The Effects of Strategic Sourcing on Organizational Performance: Case of Moha Soft Drinks Industry S.C Hawasa Millennium Pepsi Cola Plant

Document Type : Research Paper

Authors

0913476535 Bule Hora University 144

Abstract

Objective: This study aims to investigate the influence of strategic sourcing on the performance of MOHA Soft Drinks Industry S.C. By understanding this relationship, the research seeks to provide actionable insights to enhance organizational performance.
Methods: A mixed-methods approach was employed, integrating both quantitative and qualitative data for comprehensive analysis. The sample included 213 employees from the organization, yielding 181 completed questionnaires for evaluation. Quantitative data were analyzed using descriptive statistics to identify key variables, while Pearson correlation and multiple linear regression analyses were employed to examine the relationships between these variables and organizational performance.
Results: The analysis revealed a moderate perception of organizational performance, with an average score of 3.3573. The multiple linear regression results demonstrated a strong explanatory power, with an R² value of 0.800, indicating that 80% of the variation in performance could be explained by the identified predictors. Interviews with employees highlighted specific challenges in supplier selection and emphasized the need for improved procurement planning, corroborating the quantitative findings.
Conclusion: The study concludes that strategic sourcing is a critical strategy for enhancing organizational performance at MOHA Soft Drinks Industry S.C. The findings suggest that enhancing contract management and procurement strategies could significantly improve operational performance, offering valuable insights for organizational development.

Keywords

References

Abdollahi, M., Arvan, M., & Razmi, J. (2015). An integrated approach for supplier portfolio selection: Lean or agile? Expert Systems with Applications, 42(1), 679-690. http://dx.doi.org/10.1016/j.eswa.2014.08.019
Adda, G. (2024). Examining the relationship between procurement strategies and organizational performance of Ghanaian firms: How does strategic procurement drive organizational success? Economics, Management and Sustainability, 9(2), 20-28. 10.14254/jems.2024.9-2.2
Ayele, Y., & Edjigu, H. (2025). Production network disruption: Evidence from the civil-conflict in Ethiopia. World Development, 195, 107098. 10.0; Win64; x64) AppleWebKit/537.36
Bednarski, L., Roscoe, S., Blome, C., & Schleper, M. C. (2025). Geopolitical disruptions in global supply chains: a state-of-the-art literature review. Production planning & control, 36(4), 536-562. https://doi.org/10.1080/09537287.2023.2286283
Bilal, A. I., Bititci, U. S., & Fenta, T. G. (2024). Effective Supply Chain Strategies in Addressing Demand and Supply Uncertainty: A Case Study of Ethiopian Pharmaceutical Supply Services. Pharmacy, 12(5), 132.https://doi.org/10.3390/pharmacy12050132 
Changalima, I. A., Ismail, I. J., & Mchopa, A. D. (2024). Effects of supplier selection and supplier monitoring on public procurement efficiency in Tanzania: a cost-reduction perspective. Vilakshan-XIMB Journal of Management, 21(1), 55-65. 4 10.1108/XJM-04-2022-0077
Chen, I. J., Paulraj, A., & Lado, A. A. (2004). Strategic purchasing, supply management, and firm performance. Journal of operations management, 22(5), 505-523. https://doi.org/10.1016/j.jom.2004.06.002
David, A., Addo, S. K., & Isaac, Y. K. (2024). Senior management's influence on supplier selection and procurement performance. African Journal of Procurement, Logistics & Supply Chain Management, 7(8), 93-113. https://dx.doi.org/10.4314/ajplscm.v7i8.6
Dobrzykowski, D. D., Tran, O., & Tarafdar, M. (2010). Value co‐creation and resource based perspectives for strategic sourcing. Strategic Outsourcing: An International Journal, 3(2), 106-127. https://doi.org/10.1108/17538291011060330
Egbumokei, P. I., Dienagha, I. N., Digitemie, W. N., Onukwulu, E., & Oladipo, O. (2024a). Strategic contract management for drilling efficiency and cost reduction: Insights and perspectives. International Journal of Multidisciplinary Research and Growth Evaluation, 5(5), 1042-1050. https://doi.org/10.54660/.IJMRGE.2024.5.5.1042-1050    
Egbumokei, P. I., Dienagha, I. N., Digitemie, W. N., Onukwulu, E., & Oladipo, O. (2024b). Strategic supplier management for optimized global project delivery in energy and oil & gas. International Journal of Multidisciplinary Research and Growth Evaluation, 5(5), 2582-7138. https://doi.org/10.54660/.IJMRGE.2024.5.5.984-1002
Eltantawy, R., Giunipero, L., & Handfield, R. (2014). Strategic sourcing management’s mindset: strategic sourcing orientation and its implications. International Journal of Physical Distribution & Logistics Management, 44(10), 768-795. http://dx.doi.org/10.1108/IJPDLM-02-2014-0045
Famiyeh, S., & Kwarteng, A. (2018). Supplier selection and firm performance: empirical evidence from a developing country’s environment. International Journal of Quality & Reliability Management, 35(3), 690-710. https://doi.org/10.1108/IJQRM-06-2016-0091
Fayezi, S., O'Loughlin, A., & Zutshi, A. (2012). Agency theory and supply chain management: a structured literature review. Supply Chain Management: An International Journal, 17(5), 556-570. https://doi.org/10.1108/13598541211258618
Gajdzik, B., & Wolniak, R. (2022). Smart production workers in terms of creativity and innovation: The implication for open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(2), 68. https://doi.org/10.3390/joitmc8020068
Gede, D. U. (2024). Nexus between Reward System, Employee Commitment and Organizational Performance. Horn of African Journal of Business and Economics (HAJBE), 7(2), 93–109-193–109.
Gede, D. U. (2025a). Enhancing Organizational Performance Through Effective Supply Chain Management: Insights from the Adola Branch of Ethiopian Magnesium Oxide. Public Organization Review, 1-16. https://doi.org/10.1007/s11115-025-00829-w 
Gede, D. U. (2025b). Strategic alignment and its effects on employee engagement: empirical evidences from Ethiopian education sector. International Review of Public Administration, 30(2), 113-135.https://doi.org/10.1080/12294659.2025.2454058
Gede, D. U., & Warie, G. H. (2024). Entrepreneurial orientation and effects on small and micro enterprise business performance: the case of East Guji Zone Gelana Woreda Small and Micro Enterprises. International Journal of Social Science, Management and Economics Research, 2(1), 18-34. https://doi.org/10.61421/IJSSMER.2024.2102
Ingabire, M., & Dushimimana, J. D. D. (2024). Effect of procurement planning on organizational performance within the public sector: a case of Ruhengeri referral hospital in Musanze district, Rwanda. Science Mundi, 4(1), 72–86-72–86. ISSN: 2788-5844 
Jayatilaka, B. (2002). IT Sourcing—A Dynamic Phenomenon: Forming an Institutional Theory Perspective Information systems outsourcing: enduring themes, emergent patterns and future directions (pp. 100-130): Springer. https://doi.org/10.1007/978-3-662-04754-5_5
Jensen, P. A. (2017). Strategic sourcing and procurement of facilities management services. Journal of Global Operations and Strategic Sourcing, 10(2), 138-158. https://doi.org/10.1108/JGOSS-10-2016-0029
Ketema, E. (2017). The Effect Of Strategic Sourcing Practice On Organizational Performance: Sourcing Perception Survey Of Amref Health Africa In Ethiopia. Addis Ababa University•academia.edu
Khojasteh, Y., & Ma, X. (2025). The Effects of Firm Actions on Customers’ Responses to Product Recall Crises in the Automobile Industry. Journal of Optimization and Supply Chain Management, 2(1), 46-58. 10.22034/ISS.2025.8623.1024
Kihanya, T. W., Wafula, M. K., Onditi, E. O., & Munene, A. M. (2015). The role of strategic sourcing on organization’s performance: a case study of Jomo Kenyatta University of Agriculture and Technology. International Journal of Scientific and Research Publications, 5(5), 1-11. ISSN 2250-3153
Kocabasoglu, C., & Suresh, N. C. (2006). Strategic sourcing: an empirical investigation of the concept and its practices in US manufacturing firms. Journal of Supply Chain Management, 42(2), 4-16.   https://doi.org/10.1111/j.1745-493X.2006.00008
Lawrence, S. A., & Mupa, M. N. (2024). Innovative approaches to enhancing logistics for adapting to the evolving demands of manufacturing companies in East Africa through improved lean strategies. World Journal of Advanced Research and Reviews, 23, 2179-2198. https://doi.org/10.30574/wjarr.2024.23.3.2840
Luzzini, D., Amann, M., Caniato, F., Essig, M., & Ronchi, S. (2015). The path of innovation: purchasing and supplier involvement into new product development. Industrial Marketing Management, 47, 109-120. https://doi.org/10.1016/j.indmarman.2015.02.034
Manyega, V., & Okibo, W. (2015). Effects Of Supplier Selection On Procurement Performance Of Public Institutions. International Journal of Economics, Commerce and Management, 111(9), 595-610. http://hdl.handle.net/20.500.12493/2602
March, J. G., & Olsen, J. P. (1983). The new institutionalism: Organizational factors in political life. American political science review, 78(3), 734-749. https://doi.org/10.2307/1961840
Mclennan, M. The global risks report 2022 17th edition. 2022. World Economic Forum Cologny, Switzerland.
Mellat-Parast, M. (2015). An institutional theory of quality outcomes in strategic supply chain partnership. International Journal of Quality & Reliability Management, 32(4), 346-360. https://doi.org/10.1108/IJQRM-09-2012-0133   
Mgawe, N. W., & Masanja, N. (2018). Influence of procurement practices on performance of construction projects in Tanzania: a case study of National Housing Corporation. Saudi Journal of Humanities Social Science, 3(9), 1121-1127. 10.21276/sjhss.2018.3.9,12
Musah, L. (2025). Enhancing Supply Chain Performance and Agility in the Healthcare Industry Through Big Data Analytics: A Complex Adaptive Systems Theory Approach. Management Science and Information Technology, 2(1), 1-19. 10.32971/als.2025.002
Neisi, A. H., Bavarsad, B., & Sorkheh, S. (2025). Investigating and Ranking the Factors Affecting Integrated Supply Chain Performance in Context of Industry 4.0 by Using Fuzzy ANP Method. Management Science and Information Technology, 2(1), 70-89. 10.22034/ISS.2025.8765.1026
Njiri, J. W., & Munene, R. (2024). Influence of procurement management practices on operational performance of Nakuru Level 5 Referral Hospitals in Nakuru County, Kenya. International Academic Journal of Procurement and Supply Chain Management, 3 (2), 321-355. https://iajournals.org/articles/iajpscm_v3_i2_321_355.pdf
Panga, F., & Mahuwi, L. T. (2020). Procurement Best Practices And Performance Of Public Institutions In Tanzania Experience From Higher Learning Institutions. http://41.59.211.104:8080/xmlui/handle/123456789/205
Poponcini, L. (2024). Global Supply Chains: Opportunities and Challenges for Africa. Global Trade and Customs Journal, 19(7/8). https://doi.org/10.54648/gtcj2024060
Ruhuka, I., & Dushimimana, J. D. D. (2024). Effect of contract management practices on organizational performance of Rwanda development board (2017-2022). Science Mundi, 4(1), 100–111-100–111. eISSN: 2788-5844
Steinle, C., & Schiele, H. (2008). Limits to global sourcing?: Strategic consequences of dependency on international suppliers: Cluster theory, resource-based view and case studies. Journal of purchasing and supply management, 14(1), 3-14. https://doi.org/10.1016/j.pursup.2008.01.001
Talluri, S., & Narasimhan, R. (2004). A methodology for strategic sourcing. European journal of operational research, 154(1), 236-250. https://doi.org/10.1016/S0377-2217(02)00649-5
Teferi, E. T., Assefa, T. T., Tilahun, S. A., Wassie, S. B., Minh, T. T., & Béné, C. (2024). Bridging the gap: Analysis of systemic barriers to irrigation technology supply businesses in Ethiopia. Agricultural Water Management, 303, 109004. https://doi.org/10.1016/j.agwat.2024.109004
Temesgen, B. (2024). Supply Chain Resilience Strategies Adopted in a Developing Country Following Recent Global Disruptions: An Ethiopian Case. Journal of Supply Chain Management Systems, 13(2).  ISSN 2277-1387
Udoba, B. N., & Mwalukasa, B. E. (2025). The Effects of Procurement Planning on Public Procurement Performance. Asian Journal of Management, Entrepreneurship and Social Science, 5(01), 23-39.
van der Westhuizen, J., & Ntshingila, L. (2020). The effect of supplier selection, supplier development and information sharing on SME’s business performance in sedibeng. International Journal of Economics and Finance Studies, 12(2), 153-167. 10.34109/ijefs.202012203
Vitasek, K. (2016). Strategic sourcing business models. Strategic Outsourcing: An International Journal, 9(2), 126-138. https://doi.org/10.1108/SO-02-2016-0003
Whipple, J. M., & Roh, J. (2010). Agency theory and quality fade in buyer‐supplier relationships. The International Journal of Logistics Management, 21(3), 338-352. https://doi.org/10.1108/09574091011089781
Yildiz Çankaya, S. (2020). The effects of strategic sourcing on supply chain strategies. Journal of Global Operations and Strategic Sourcing, 13(2), 129-148. https://doi.org/10.1108/JGOSS-01-2019-0002
Zu, X., & Kaynak, H. (2012). An agency theory perspective on supply chain quality management. International journal of operations & production management, 32(4), 423-446.. https://doi.org/10.1108/01443571211223086
Management Science and Information Technology
Volume 2, Issue 3
September 2025
Pages 216-231

Files

Share

How to cite

Statistics