1. Jimma University, College of Business and Economics, Ethiopia; alemutebikew3@gmail.com
2. Jimma University, College of Business and Economics, Ethiopia; shimmz@yahoo.com
3. Jimma University, College of Business and Economics, Ethiopia; ibjzlo@yahoo.com
4. College of Business and Economics – Mizan Tepi University, Ethiopia; eyoabwm9620@gmail.com

*             Correspondence: alemutebikew3@gmail.com

Keywords: Organization performance, Southwest Jimma, Supply chain management practice

1. INTRODUCTION

Currently, more than ever before, supply chain management has become an integral part of business and essential to any company’s success and customer satisfaction.  Supply chain management includes planning and management of all activities, and it involves sourcing and procurements and all logistic management activities. still, despite the significant advances in research and practice many organizations continue to strangle to understand the complex issues related to coordinated planning and supply activities amongst the member of the supply networks (Mutuerandu, 2014). Supply chain management has become very significant for fostering competitiveness, enhancing efficiency, and promoting values added in products for organizations(Aura, 2017),  this corroborated by Adebayo(2018) who postulates that supply chain management practices contribute fifty percent to the profitabilities and performance of the organizations.  ,  this can show that supply chain management practice affect organizational performance in one or other, and effective supply chain management means that organizations have closely integrated internal function as well as external linkages with supplies, customers, and other channel members to achieve profitability and growth. The objectives of supply chain management are to maximize the overall value generated, minimize cost, effective and timely distribution of product needed by ultimate customers., and in general the main goal of supply chain management is to produce the right product, in the right quantities, at the right time and at minimum cost within the purpose to satisfy customer Requirement and internal target as efficient as possible, Organization performance is how well an organization can meet the expectations of its constituents, and to meet its objects and goals, it needs the effective and efficient use of supply chain management practice(Macleod et al., 1998). Recognizing and practicing the supply chain effectively and efficiently can leads not only increase the performance of the internal process of the company, but it can also increase the performance of all members of the supply chain. Business success depends on the firm’s ability to turn internal competencies into products and services that customers want while providing desired environmental, quality, and customer service levels at a reasonable price (Joel D. Wisner, Keah-Choon Tan, 2011). Even though the literature evidence shows that supply chain management practice is very important and the backbone of the business not only in manufacturing but also in the service sector such as ethiotelecom, there are s limitations that this study will be going to fill to some extent. For instance, Supply chain management practices are affected by global operations, and their chain is not only limited to upstream or downstream supply chains, Some of the empirical studies only focus on upper-tier supply chains i.e. suppliers (Addis, 2015), and some only focus on the lower-level supply chain i.e. customers (Suhong, Li, et al., 2004), (Mutuerandu, 2014), (Karimi & Rafiee, 2014) but this research is trying to include both streams while developing the variables, to address both streams to some extent, in addition to the above, many research literature done on the topic is more focused on manufacturing organizations, but this research is done on the specific organization of service sector, and the other existing gap the researcher find that most of the research done even on ethiotelecom those done are more focused on only some departments mainly the data is collected from the warehouse parts(Afera, 2014) and but supply chai is not only limited to a warehouse or logistic parts, but its chain is large even in internal organization and this research tries to include other related departments to cover the existing gaps, therefore, to fill some extent of the above gap and the importance of the title initiated the researcher to conduct this research. to improve the current situation of declines in the performance of the selected areas, to meet customer demand, to be competitive with an upcoming rival, the company needs to analyze the SCMP of ethiotelecom. The main objective of the study is to examine the Effect of Supply Chain practice on organizational performance in the case of the Ethiotelecom, Jimma district.

2. LITERATURE REVIEW AND THEORETICAL FRAMEWORK

This section presents a theoretical overview of related literature. It briefly presents Porter’s Value Chain theory, Resource-based View theory, Relational View theory, and an overview of Supply Chain Management, a component of supply chain management versus service industry, supply chain management, and Telecom industry, Service supply chain management Model. Porter (1985) advocates the identification and strategic exploitation of horizontal and vertical linkages.    Porter (1985) has   developed   both   horizontal  and  vertical  linkages, those  vertical  integrations  is the process  by wich   several  steps in the productions and distribution  of the product or service   are   controlled by single company  or entity,  and  horizontal integration  is  way  of   increasing market  shares by taking   over similar  company(Chircu et al. 2001). So as  organizations   using  the concept of these theory vertical(  backward) integration  with supplies  and  forward integration  with distributors are   very  important  for  not only for  manufacturing company   but  also useful  for  service  company  such as ethiotelecom, as core  of  supplychain  management. According to Barney (1991) and Peteraf, (1993), the Resource-Based View (RBV) theory states that firms are heterogeneous and achieve competitive advantage due to rare, valuable, inimitable, and not substitutable resources and capabilities. The original approach of the RBV focused on the internal resources owned by a firm, was broadened to consider the relationship as a source of competitive advantage and improvement of performance.  these   theories    make reson for development  of  relational  view  theories. According to Singh &Dyer (2007) resource   based view consider relationships as potential sources of superior performance.  It   identifies   four different sources of relational rents: substantial knowledge exchange, investment in relations- specific assets, complementary and rare resources, and   lower transaction cost.  All these resources are influenced by more effective governance mechanism   based on   informal safeguards   such as trust and  reputations,  as  as  relational   view perspectives relational   resource  and capable  should be  rare,  valuables, and  hard  to  imitate  or  substitute  to provide   sustainable  competitive  advantages. According to Dyer & Singh (1998) and Holcomb & Hitt(2007) RV considers relationships as potential sources of superior performance. It identifies four different sources of relational rents: investments in relation-specific assets, substantial knowledge exchange, complementary and rare resources, and lower transaction costs. All these sources are influenced by more effective governance mechanisms based on informal safeguards, such as trust and reputation. As in the RBV perspective, the relational resources and capabilities should be rare, valuable, and hard to imitate or to substitute to provide a sustainable competitive advantage, and generally the relationship view  theorie  and impact  of  SCM on organization performance  can be better  understood   if it is interpreted by using relational view, for instance information sharing maps  directly  accurate  and  temple knowledge  exchange. Long term   relationship with supplies  and customers can  help to reduce transaction cost  through  development of trust  and reputaions (Cooper, et.al., 2007); (Mentzer, 2001) and Li et al., 2006). It also can contribute to developing knowledge exchange and assure investments in specific assets. Therefore, the researcher will support ideas for the study based on relational view theory. Supply chain management practices are affected by the global operations, the real challenge for managers of this new enterprise environment is to develop suitable performance measures and metrics to make the right decisions that would contribute to improved supply chain practices, the competitiveness of the organization, and its operational performance. Supply chain management practices are affected by global operations, and their chain is not only limited to upstream or downstream supply chains, Some of the empirical studies only focus on upper-tier supply chains i.e. suppliers (Addis, 2015), and some only focus on the lower-level supply chain i.e. customers. Some studies like (Suhong, Li, et al., 2004), (Mutuerandu, 2014), (Karimi & Rafiee, 2014) but these research is trying to include both streams while developing the variables, to address both streams on some extent, in addition to the above, many research literature done on the topic is more focused on manufacturing organizations, but this research is done on the specific organization of service sector,  and the other literature gap the researcher find that most of the research done even on ethiotelecom those done are more focused on only some departments mainly the data is collected from the warehouse parts,(Afera, 2014) and but the supply chain is not only limited to a warehouse or logistic parts, but its chain is large even in internal organization and this research tries to include other related departments to cover the existing gaps.

3. RESEARCH METHODOLOGY

This study was employed both descriptive and explanatory research design. It is descriptive since descriptive data were collected through a questionnaire and it is also explanatory because the researcher would explore the effects of supply chain management practice on organization performance to meet the research objective. Both primary and secondary types of data were collected. The primary data was collected by using structured questionnaires. and personal interview with selected supply chain manager of ethiotelecom, Jimma district. The Secondary data was collected from published journal articles, supply chain management books, organizational manuals, and any relevant secondary sources. The populations of the study were the entire region professional employees starting from regional management level to lower-level employees of the company. Currently, there was a total of 575 employees in the region based on data taken from the regional human resource department from the total of 5750 employees 235 samples were drawn based on Taro Yamane’s (1967) formula. In this study, the independent variable (Strategic supplier’s partnership, commitment of management, information sharing, customer relationship, and Internal Integration) are used as independent variables for SCM practice of the Ethiotelecom, Jimma district. Each independent variable was extracted from the stages of SCM practices from the literature review and also the established relationship of these independent variables with Organization performance. Those variables affecting employee Supply chains are the domain considered as first-order independent variables, and the dependent variable is Organizational performance measured by efficiency, effectiveness, and flexibility to customers is considered as the dependent variable. Ethiotelecom Jimma district, Jimma district ethiotelecom is located in the southwestern part of ethiotelecom of the Oromia region, it is located 220 miles (353 km) from Addis Ababa, the capital city of Ethiopia. According to information obtained from Regional   HR data, the region has 17 sub shops that were managed under the district, and in Jimma district, there are 16 divisions and among this division, this study was conducted on 10 divisions of Jimma district ethiotelecom. (as shown in table 1 of sampling frame).

Table 01: Sampling frame

#                  DIVISION		No  of staff                  sample size
1	Supply chain  Division	19                                     8
2	Fleet  and Facility	76                                     31
3	Sales Division	156                                   64
4	Infrastructure-Power and Environment	47                                    19
5	Fixed  Network	121                                  50
6	Finance	49                                     20
7	Communication	6                                        2
8	Information  System	3                                       1
9	Internal Audit	3                                        1
10	Wireless Network	67                                     27
	TOTAL	547                                    235

(Source: Ethiotelecom South West Region Jimma HR department FEB, 2021)

The target population for this study focused on 10 division of ethiotelecom employees of Jimma district(southwest region) departments who are more related to supply chain departments. (total population of 547). Depending upon Taro Yamane (1973) the sample size was calculated as follows to represent the total population or universe, 575, which is the total number of employees managed under ethiotelecom, Jimma District at 95% confidence level. Therefore, the total sample size representing the universe or population is 235 employees which were be used for assessing the effect of Supply chain management practice on organization performance in Ethiotelecom, Jimma District. For the convenience of the study the calculated 235 number of samples are collected from purposively selected 10 Division upon their degree more relative of researcher variables to be addressed to supply chain and accessibility, and convenient for data collection using proportional allocation, the proportion of each bra which is elected by stratified sampling. This study uses both probability and non-probability sampling design, from probability sampling design the   Stratified sampling, because in which the population is divided into two or more relevant and significant strata based on one or more attributes. Each of the strata to which the population is divided obtains an equal chance of being included in the sample. and this technique is preferred because it is used to assist in minimizing bias when dealing with the population. A self-administered questionnaire of a 6-point Likert scale (1-strongly Disagree to 6-strongly agree) type was used to collect data from respondents. It was adapted from previous works and customized into the local context and objective of the study. Before the actual data was collected, a pilot study was done using 10 respondents which were excluded from the final data collection.  Finally, from a total of 235 questionnaires, 212 (91%) questionnaires were correctly responded to.  The rest of the responses were either unable to access the respondent or showed a pattern of inconsistency in filling the questionnaire. Once the questionnaires were collected by the researcher, it was coded and fed into the SPSS computer software For analysis. Initially, screening of data was done using sort functions. The data were analyzed using descriptive and inferential statistics by Statistical Package of Social Science (SPSS) version – 20 Quantitative data collected were analyzed using descriptive statistical techniques which were mean and standard deviation. Qualitative data were categorized and reported in emergent themes. Measures of central to investigate the causal association between dependent and independent variables, its underlying assumptions (normality, linearity, and multicollinearity) that substantially affect the ability to represent the relationship was tested and To reveal out the relationship, Pearson’s product-moment correlation (r) was conducted, therefore, multiple linear regression models were performed using the summated scale of items with the highest factor loadings to identify the determinant explanatory variables that can predict the outcome variable significantly and a p-value of less than 5% was considered to flag statistical significance.

4. ANALSIS AND DISCUSSION

The total perception of employees about Strategic supplier’s partnership, Commitment of management, Information sharing, Customer relationship management, are 2.603, 2.647,52.958, 2.958 are inclined to disagree however, they agreed with internal integration (3.7825) of the practice of the Jimma ethiotelecom, and there is little variation from the mean, and also interview result is conforming that supply chain practice is the district was poor in ethiotelecom, Jimma district.

Table 02: Mean and Standard deviation for both dependent and independent variables

SCM Practices	Mean                                     S.D
Strategic  suppliers  partnerships	19                                            8
Commitment of  management	76                                             31
Information sharing	156                                           64
Customer  relationship Management	47                                             19
Internal  integrations	121                                           50
Organizational performance	49                                             20

In the current study, the underlying assumptions that substantially affect the ability to represent multivariate relationships were tested. The outputs of the analyses showed no violation of the underlying assumptions of multivariate statistical analysis. The tests are Normality, linearity, and multicollinearity,  and all assumptions are met to conduct the multiple linear regression analysis as explained below. A multivariate explanatory analysis method requires approximately a normally distributed outcome variable for each category of predictive variables. A plotted data on the histogram (Figure 1) outlines the scores were approximately normally distributed in the graph.

Figure 01: Normality test Histogram (Source: Author own Survey illustration based on SPSS output, 2021)

Linearity defines the dependent variable as a linear function of the predictors. The linearity among pairs of variables was examined by inspection of a scatterplot of residuals. Inspection of the P-P plot was discussed in Figure 02.

 

Figure 02: P-P plot linearity test results (Source: Author own survey illustration based on SPSS output, 2021)

It refers to the situation when the predictor variables are highly correlated with each other. This causes inflation in the standard error of regression coefficients resulting in a reduction of their significance. In this study, the problem of multicollinearity was not suspected as the tolerance (T) statistics values for the predictor variables were greater than 0.1 and variance inflation factor (VIF) less than 10.(Table 3).

Table 03: Results of Variance Inflation Factor and Tolerance

Collinearity Statistics	Tolerance	VIF
Strategic Supplier Partnership	0.528	1.895
Commitment of  Management	0.7091	1.41
Information Technology	0.578	1.731
Customer Relationship Management	0.723	1.384
Internal Integrations	0.879	1.138

All PLSA after FA exhibited high Cronbach’s α establishing the reliability of the instrument (Table 4). The Cronbach’s alpha for this study was 0.918, an indication of the acceptability of the scale for further analysis.

Table 04: Reliability of measurement instrument each variable Summary (Cronbach’s Alpha)

Category of questionnaire or Scale	Cronbach’s Alpha	No of Items
Strategic suppliers partnership(SSP)	.756	6
commitment of Managements(CM)	.763	4
Information Technology(IT)	.732	5
Customers Relationships(CRS)	.721	5
Internal Integration	.814	4
Organizational performance	.898	7
Total	0.912	31

the general conclusion from the below table is that from the result of pearson correlation the variables strategic suppliers, partnership, and customer relationship management have a strong positive relationship with organizational performance but information sharing, and commitment of management has a moderate positive relationship with organizational performance and however internal integrations with organizational performance showed a weak positive correlation with organizational performance.

Table 05: Pearson Correlation Analysis for independent and dependent variables

Correlations		OP	SSP	CMGT	INSHA	CRM	ININT
OP	Pearson Correlation	1
	Sig. (2-tailed)
SSP	Pearson Correlation	.874**	1
	Sig. (2-tailed)	.000
CMGT	Pearson Correlation	.470**	.392**	1
	Sig. (2-tailed)	.000	.000
	N	212	212	212
INSHA	Pearson Correlation	.588**	.584**	.478**	1
	Sig. (2-tailed)	.000	.000	.000
	N	212	212	212	212
CRM	Pearson Correlation	.677**	.512**	.303**	.343**	1
	Sig. (2-tailed)	.000	.000	.000	.000
ININT	Pearson Correlation	.340**	.269**	.277**	.130	.208**	1
	Sig. (2-tailed)	.000	.000	.000	.058	.002

**. Correlation is significant at the 0.01 level (2-tailed).

Having checked the fit of data for multivariate analyses, multiple linear regression was performed to influence explanatory variables(strategic supplier partnerships, the commitment of management, information sharing, customer relationship,  and internal integrations that explain the outcome variable (organizational performance) significantly. From the Model summary (Table 6), the independent variables and organization performance in the regression model was discussed. In terms of variability (R2 = .854), an 85.4% variation in the organization’s performance can be explained by the explanatory variables included in the model. Since by definition, R2 increases even if nonsignificant independent variables are added, the adjusted R2 is an improved estimation of R2 in the model. Thus, changes in ethiotelecom of Jimma district attributes accounted for 85.4% of the variations in organization performance and the rest (28%) remain unexplained.

Table 06: Model Summary

Model	R	R Square	Adjusted R Square	Std. An error of the Estimate
1	.924a	0.854	0.851	0.32452

As explained in table 7 Analysis of Variance (ANOVA) and F- statistics generated by the regression of explanatory variables and organizational performance (Table 7) indicates the relationship was highly significant at (5, 206) = 241.425, p < 0.001. Certainly, the F-test for the null hypothesis that none of the explanatory variables are related to organizational performance (R is zero) was rejected, and it is concluded that the regression model (with the five predictors included) significantly predicts organizational performance.

Table 07: ANOVA Model

Model             Sum of Squares               df      Mean Square                 F                          Sig.

Regression                  127.125                5             25.425                        241.425        .000b

Residual                       21.694               206           .105

Total                           148.820               211

a. Dependent Variable: Organizational Performance

b. Predictors: (Constant),

b. Predictors: (Constant), Internal Integrations, Information sharing,  Customer Relationship Management,   Commitment of  Management, Strategic Supplier Partnership

The output (Table 8) provides the regression coefficients at 95% confidence intervals (CI)according to the estimated contribution of predictors to the dependent variable. The predictor strategic supplier partnership, commitment management, information sharing, customer relationships, and internal integrations, have a significant positive effect at 95% CI with organizational performance. This implies improving overall supply chain management practice is likely to enhance the organizational performance of the region supplier partnership (β=0.683, p<.001) with organizational performance. This finding implies strategic supplier partnership has the highest significant contribution of 68.3% of all SCM practices included in the analysis. As a result, the performance of the area is significantly improved primarily by developing strong strategic supplier partnerships. This result is in line with similar findings from earlier research, such this study is supported by other studies such as Admire (2020), (Li, S., et al., 2005), (Mutuerandu, 2014), (Karimi & Rafiee, 2014), (Charles, et al., 2014), (Li, et al.,2006) (Mutuerandu, 2014) and (Mustafa, 2014). In light of this, the p-value is 0.000 <0.05 and the t-value is 17.297 >2 and, β= 0.683 >0. Thus, based on these findings, the Null hypothesis is rejected, and the alternative hypothesis is supported. Thus, a Strategic supplier’s partnership has a significant positive effect on organizational performance, (H01: strategic supplier partnership is not significantly positive effect on organization performance in the case of Ethiotelecom, Jimma District.). Information technology has a significant positive impact on Organizational Performance and the null hypothesis is rejected, and the alternative hypothesis is supported with statistical findings (H03: Information sharing has not significant positive effect on organizational performance in the case of the Ethiotelecom Jimma District) since the p-value of all variables is less than the level of significance (0.05), we fail to retain the null hypothesis. So, “There is an internal integrations practice on organizational performance regarding Ethiotelecom”, thus, the Ha was accepted. (HO5: Internal integration has not a significant positive effect on organization performance in the case of ethiotelecom, Jimma district.). Finally, the results in Table 8 indicated that all other factors being zero, the organization performance is- 0.628. Furthermore, the results indicate that the relationship between SCM practices (Strategic supplier’s partnerships, Commitment of Management, Information sharing, Customer relationship Management, and Internal integration practice) with Organizational performance is positive as indicated by beta coefficients of .0.683, 0.08 respectively. Then the null hypothesis proposed in Commitment of manger is not significant positive effect on organizational performance supported as the associated p-value= 0.014 < 0.05, t-value =2.478 > 2 and its beta value β= 0.104 >0. Thus, based on these findings, the Null hypothesis is rejected, and the alternative hypothesis is supported. (HO2:  Commitment of management have not significant positive effect on organizational performance in the case of Ethiotelecom, Southwest Region).

5. CONCLUSION

Based on the study finding of descriptive statistics, the study concludes that the majority of the respondents have disagreed about the Strategic Supplier Partnership, the commitment of management, information technology practice of the ethiotelecom, customer relationship however, they agreed with internal integration of the practice of the company, and the interview result can also depict those ideas. Another conclusion is drawn Pearson correlation shows that it was concluded that all dependent variables (Strategic supplier partnership, commitment of management, information sharing, customer relationship management, and internal integration) and statistically significant and a positive effect organization performance, even though the practice of strategic supplier partnership, commitments of management, information sharing, customer relationship practice, needs improvement). However, the degree to which they impact the organization’s performance is not the same, for instance, Strategic supplier’s partnership and Customer Relationship Management have had a strong positive relationship and Information Technology and Commitment of Management has moderate positive correlation (and Internal Integrations had a weak positive correlation with organizational performance. Standing from the result of regression analysis the study concludes that Strategic suppliers partnerships, Customer Relationship Management, Commitment of management, information sharing, and lastly Internal integrations are the signs which are important predictors of the organizational performance in ethiotelecom in, the South West Region Jimma.

RECOMMENDATION

It is recommended that the company (supply chain division of South West Region  Jimma), should develop long-run strategic relationships with suppliers, by developing a strategic alliance with key selected suppliers, measuring the performance of suppliers continuously, and developing involvement of suppliers in planning and goal setting, and also the company should improve work process, for instance, the criteria to select suppliers to bring more flexibility. The study also recommends that management of the organization, Specifically, CEO of the regions, with Hr. departments and supply chain departments should facilitate training of the workforce and developing supply chain management skills through workshops and systematic training programs for managers, so as the managers identify changes in the marketplace and commit resources quickly to new courses of action. It is also strongly recommended that the company, (Specifically IS division Jimma Di)should work to increase the technological capacity, especially of ERP (enterprise resource planning) to integrate to external suppliers in addition to internal integrations. Besides the above, it is also strongly recommended that the company(  sales division South West Region  Jimma) should have to develop a platform to evaluate the customers to set reliability, responsiveness, and other standards, so as create strong relationships with customers, and to follow up customer needs  In addition to the above, It is also recommended again that Even though internal integration of the company is good, it better to increase more than this by developing internal integration automation, coordination among different departments should be improved by creating a team among different departments to increase the performance of the company. In general, the company (South West Region  Jimma) should work on three things coordination of peoples, increasing integration of systems, and working on improvement of processes to bring flexibility and to be competitive enough, and to sustain in a changing market, and remain profitable. Some extensions to this study may provide further insights into the effects of supply chain management practices on organizational performance. Some suggestions for future studies have been provided below: First of all, research works on supply chain management practices and their effect on organizational performance are vital for organizations in today’s global competitive time. However, most of the existing studies are carried out in developed countries, and most of them are done manufacturing sector. It is, therefore, necessary for more researchers, especially, in Africa to continue to explore the area empirically in the service sector. Also, due to certain limitations, With regards to scope, this study is conducted on selected regions of ethiotelecom,  that is Jimma regions, It is, therefore, not known to what extent one can generalize the findings from this study to other public organizations or even the same institution’s branch across the country, it is good if the future study is conducted on the company level by including all regions,  and it is also suggested that future studies should focus on those institutions/organizations not captured in the current study. The other thing is that this study does not include is that other supply chain parties such as suppliers, and it’s only conducted on the organization side, therefore, it is good if the future study includes selected suppliers to collect data. Moreover, about methodology, this research measure dependent variable by combining them into one, it does not shows, specifically, the effects of each dependent variable, therefore it is good for future research to research another model in addition to what the researcher used in this model to show specifically effect of each dependent variables and also future research can also be good to test the relationships/ dependency among the SCM practices. Finally, with regards to variables this research include almost both downstream and upstream supply chain, Future research can expand the domain of SCM practice by considering additional dimensions such as  Jit/ lean capacity, and is better to add more based on the interest of different organization on which the study is conducted.

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