The Effect of Strategic Sourcing on Organizational Performance: A Case Study of Ethiopian Airlines Group
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Date
2023-06
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Addis Ababa University
Abstract
Worldwide, the idea and practice of strategic sourcing are expanding quickly as businesses see it as a means of achieving their strategic objectives, enhancing customer happiness, and streamlining their business processes. The general goals of this study were to look into current strategic sourcing procedures and how they affect the performance of Ethiopian Airlines Group. The study's main objective was to examine how strategic sourcing affected the Ethiopian Airlines Group's operational performance. The justification for carrying out this investigation was that strategic sourcing and procurement are serious encounters confronted several firms involved in supply chain management. Therefore, the study was conducted with the intention of examining the impact of strategic sourcing, including procurement plans, supplier development, long-term supplier relationships, and communication of the supply base, on the organizational performance of the Ethiopian Airlines Group. The study employed both a descriptive and an explanatory research design. Out of the study population of 4153 employees of the airline, 143 target populations were taken as a sample, whose elements were selected using a purposive sampling technique. Questionnaires were used as the primary instrument for data collection. The response rate was 92%, with 132 closed-ended questionnaires properly filled out of the 143 questionnaires distributed. Data was analyzed using descriptive statistics, correlation, and regression analysis and presented in tables with the help of SPSS 26 software. The results of the analysis demonstrate that strategic sourcing improves operational performance. The study revealed that strategic sourcing practices contributed to Ethiopian Airlines group organizational performance to a moderate extent. The study also showed that there was a significant relationship between strategic sourcing practices and the organizational performance of Ethiopian Airlines Group. The study further revealed that procurement plans, long-term supplier relationships, and communication practices had predictive power on the organizational performance of Ethiopian Airlines Group. So, the researcher recommended to the organization that it implement strategic sourcing practices seriously to accomplish operational performance.
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the researcher recommended to the organization that it implement strategic sourcing practices seriously to accomplish operational performance