A Study On The Relationship Between Performance Levels Of Organizational Value Adding Activities And Profitability Of Selected Leather Products Manufacturers In Addis Ababa
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Date
2014-07
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Addis Ababa University
Abstract
This research was conducted to study the relationship between performance levels of
organizational value adding activities and profitability of selected leather products manufacturers
in Addis Ababa based on the value chain model developed by Porter (1985).
35 different organizations were included in the study. Primary data from each of the
organizations was collected through questionnaires. Secondary document analysis was also
conducted by accessing financial and accounting records. Theoretical framework review and
previous researches and studies in light of the current industry situation were used as an input for
analysis and discussion of results.
The data collected was descriptively analyzed through tabular summarization of the collected
survey results, along with discussions. Correlation analysis was conducted to see how significant
the associations of the value adding activities performance levels of the organizations are with
their profitability. Furthermore, inferential statistics and hypothesis testing was undertaken in the
form of median tests and ANOVA to test the assumption that difference in performance level in
the organizational value adding activities determines the variability in profit margins of the
organizations.
Significant results were obtained from both the parametric and non parametric statistical tests.
Correlation analysis results showed that the dependent and independent variables have positive
and significant correlation. Also significant results from Analysis of variance taking operating
profit margin of organizations as the response variable and performance levels of value adding
activities as factors proved that organizational profitability is determined and depends on all
primary and support value adding activities performance levels.
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Keywords
Relationship Between Performance