The Relationship Between Purchasing Strategies and Firm Performance in Small and Medium-sized Enterprises (SMEs) in Manufacturing Sector, Johor

Tai Yee Swen


Tai Yee Swen
Faculty of Business, Raffles University Iskandar Johor Bahru, Malaysia. Email: zoetai1289@gmail.com

Abstract

The main objective of this study is to investigate the relationship between purchasing strategies and firm performance in small and medium-sized enterprises (SMEs) in manufacturing sector in Johor, Malaysia. This research selected small and medium-sized enterprises (SMEs) in manufacturing sector in Johor, Malaysia as the target small and medium-sized enterprises (SMEs) sector and a few variables from Resource Based View (RBV), Social Exchange Theory (SET) and Agent Theory tend to be used and analysed the firm performance in small and medium-sized enterprises (SMEs) in manufacturing sector in Johor, Malaysia. Firm performance can be defined as how well a company does in its business activities. Hence, it is important to analyse how the three dimensions tend to influence the overall firm performance in small and medium-sized enterprises (SMEs) industry. In Malaysia, small and medium-sized enterprises (SMEs) is gradually expanding, and it is significant for small and medium-sized enterprises (SMEs) to clearly understand which dimensions enable to stand out among other competitors and increase firm performances. Data for this study were collected from a sample of 90 guests who hold a role as a purchasing personnel in the small and medium-sized enterprises (SMEs). The collected data was analysed using Partial Least Squares (PLS-SEM) with SmartPLS version 3. The findings revealed that three dimensions which are cost management, buyer and supplier relationship and negotiation strategy positively influence online purchase intention. As a result, it is suggested for small and medium-sized enterprises (SMEs) in manufacturing sector in Johor, Malaysia to appropriately apply relevant specific tactics to enhance those components as well as online purchase intention.

 

Keyword: Purchasing Strategies, Cost Management, Buyer and Supplier Relationship, Negotiation Strategy, Firm Performances

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