Effect of Strategic Sourcing Practices on Organizational Performance: Evidence from Habesha Brewery Share Company

Dr. Birhanu Moltot
Assistant Professor of Management, Department of Management, Debere Berhan University, Debre Berhan, Ethiopia

Dr. Abera Bayisasahu
Assistant Professor of Finance, Department of Accounting & Finance, Debre Berhan University, Debre Berhan, Ethiopia

Belaynesh Mekonen
MBA Scholar, Department of Management, Debere Berhan University, Debere Berhan, Ethiopia

Abstract

The aim of this study is to investigate the effects of strategic sourcing practices on organizational performance at Habesha Brewery Share Company, Debre Berhan, Ethiopia. The study used a quantitative research design, which are descriptive and explanatory research design. Out of the total population of 278 employees, a sample of 163 permanent employees was selected by using a proportional stratified random sampling technique. Data was gathered using a self-administered questionnaire and analyzed using the mean, percentage, correlation coefficient, and multiple regression analysis through SPSS software version 23. The results of regression analysis indicated that all of the five strategic sourcing component variables had a significant positive effect on organizational performance, with varying levels of statistical significance. Particularly, the effective procurement planning variable had the strongest effect (B = 0.309, p < 0.001), followed by the communication variable (B = 0.189, p = 0.003) and the technology integration variable (B = 0.166, p = 0.005). The study variables, such as supplier relationship management variable (B = 0.114, p = 0.042) and the supplier selection variable (B = 0.102, p = 0.035), contributed statistically significantly to the organizational performance. In conclusion, the strategic sourcing practices of the organization significantly enhance organizational performance. Finally, the study recommends the company reinforce procurement planning systems, improve procurement communication strategies, invest in highly modernized state-of-the-art technological tools, and enforce structured supplier evaluation and relationship management frameworks to uphold performance.

Keywords: Communication, Effective Procurement Planning, Organizational Performance, Supplier Relationship Management, Supplier Selection, and Technology Integration