Knowledge transfer in institutionalised supplier development and organisational performance: evidence from the construction industry in Zambia.
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Date
2021
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Abstract
Globally, the economic rationale for supporting SMEs using public procurement policy
is well acknowledged and justified. Public procurement policy can be implemented directly
through institutionalised supplier development initiatives such as Preferential and Reservation
schemes, financial support, subcontracting and training. However, the efficacy of these initiatives
on knowledge transfer and performance improvement are still underexplored. The purpose of the
study is to examine the effect of knowledge transfer from institutionalised supplier development
initiatives on the operational performance of local contractors. The study also investigates the
mediating role of absorptive capacity on the relationship between knowledge transfer and
operational performance. Additionally, the research investigates the moderating effect of
institutional factors on the relationship between institutionalised supplier development initiatives
and knowledge transfer. The study used a mixed-method strategy, consisting of nine expert
interviews and 171 questionnaire responses from local contractors in Zambia.
The qualitative findings revealed that the implementation of institutionalised supplier
development is strongly affected by institutional factors such as political influence and
favouritism, corruption, inadequate procurement regulatory regime, weak institutional oversight,
and monitoring systems. However, the initiatives contributed to information dissemination and
knowledge transfer. The survey findings established that direct institutionalised supplier
development, such as the 20 per cent subcontracting policy and training, were significantly
associated with knowledge transfer. However, the association between indirect institutionalised
supplier development such as the Construction Finance Initiative, Preferential and Reservation
schemes and knowledge transfer was insignificant.
Furthermore, the study demonstrated that knowledge transfer indirectly improves the
local contractor operational performance through overall absorptive capacity. Additionally,
regulatory compliance and government support moderate the relationship between
institutionalised supplier development and knowledge transfer. Moderation interactions indicated
that low regulatory compliance is associated with high knowledge transfer, while government
support is associated with high knowledge transfer at all levels.
The research advances a more nuanced understanding of the influence of absorptive
capacity and institutional factors in implementing institutionalised supplier development using
evidence from the construction industry in Zambia. The study proposes a number of
recommendations to the top management of construction companies and the government.
Description
Doctoral Degree. University of KwaZulu-Natal, Durban.