr., J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed). Pearson Prentice Hall.

  • Hastie, T., Tibshirani, R., & Friedman, J. (2009). The elements of statistical learning: Data mining, inference, and prediction (2nd ed.). Springer-Verlag.

  • Hawley, K. (2014). Trust, distrust and commitment. Noûs, 48(1), 1–20. https://doi.org/10.1111/nous.12000

  • Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43, 115–135. https://doi.org/10.1007/s11747-014-0403-8

  • Holm, D., Eriksson, K., &, Johanson, J. (1999). Creating value through mutual commitment to business network relationships. Strategic Management Journal, 20(5), 467–486.https://doi.org10.1002/(SICI)1097-0266(199905)20:5<467::AID-SMJ38>3.0.CO;2-J

  • Hooper, D., Coughlan, J., & Mullen, M. R. (2008). Structural equation modelling: Guidelines for determining model fit. Electronic Journal of Business Research Methods, 6(1), 53–60. https://doi.org/10.21427/D7CF7R

  • Hoppner, J. J., Griffith, D. A., & White, R. C. (2015). Reciprocity in relationship marketing: A cross-cultural examination of the effects of equivalence and immediacy on relationship quality and satisfaction with performance. Journal of International Marketing, 23(4), 64–83. https://doi.org/10.1509/jim.15.0018

  • Hu, L.-T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55. https://doi.org/10.1080/10705519909540118

  • Ismail, A., Abdul Ghani, A. B., Subhan, M., Joarder, M. H., & Ridzuan, A. A. (2015). The relationship between stress and job satisfaction: An evidence from Malaysian peacekeeping mission. Mediterranean Journal of Social Sciences, 6(4), 647–655. http://dx.doi.org/10.5901/mjss.2015.v6n4s3p647

  • Keh, H. T., & Xie, Y. (2009). Corporate reputation and customer behavioral intentions: The roles of trust, identification and commitment. Industrial Marketing Management, 38(7), 732–742. https://doi.org/10.1016/j.indmarman.2008.02.005

  • Kim, Y. K., Trail, G., & Ko, Y. J. (2011). The influence of relationship quality on sport consumption behaviors: An empirical examination of the relationship quality framework. Journal of Sport Management, 25(6), 576–592. https://doi.org/10.1123/jsm.25.6.576

  • Kini, A. N., & Basri, S. (2022). A framework for customer engagement behaviour in the financial services industry: A critical review of evidence. Indian Journal of Finance, 16(6), 27–43. https://doi.org/10.17010/ijf/2022/v16i6/169925

  • Kline, R. B. (2011). Principles and practice of structural equation modeling. Guilford.

  • Lytras, M. D., De Pablos, P. O., Avison, D., Sipior, J., Jin, Q., Leal, W., Uden, L., Thomas, M., Cervai, S., & Horner, D. (2010). Technology enhanced learning: Quality of teaching and educational reform. In, Proceedings of First International Conference, Tech-Education 2010. https://link.springer.com/book/10.1007/978-3-642-13166-0

  • Malik, S., & Kaur, S. (2020). Challenges of financing infrastructure deficits through PPPs: Lessons from global experience. Indian Journal of Finance, 14(10–11), 8–23. http://doi.org/10.17010/ijf/2020/v14i10-11/155968

  • Mehta, R., Polsa, P., Mazur, J., Xiucheng, F., & Dubinsky, A. J. (2006). Strategic alliances in international distribution channels. Journal of Business Research, 59(10–11), 1094–1104. https://doi.org/10.1016/j.jbusres.2006.07.003

  • Mettler, T., & Rohner, P. (2009). Supplier relationship management: A case study in the context of health care. Journal of Theoretical and Applied Electronic Commerce Research, 4(3), 58–71. https://doi.org/10.4067/S0718-18762009000300006

  • Miocevic, D., & Crnjak-Karanovic, B. (2012). The export market orientation-export performance relationship in emerging markets: The case of Croatian SME exporters. International Journal of Business and Emerging Markets, 4(2), 107–122. http://dx.doi.org/10.1504/IJBEM.2012.046235

  • Morgan, R. M., & Hunt, S. D. (1994). The commitment–trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38. https://doi.org/10.2307/1252308

  • Moss, T. P., Lawson, V., & White, P. (2015). Identification of the underlying factor structure of the Derriford Appearance Scale 24. PeerJ, 3:e1070. https://doi.org/10.7717/peerj.1070

  • Mukherjee, A., & Nath, P. (2007). Role of electronic trust in online retailing: A re?examination of the commitment?trust theory. European Journal of Marketing, 41(9/10), 1173–1202. https://doi.org/10.1108/03090560710773390

  • Naude, M. J., Ambe, I. M., & Kling, R. (2013). Supplier relationship management – Anathema for the South African public procurement sector. Journal of Transport and Supply Chain Management, 7(1), 1–13. https://doi.org/10.4102/jtscm.v7i1.93

  • Nyaga, G. N., & Whipple, J. M. (2011). Relationship quality and performance outcomes: Achieving a sustainable competitive advantage. Journal of Business Logistics, 32(4), 345–360. https://doi.org/10.1111/j.0000-0000.2011.01030.x

  • Palmatier, R. W., Dant, R. P., Grewal, D., & Evans, K. R. (2006). Factors influencing the effectiveness of relationship marketing: A meta-analysis. Journal of Marketing, 70(4), 136–153. http://doi.org/10.1509/jmkg.70.4.136

  • Peters, S., & Van Nieuwenhuyzen, H. (2013). Understanding the dynamics of the capacity challenge at the local government level. Technical Report: 2013/14 Submission for the Division of Revenue.

  • Powers, T. L., & Reagan, W. R. (2007). Factors influencing successful buyer-seller relationships. Journal of Business Research, 60(12), 1234–1242. http://dx.doi.org/10.1016/j.jbusres.2007.04.008

  • Rauyruen, P., & Miller, K. E. (2007). Relationship quality as a predictor of B2B customer loyalty. Journal of Business Research, 60(1), 21–31. http://dx.doi.org/10.1016/j.jbusres.2005.11.006

  • Redmond, M. V. (2015). Social exchange theory (English Technical Reports and White Papers). https://dr.lib.iastate.edu/entities/publication/3269a123-c890-4b0c-b114-fd12e43e7f41

  • Ribarsky, E. (2013). Choose your own adventure: Examining social exchange theory and relational choices. Communication Teacher, 27(1), 29–32. https://doi.org/10.1080/17404622.2012.737924

  • Sheth, J. N., & Sharma, A. (2006). The surpluses and shortages in business-to-business marketing theory and research. Journal of Business & Industrial Marketing, 21(7), 422–427. http://doi.org/10.1108/08858620610708902

  • Sheu, J.-B., & Hu, T.-L. (2009). Channel power, commitment and performance toward sustainable channel relationship. Industrial Marketing Management, 38(1), 17–31. http://doi.org/10.1016/j.indmarman.2007.07.003

  • Tanskanen, K. (2015). Who wins in a complex buyer-supplier relationship? A social exchange theory-based dyadic study. International Journal of Operations & Production Management, 35(4), 577–603. https://doi.org/10.1108/IJOPM-10-2012-0432

  • Tung, B., & Carlson, J. (2013). Modeling a formative measure of relationship quality and its effects: Evidence from the Hong Kong retail banking industry. Services Marketing Quarterly, 34(2), 139–158. http://dx.doi.org/10.1080/15332969.2013.770674

  • Vaid, Y. K., Singh, V., & Sethi, M. (2020). Benefits of goods & services tax and its impact on taxpayers' satisfaction. Indian Journal of Finance, 14(5–7), 62–75. https://doi.org/10.17010/ijf/2020/v14i5-7/153325

  • Van Bruggen, G. H., Kacker, M., & Nieuwlaat, C. (2005). The impact of channel function performance on buyer-seller relationships in marketing channels. International Journal of Research in Marketing, 22(2), 141–158. https://doi.org/10.1016/j.ijresmar.2004.06.004

  • Walter, A., Müller, T. A., Helfert, G., & Ritter, T. (2003). Functions of industrial supplier relationships and their impact on relationship quality. Industrial Marketing Management, 32(2), 159–169. http://doi.org/10.1016/S0019-8501(02)00230-4

  • Wang, C. L., Siu, N. Y., & Barnes, B. R. (2008). The significance of trust and renqing in the long-term orientation of Chinese business-to-business relationships. Industrial Marketing Management, 37(7), 819–824. https://doi.org/10.1016/j.indmarman.2008.01.008

  • Wang, W.-T., Wang, Y.-S., & Liu, E.-R. (2016). The stickiness intention of group-buying websites: The integration of the commitment–trust theory and e-commerce success model. Information & Management, 53(5), 625–642. https://doi.org/10.1016/j.im.2016.01.006

  • Williams, T. (2005). Cooperation by design: Structure and cooperation in interorganizational networks. Journal of Business Research, 58(2), 223–231. https://doi.org/10.1016/S0148-2963(02)00497-6

  • Zhu, Y. (2012). A review of social exchange relationship. Studies in Sociology of Science, 3(3), 57–61. http://doi.org/10.3968/j.sss.1923018420120303.1658


Abstract Views: 98

PDF Views: 0




  • Exploring the Influence of Supplier Relationship Quality on South African Municipalities’ Service Delivery Performance

Abstract Views: 98  |  PDF Views: 0

Authors

Stanford Kasai
Department of Marketing, University of the Witwatersrand, Johannesburg, 2000, South Africa
Norman Chiliya
Department of Business Management, University of Venda, University Rd, Thohoyandou, 0950, South Africa

Abstract


Most South African municipalities are yet to perform at the desired level. Service delivery protests have been a permanent feature in the South African media for years. Apprehending the factors influencing relationship quality may help municipalities enhance their performance and reduce service delivery problems. The study adopted a quantitative approach within the South African municipality setting. The respondents were sampled using stratified random sampling and snowball sampling. Data were collected from 205 respondents using a structured 5-point Likert scale questionnaire. The data were coded and analyzed using descriptive statistics, SPSS, and AMOS statistical software. The main finding was that relationship quality influenced service delivery performance from the management’s perspective. The composite relationship quality variables (cooperation, trust, commitment, and satisfaction) significantly influenced the relationship quality. The implication is that the quality of the relational interactions between the municipalities and their suppliers significantly impacted the quality-of-service delivery performance.

Keywords


Management Practices, Relationship, Quality, Satisfaction, Service Delivery, Performance.

JEL Classification Codes : M1, M2, M3

Paper Submission Date : December 30, 2021 ; Paper sent back for Revision : February 22, 2022 ; Paper Acceptance Date : August 10, 2022 ; Paper Published Online : December 15, 2022


References





DOI: https://doi.org/10.17010/ijf%2F2022%2Fv16i12%2F172571