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Title: The effects of the degree of produce perishability and the choice of procurement channel on supplier opportunism: empirical evidence from the food processing industry

Authors: Renger Kanani; Arnt Buvik

Addresses: Department of General Management, University of Dar es salaam Business School, P.O. Box 35046, Dar es salaam, Tanzania ' Department of Economics, Molde University College, Service Box 2110, 6402 Molde, Norway

Abstract: Opportunism is an important topic in supply chain management and distribution channels. The emergence of this behaviour in buyer-supplier relationships tends to reduce performance while diminishing value creation in the effected relations. Different transactions call for different control levels depending on the gravity of opportunism in the transaction, with the need for control being higher as opportunism increases. In this regard, it is important to understand the factors that give rise to opportunism to apply appropriate control mechanisms. This study, therefore, explores the effect of the degree of the perishability of the transacted produce on supplier opportunism. Additionally, this study treated the choice of procurement channel as a control mechanism; therefore, we compared the effect of perishability on opportunism in direct and indirect procurement channels. In this study, cross-sectional survey data collected from 239 food processor-produce supplier relationships served as source of empirical evidence. The empirical findings support our hypotheses, and demonstrate that perishability is positively associated with supplier opportunism, with the effect being significantly lower in the direct procurement channels than in the indirect procurement channel.

Keywords: transaction cost theory; TCT; perishability; opportunism; procurement channels; buyer-supplier relationships.

DOI: 10.1504/IJPM.2018.088620

International Journal of Procurement Management, 2018 Vol.11 No.1, pp.113 - 133

Available online: 12 Dec 2017 *

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