BUILDING COMPETATIVE ADVANTAGE THROUGH

SUPPLY CHAIN COLLABORATION

BAHIR DAR TEXTILE SHARE

COMPANY IN FOCUS

BY: HAILEMARIAM FENTIE------------------------------------------------ ID No GSRB 761/12

ADVISOR: DR - ZERAYEHU SIME

NOV.2020 G.C

Bahir Dar, Ethiopia

 BUILDING COMPETATIVE ADVANTAGE THROUGHT

SUPPLY CHAIN COLLABORATION

BAHIR DAR TEXTLE SHARE

COMPANY IN FOCUS

BY : HALEMARIAM FENTIE-------------------------------ID No GSRB 761/12

THESIS PROPOSAL SUBMITTED TO YOM POST GRADUATE COLLEGE

DEPARTMENT OF MASTERS OF BUSINESS ADMINISTRATION (MBA) IN PARTIAL
FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTERS OF ARTS IN
MASTERS OF BUSINESS ADMINISTRATION (MBA)

YOM POST GRADUATE COLLEGE DEPARTMENT OF MASTERS OF BUSINESS

ADMINISTRATION (MBA)
 Acknowledgements

First and foremost, I would like to thank GOD for his love and forgiveness throughout my life. I
would like to thank my advisor Dr. ZERAYEHU SIME for his guidance I would like to express
my sincere gratitude, to my mother MENALUSHE MENGISTU.

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Table of Contents
Acknowledgements ................................................................................................................................................ i
LIST OF TABLES............................................................................................................................................... iv
LIST OF FIGURE ................................................................................................................................................ v
ACRONYMS ....................................................................................................................................................... vi
CHAPTER ONE................................................................................................................................................... 1
1. INTRODUCTON .......................................................................................................................................... 1
1.1 Background of the study ......................................................................................................................... 1
1.2. Statements of the problem ..................................................................................................................... 4
1.3. Basic research question .......................................................................................................................... 6
1.4. Objective of the study ............................................................................................................................. 7
1.5. Significance of the study ......................................................................................................................... 7
1.6. Scope of the study …………………………………………………………………………………………..7

1.7. Organization of the research .................................................................................................................. 8

CHAPTER TWO .......................................................................................................................................... 9
2. REVIEW OF RELATED LITERATURE ................................................................................................ 9
2.1. Theoretical reviews ................................................................................................................................ 9
2.2. Empirical Review ................................................................................................................................. 12
2.3. Competitive advantages ....................................................................................................................... 16
2.4. Measurements of competitive advantage ............................................................................................. 17
2.5 Gaps in the Literature and conclusion .................................................................................................. 18
2.6. Conceptual frame work........................................................................................................................ 19
CHAPTER THREE............................................................................................................................................ 20
RESEARCH DESIGN AND METHODOLOGY .......................................................................................... 20
3. INTRODUCTION ...................................................................................................................................... 20
3.1. Research Philosophy and Approach .................................................................................................... 20
3.2. Research design .................................................................................................................................... 21
3.3. Population and sampling ...................................................................................................................... 22
3.4 Variables and Measures ........................................................................................................................ 24
3.5. Data collection instruments ………………………………...……………………………………………24
3.6. Data collection procedure .................................................................................................................... 25
3.7. Methods of data analysis ...................................................................................................................... 26
3.8. Reliability and validity tests ................................................................................................................. 28
3.8.1. Reliability test .................................................................................................................................... 28

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 3.9. Ethical consideration ..................................................................................................................................29
Work plan…………………………………………………………………………………………………………..30
References…………………………………………………………………………………………………………..31
ANNEX 1.A…………………………………………………………………………………………………………38

PART I: DEMOGRAPHIC INFORMATION……………………………………………………………………39

PART 2: SUPPLY CHAIN COLLABORATION…………………………………………………………………40

PART 3: COMPETATIVE ADVANTAGE ………………………………………………………………………42

iii
LIST OF TABLES

Table-3. 1 the number of worker in each selected department.

Table 3.2- The sample size from each selected department in the company

Table 3.3-Reliability of the Survey

iv
LIST OF FIGURE

Figure 2.1- Conceptual frame work

v
ACRONYMS

SCM- supply chain management

SCC-supply chain collaboration

RBV- recourse base view

CNT- Collaborative Network Theory

PAT- Principal Agent theory

BDTSC-Bahir Dar textile Share Company

vi
 CHAPTER ONE

1. INTRODUCTON

1.1 Background of the study

Global competition and advancing technology's render borders irrelevant and link companies
closely. supply chain with the networks of suppliers, plants ,channels as distributors, retailers and
others that participant in the sales ,delivery and production of goods and services are growing
increasingly more complex(Christopher,2011)

There are no sources in the current document.This globalization of supply chain has forced
companies to look for more effective ways to coordinate the fellow of materials into and out of the
company .one of the ways to improve competitiveness of a company is to use a supply chain
strategy as a competitive weapon.

Supply chain management is the coordination of the chain of events between supply chain
members associated with the movement of goods and services from raw materials to the end
consumer (Mentzer et al., 2001) ;( Richey et al, 2010).

However, it has been suggested that supply chains can contribute more to sustaining success by
seeing partners actively work together. The partners can create new, joint capabilities by
collaborating across the supply chain (Nyaga et al., 2010) (Daugherty, 2011; (Min et al., 2005)
(Fawcett et al., 2012)

Supply chain collaboration means when two or more autonomous firms are working jointly to plan
and execute supply chain operations (Simatupang and Sridharan, 2002) (Whipple et al., 2010)
.Many collaboration dynamics have been identified as being important in improving supply chain
performance (Ellram, and Cooper,1990) &( Horvath. Collaboration,2001 ) and, as such, may be
considered as a core capability ( M. Barratt, 2004) & (Bowersox, et al, 2003)

Moreover, collaboration of supply chain facilitates the cooperation of participating members along
the supply chain to improve performance (Bowersox, 1990). The benefits of collaboration include
revenue improve, cost reductions, and operational flexibility to cope with high demand

1
uncertainties.( Fisher,1997)& ( Lee, et al,1997). Thus, supply chain Collaborative partner
relationships can help firms to increase competitive advantage (Mentzer et al., 2000).

Supply chain collaboration involves a long-term relationship where participants cooperate, share
information, and work together to plan and even modify their business practices to improve joint
performance (Whipple et al., 2010). Trust worthiness promotes collaborative planning in the
supply chain which results in informed demand forecasting, reduction of uncertainty and
management of conflicts of interest (Chowdhury 2012). The collaborations lead to enhanced
performance through risk sharing, a reduction of transaction costs, and process efficiencies and/or
improvements (Nyaga et al., 2010; Cao and Zhang, 2011; Fawcett et al., 2012).

When we come Supply chain collaboration in the textile supply chain is that between suppliers
and buyers (supply chain partners) existing in the chain .The supply chain partners are cotton
producers, ginners, yarn suppliers, manufacturers, wholesalers and retailers. Collaboration among
them can bring benefits to all the partners. It is evident they can improve profitability, reduce
waste, inventory, lead-time and contribute more valuable relationships between supply chain
partners. Increasing competition in the textile market makes supply chain management (SCM) a
viable initiative that enhances sustainable competitive advantage. Attaining a competitive textile
and apparel supply chain network needs innovation, efficiency, flexibility, and high quality as their
strong strategic approaches (Thatte AA, et al, 2013).

Vanathi R, & Swamynathan, (2014) discuss textile company Supply chain management is the
supporting tool for efficient business processes. All industries have started adapting supply chain
management to compete globally. Textiles are no way an exception to this strategy and also
HaBrookshire et al,( 2013) States that one must acknowledge businesses‟ social and
environmental practices along with all business decisions and strategies based on profit
maximization. Therefore the goals of supply chain members‟ activities must gauge both financial
and nonfinancial consequences. Global textile contributors like the U.S, China, Hong Kong,
Bangladesh, Pakistan, Turkey and India have started adapting supply chain strategies to sustain
successfully.

Researches on the supply chain started in the early1990‟s across various industries. The following
literatures try to visualize the importance of textile supply chain management simultaneously with
supply chain collaborations, which leads to competitiveness. Fragmentation has made the U.S.

2
textile and apparel industry more vulnerable in facing global competition (Dickerson, 1999).
Teng.G, (2005) Provide recommendations based on the evaluation of strengths and weaknesses
that may be used as references for small companies to increase their potential to be active partners
in the US supply chain. (Jinfu W, 2009). Give an insight into the application of e-commerce and
the supply chain in the textile and apparel industry and how it improves Chinese textiles. In the
Chinese textile industry researches have focused on the concept of the rapid-response eco-supply
chain (Du Let al, 2010), (Lam.j & postle, 2006) Studied the awareness of supply chain
management practices in Hong Kong textiles and provided a selected bibliography to develop
supply chain strategies. Today, from clothing and textile producers‟ perspective, their supply chain
is extremely fragmented and globalized (Brookshire.j & Dyer.b, 2008).

When we look competitiveness of Ethiopian textile industry, recently the Ethiopian textile sector
has become beneficiary from opportunities in the global market such as AGOA giving quota and
duty free access to the USA market for sub- Saharan African countries However, export of textile
and garment products does,t competitive advantage, even among the top 10 export products of
Ethiopia (Alem, 2009). There are many factors that could potentially affect competitiveness of
Ethiopian textile industry among these factors supply chain collaboration is the major one. The
high complexity of the supply chain of cotton value chain consisting of many interacting links that
need networking of inputs (collaboration between stakeholders, suppliers, customers) have
resulted in the poor performance of the sector (Rahel,2010).

According to Carter (2009), supply chain collaboration is a performance improving approach that
develops seamless linkage between the various actors, levels, and functions within a supply chain
to optimize customer service.

Since the Ethiopian modern textile industry is a recent phenomenon, until now Ethiopian textiles
researches on supply chain practices have approached the issue from different perspectives
however no one has discuss how to achieve competitive advantage than compotator by
implementing supply chain collaboration strategy because of this practice of supply chain
management makes it difficult to talk about supply chain collaboration in the textile and garment
industry. SCM practices have not yet been very widely adopted in developing countries. (Ramesh
A et al,, 2008). While much work has been accomplished when investigating supply chain
collaboration, there is still more to examine and understand with the topic (Daugherty, 2011) .

3
The purpose of researching this subject is “to give textile companies a deeper understanding of the
importance of establishing, developing and maintaining strong supply chain collaboration in order
to achieve competitive advantage.”

1.2. Statements of the problem

Firm performance may be a possible, but not necessarily assured, outcome of supply chain
collaboration (Stank et al., 2001, Cao and Zhang, 2011).

The challenges of the competitive marketplace often require firms to look outside their
organization for assistance in meeting the expectations and requirements of customers. In this case,
firms actively seek partners to collaborate by utilizing joint effort and skills to provide value
neither firm could wholly generate individually (Corsten andKumar, 2005).

Collaboration has recently received increased attention in the supply chain literature; an increasing
number of enterprises recognize the importance of working and operating together to resolve
common problems and achieve desired goals (Barratt, 2004; Corbett et al., 1999; Sch€oggl et al.,
2016; Seliger et al., 2015; Wagner et al., 2002). Collaboration is also viewed as a business process
whereby collaborative partners work together toward common goals that mutually benefit the
partnering firms (Mentzer et al., 2008; Skjoett-Larsen, 2003).

Several authors argue that a supply chain agent's ability to compete is strongly related to its ability
to collaborate with suppliers at various levels in the chain as a way to construct more efficient and
responsive supply chai ns (Christopher, 2005; Gunasekaran and Patel, 2001; Lamming, 1993).

In particular, the benefits associated with closer collaboration, according to Lee et al. (2007),
involve cost reductions and revenue enhancements as well as flexibility when dealing with supply
and demand uncertainties. Crook et al. (2008) refer to collaboration as a long-term, winwin, open
information exchange type of agreement in which both parties engage in joint efforts to improve
supplier performance and commit to quality, cooperation, and dispute resolution.

4
Many studies have found Supply chain collaboration has been argued to enhance firm performance
(Simatupang and Sridharan, 2004; Squire, Cousins, Lawson and Brown, 2009; McLaren et al.,
2002).

By working with supply chain partners, firms are expected to multiply the outcomes of the effort
from working alone (Wilding, 2006). Such outcomes include better level of responsiveness and
service level improvements from their supply-chain collaborative programs (Holweg et al., 2005;
Brown et al., 2009; McLaren et al., 2002). Yet, firms still primarily run their businesses in the
traditional way of maximizing local profit rather than maximizing the profit of the entire supply
chain as a whole (Benavides and de Eskinazis, 2012). Hence, SCM has gained an interest from
both academics and practitioners for more than two decades (Cousins, Lawson and Squire, 2006).
One of the current focuses of SCM is considerably collaboration (Benavides and de Eskinazis,
2012; Chan et al., 2012; Verdecho et al., 2012; Ramanathan and Gunasekaran, 2012; Verdecho et
al., 2012)

However there are certain barriers of collaboration, as Barratt (2004) defined one of the important
barriers are the members of the supply chain who are not sharing information willingly. Delbufalo
(2012) discussed that the lack of trust between supply chain‟s members is the important barrier.
Merchant et al. (2011) elaborated the barrier is the members who do not want to handle additional
work and responsibility. Palmer et al. (2012) defined the requirements of mutuality and symmetry
as the barrier. Cruijssen (2012) discussed that the hindrance were the members with no
commitment about clearly of benefits, costs, and risk.

When we come to Ethiopian textile industry context, (Rahel.S, 2010) states the Weaknesses of
Ethiopian textile company. Operational flexibility of the industries is very poor, no sufficient
design nor product development exist and fashion designers are nonexistent or poor innovation
capacity, the garment industry cannot fulfill the demand required by markets due to poor quality
of textile products. Quality level provided by the Ethiopian producers does not satisfy the requests
of export clients since quality improvement systems are not implemented effectively in the
industries, high production cost, low level of supply chain collaboration .Due to these and other
unexplored related problems, Current Ethiopian textile industry competitive position is low in the
international and domestic market to their competitors. Therefore; the discussion above has given
rise to the main research problem ,To alleviate such problem facing to Ethiopian textile

5
industry there is a need to investigate the effect of supply chain collaboration on textile company
competitive advantage in case of Bahir Dar textile share company.

Bahir Dar textile Share Company is one of the textile manufacturing companies in Ethiopia, which
is found in northwest parts of the Amhara region (Bahir Dar). As it is been pre-observed by
researcher these problems affecting Ethiopian textile companies are also complained by company
employees and stakeholders. However, locally there is no previous research that has been
empirically conducted at Bahir Dar textile Share Company on supply chain collaboration and
relationship with competitive advantage.

1.3. Basic research question

What is the impact of supply chain collaboration on competitive advantage for the textile
organization in case of Bahir Dar textile Share Company?

1.3.1. Sub-questions:

For better understanding of research problem under investigation, the basic research question is
unfolded in to the following sub-research questions:

What is the effect of information sharing on BDTSC competitive advantage?

What is the effect of trust on BDTSC competitive advantage?

What is the effect of long term relationship on BDTSC competitive advantage?

What is the effect of risk & reward sharing on BDTSC competitive advantage?

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1.4. Objective of the study
“Examine the impact of supply chain collaboration on competitive advantage of Bahir Dar textile
share competitive advantage company”.

1.4.1. Specific objectives

To examine the effect of information sharing on BDTSC competitive advantage.

To examine the effect of trust on BDTSC competitive advantage.

To examine the effect of long term relationship on BDTSC competitive advantage.

To evaluate the effect of risk & reward sharing on BDTSC competitive advantage.

1.5. Significance of the study

This study is important because it will help the company to enact appropriate supply chain
management strategy in order to enhance proper supply chain collaboration of textile industry; this
will increase the competitive advantage of the company which had an impact on modernizing
businesses. The study will also help students and other scholars to gain knowledge in terms of
information that will be attained during this study .The study is an enhancement to the academic
body of knowledge for researchers, while to other scholars, it will be a source of reference material
on the subject, useful for further study. Finally, beneficiaries from the study will be the companies
in the textile industry; they will use the findings to know how to enhance their competitiveness.

1.6. Scope of the study

The topic well be cover the magnitude of supply chain management strategy (supply chain
collaboration) through the indicator of Trust, top management commitment, information sharing,
long term relationship, risk and reward sharing on the competitive advantage of Bahir Dar textile
share company. Competitive advantage will be measured by cost, Quality, flexibility, cost,
innovation. The study addresses only employees who work under different departments (operation
department, sales department, purchasing department, quality assurance department) and it doesn't
consider the view of customers and other departments that are found in the company. The
geographical scope of the study covers the city of Bahir Dar because the company

7
covered under the study is found in the city. This study is an explanatory survey research and
analyzed by using descriptive and inferential statistics.

1.7. Organization of the research

The proposed study comprises five respective chapters in which the researcher clearly state the
entire process of the study, this include: Chapter one: Introduction This chapter would contain the
background of the study, statement of the problem, objectives of the study, basic research
questions, hypothesis, scope of the study, significance of the study and limitation of the study, .
Chapter Two: Review of Related Literature This part of the study deals with the literature (theory
and Empirical evidences) relevant to the proposed study. The division of the chapter will be on the
topic from previous studies. Chapter Three: Research Methodology of the Study In this chapter
the researcher described the type and design for the proposed research that is adapted from the
previous studies, the subject/participant of the study, the sources of the data, the data collection
instruments to be employed, the procedures of data collection and the method of data analysis.
Chapter Four: well be including Results and discussion this chapter also summarize the results,
and findings of the study, and also interpret or discuss the findings. This part may use extensive
use of literature review. Chapter Five: Summary, Conclusions and Recommendations.

8
CHAPTER TWO
2. REVIEW OF RELATED LITERATURE
2.1. Theoretical reviews
The study will be based on two theories of supply chain management namely; RBV, CNT, PAT,
theory.

2.1.1. Resource based view Theory (RBV)

In this thesis, RBV theory is used to explain the impact of supply chain collaboration on
competitive advantage and firm performance (Cao and Zhang, 2011). Particularly on the aspect of
resource utilization in the collaboration process (Barney, 2012; Squire, Cousins, Lawson and
Brown, 2009).
In RBV, firms combine their resources in a unique manner to establish a competitive advantage
over their competitors (Barney, 1991). To sustain their advantage, such an approach has to be
difficult to replicate (Barney et al., 2001; Dyer and Singh, 1998). To gain a sustained competitive
advantage, firms may own scarce resources and assets and utilize them together with their core
capability and competencies (Knudsen, 2003; Barney, 1991). RBV argues that an investment on
relational specific assets can build competitive advantage of the supply chain partners because
such assets are scarce and difficult to imitate (Jap, 2001; Barney, 1991). Moreover, supply chain
collaboration enables the firms to focus on their core competencies. This results in increased
specialization and improved economy of scale, enhancing their competitive advantage (Barney,
2012; Park et al., 2004; Barney, 2001). RBV has a primary focus on explaining the impact of
firms‟ strategic resources, core competencies and capabilities on the performance, economic rents
and sustained competitive advantage of the firm (Barney, 1991; Grant, 1991). The terms resources
and capabilities can be used interchangeably as both tangible and intangible assets employed
according to the strategy of the firm (Ray et al., 2004).

Moreover, RBV argues that firms possessing strategic resources will have more potential to benefit
from opportunities and mitigate the impacts of threats in the business circumstances rather than
those who possess only marginal resources (Cousins and Menguc, 2006; Barney, 1991). Such
resources have to be non-substitutable and no imitable as well as scarce among the competitors of

9
the firms (Barney, 2012; Cousinsand Menguc, 2006).According to the possibility of an incomplete
market for such resources; it is argued that the strategic resource should be utilized within the
boundary of the firm (Dierickx and Cool, 1989). However, some resources, that cannot be bought
or exchanged such as reputation, have to be developed within the firm over a significant time
period. Hence, such resources are considered as the non-tradable and nontransferable resources
which are the key to building competitive advantage of the firm (Cousins and Menguc, 2006).

2.1.2. Collaborative Network Theory (CNT)

In proposal, CNT was used to explain the impact of collaboration on firm performance. Different
types of supply chain collaboration are defined based on CNT. They are information sharing,
frequent two-way communication. Moreover, CNT also explain the role of social capitals in the
relationship such as trust and commitment in mediating the impact of supply chain collaboration
on firm performance. The key determinants of the performance of the firm not only include the
effectiveness of the cooperation between the firm and its partner but also with the partners‟
partners (Halldórsson et al., 2007). Collaborative Network Theory (CNT) is used as the foundation
of the reciprocal effect in inter-firm relationships (Oliver, 1990). Hence, the interactions between
firms and other players in the tiers of the supply chain become more vital (Håkansson and Ford,
2002). An effective relationship among supply chain partners can help facilitate a combination of
the resources owned by the firms. Resource combination results in better outcomes than those
achieved by a single firm acting alone (Halldórsson et al., 2007). This combination can be called
a quasi-organization (Håkansson and Snehota, 1995; Håkansson, 1987) or supply chain
collaboration (Cao and Zhang, 2011; Simatupang and Sridharan, 2005). CNT argues that the value
of the resources can be expanded by its combination with other resources, then building effective
inter-firm relationships within the network or supply chain can be more important the resource
possessions per se (Halldórsson et al., 2007). Therefore, the efforts of the firms in terms of creating
successful relationships with their supply chain partners are important (Halldórsson et al., 2007).

The significant contribution of CNT to the determination of the inter-firm relationships is the role
of “personal chemistry" between the supply chain partners. Such personal chemistry includes trust
via supply chain collaboration such as communication as well asmutual adoption in terms of
management systems and culture (Oliver, 1990). By establishing information sharing and
collaborative communication, firms can build the relationships with their supply chain partners

10
through the social exchange process to improve their performance (Halldórsson et al., 2007). In
CNT, a network is believed to be in a state of dynamic momentum, rather than a point of optimal
equilibrium (Halldórsson et al., 2007). Hence collaboration between firms and their supply chain
partners aims to govern such dynamics, which includes both exchange process e.g., information,
products (goods and services) and social exchange and adaptation process e.g., personal, technical,
legal, logistics and administration process (Nyaga et al., 2010; Johanson and Mattsson, 1987).

2.1.3. Principal Agent theory (PAT)

In this proposal, PAT was adopted to support an incentive alignment dimension of supply chain
collaboration. Appropriate alignment of the incentives for the supply chain partners can build
mutual trust and develop commitment among the two parties (Simatupang and Sridharan, 2005).
An appropriate incentive alignment in the supply chains is expected to build trust and commitment
between collaborating firms. Moreover, this will also improve intention of both partners to increase
their performance to earn fair rewards. Furthermore, strong relationships in the supply chain will
also be a source of competitive advantage (Simatupang and Sridharan, 2004). Principle Agent
Theory (PAT) has been applied to understand the dynamics in supply chain relationships (Fayezi
et al., 2012). In PAT, several problems in inter-firm transaction can arise from the division of
ownership and control over economic transaction between the principal and the agent. Such
problems include “conflicting objectives, differences in risk aversion, outcome uncertainty,
behavior based on self-interest, and bounded rationality" (Halldórsson et al., 2007, p. 287).
According to PAT, the mechanism that governs the relationship between the supply chain partners
is the conflict between the two (Segars and Grover, 1998). The objective of PAT is to design and
build the contract that minimize such agency problems (Manatsa and McLaren, 2008).The “most
efficient contract" should have both the appropriate mix between behavioral based and outcome-
based incentives in order to motivate the agent to behave in the benefit of the principal
(Halldórsson et al., 2007; Eisenhardt, 1989; Logan, 2000). In SCM, aligning the right mix of
incentives in a supply chain relationship is critical (Halldórsson et al., 2007). Asymmetric
information is the main cause of misalignment of incentives in the supply chain. Hence, creating
a formal or informal contract with the right mix of reward and penalties can mitigate such
misalignment (Wuyts and Geyskens, 2005; Narayanan and Raman, 2004; Baiman and Rajan,
2002).

11
2.2. Empirical Review
This chapter reviews relevant literature from preceding study, that is focus on the objectives and
theoretical threshold of this study and also review related and current literature on the concept of
supply chain collaboration on competitive advantage, barriers of supply chain collaboration, the
effect of supply chain collaboration on competitive advantage.

2.2.1 Supply chain collaboration

Supply chain collaboration is often defined as two or more companies working together to create
a competitive advantage and higher profits that cannot be achieved by acting alone (Simatupang
and Sridharan 2005). Simatupang and Sridharan (2008) SCC is the joint working among two or
more firms Through a supply chain to meet end customers satisfaction and the basic purpose of
collaboration is to optimize profit, for all chain partners and create a competitive edge.
Mentzeretal.(2001) SCC is a means in which companies involved in the supply chain are
responsively working together to achieve common objectives, and this is possible by sharing
knowledge, information, profits, and risk, and Collaboration is mutual objective that is more than
a written contract. SCC starts from the shallow transaction and ends with the responsive integrated
relationship and collaborative relationship lies on sharing of information and distribution of risk
among the partners (Goffin et al., 2006) Close supply chain collaboration is characterized by the
following aspects Bensaou, 1999; Das et al., 2006; Duffy, 2008; Goffin et al., 2006; Holweg et al.,
2005; Mentzer et al., 2000; Sheu et al., 2006; Spekman et al., 1998; Szwejczewski et al., 2005): a
long-term business relationship between (independent) organizations; close co-operation and co-
ordinated activities between business partners on aspects such as information sharing, joint
planning, joint demand management and joint inventory management; Bridging distinct groups
within and across firms. Shared/common objectives; Shared perspective of the merits of close ties;
and creating visibility. After all to measure this supply chain collaboration Anbanandam et
al.(2011)identified the following variables to constitute a collaboration indicator: top management
commitment, information sharing, trust among supply chain partners, long-term relationship, and
risk and reward sharing

2.2.2 Supply chain collaboration and competitive advantage

SCC is the joint working among two or more firms Through a supply chain to meet end customers
satisfaction and the basic purpose of collaboration is to optimize profit, for all chain partners and

12
create a competitive edge Simatupang and Sridharan (2008) , SCC is the involvement of the chain
members in coordinating activities that span boundaries of their organization in order to fulfill end
customer need (D.J. Bowersox ,1990)It is a new necessary strategy for firms to create competitive
advantage (L. Horvath,2001) (R. E. Spekman et al,1998) (Harrison. A & Now.C., 2002). Supply
chain partnering involves collaborative activities such as sharing information, synchronizing
decisions, sharing complementary resources, and aligning incentives with partners‟ cost and risks
so Collaboration can increase joint competitive advantage (S.D. Jap, 2000).

Benefits of supply chain collaboration include cost reductions and revenue enhancements (Lee et
al.,1997),Offering flexibility refers to the extent to which a firm‟s supply chain linkage supports
changes in product or service help (e.g., features, volume, and speed) in response to environmental
changes. It is also called customer responsiveness in literature (Kiefer and Novack, 1999; Holweg
et al., 2005), Quality refers to the extent to which a firm with supply chain partners offers quality
product that creates higher value for customers (Gray and Harvey, 1992; Li et al., 2006),
Innovation refers to the extent to which a firm works jointly with its supply chain partners in
introducing new processes, products, or services. Due to shorter product life cycles, firms need to
innovate frequently and in small increments (Handfield and Pannesi, 1995; Kessler and
Chakrabarti, 1996). Finally Kumar, 1996 state the indicators of supply chain collaboration are:
information sharing, trust, long term relationship, and risk & reward sharing of supply chain
partners so every supply chain partner needs them to improve their competitive advantage.
Therefore, a positive relation between the indicator of SCC and competitive advantage discuss as
follows.

2.2.3. Information sharing and competitive advantage

Information sharing is the continuous flow of communications between partners that occurs in a
formal or informal way and contributes for a better planning and control within the chain (Chen &
Paulraj, 2004; Cooper et al., 1997; Mentzer et al., 2001). The Global Logistics Research Team at
Michigan State University (1995) defines information sharing as the willingness to make strategic
and tactical data such as inventory levels, forecasts, sales promotion, strategies, and marketing
strategies available to firms forming supply chain nodes and also

Information sharing among SC partners will help improve forecast accuracy and hence will help
potential cost savings (Aviv, 2007). In addition information sharing provides significant benefits

13
to participating members first at the strategic level; information sharing of business objectives
enables individual managers to achieve mutual understanding of competitive advantage and the
system-wide supply chain as a starting point of collaboration (John W, 2000). Second At the
tactical level, the information integration helps the chain members to mitigate demand uncertainty
and cope with decision-making complexity at different levels of planning horizon and in different
organizations (Hau L. and Seungjin, 2001). moreover information sharing activities can improve
the collaboration between the processes of different supply chain members, leading to improved
supply chain collaboration, delivery accuracy, time-tomarket (Jarrell, 1998), customer satisfaction
(Spekman, 1988), and partnership quality (Lee and Kim, 1999). Therefore though information
sharing and the role of IT were accepted as significant fact in collaboration (Sanders & Premus
2005)

H1. Information sharing between supply chain partners positively influences competitive
advantage of the company.

2.2.4. Trust and competitive advantage

Trust is the extent to which supply chain partners perceive each other as credible and benevolent
(Doney and Cannon, 1997). Credibility reflects the extent to which a firm believes their
relationship partner has the expertise to perform effectively while benevolence occurs when a firm
believes their relationship partner has intentions and motives that will benefit the relationship
(Ganesan, 1994), Trust is an expectation that partners will not act in an opportunistic manner even
if short-term incentives exist (Chiles and McMackin, 1996). Trust enables co-operative behavior,
promotes improved relationships, reduces harmful conflict and allows effective response in a crisis
(Doney & Cannon, 1997, Gundlach & Murphy, 1993, Kumar, 1996, Mohr & Spekman, 1994).In
addition; trust worthiness promotes collaborative planning in the supply chain which results in
informed demand forecasting, reduction of uncertainty and management of conflicts of interest
(Chowdhury 2012). According to Fawcett et al. (2012) trust is affirmed when collaborative
relationships go beyond contractual obligations to include knowledge sharing, enhancing skills of
supply chain partners and joint strategy formulation.

Key outcomes of trust between firms in the supply chain include performance improvement
(Fawcett et al., 2012), long-term relationships (Nyaga et al., 2010; Humphries and Wilding, 2004),
risk mitigation (Chiles and McMackin, 1996). Moreover, it is believed that trust could mitigate the

14
transaction costs, which may incur when firms collaborate (Wilding and Humphries, 2006). It is
claimed to be a main reason when the higher level of trust, the better performance (Krishnan et al.,
2006; Hansen et al., 2002). Trust can eliminate unnecessary activities that firms need to do to
prevent opportunistic behavior from their collaborating partners (Lado et al., 2008).

In the words of Whipple et al., (2002) in a trustful, loyal and mutual collaboration, reducing costs
and improving performance. It is seen as a powerful instrument in achieving effective and efficient
supply chain management (Fu and Piplani, 2004; Mentzer et al., 2000).

H2. Having trust between supply chain partners positively influences competitive advantage of
the company.

2.2.5 Long term relationship and competitive advantage

In most markets, sustainable competitive advantages can be achieved by investing in long-term
relationships with supply chain partners (Dyer & Singh 1998) Relationship length represents the
average lifetime of the relationships between a firm and its major suppliers for the firm's major
product line (Tang and Rai, 2012). Long-term relationship assumes the members of the supply
chain are committed to the relationship by investing in equipment‟s and efforts to preserve the
strategy (Cooper & Ellram, 1993; Dyer & Singh, 1998; wyer, Schurr, & Oh, 1987; Ganesan, 1994).
Long-term relationships allow supply chain partners to benefit from relationship outcomes such as
knowledge and asset sharing (Cao & Zhang 2011)Further more sustainable competitive advantages
can be achieved by investing in long-term relationships with supply chain partners .(Dyer & Singh
1998). When supply chain members have a long-term business relationship, organizational
routines can be established among them inadvertently (Nelsonand Winter, 1982).

Long-term relationship enables supply chain partners to test the healthiness and flexibility of the
collaborative network, reduce operational costs, improve the quality of products and services and
superior business as well as supply chain performance (Nyaga et al. 2010).Long-term collaborative
relationships have the potential to enhance the efficiency of the supply chain (Hingley et al. 2015;
Pauraj, Chen & Lado 2012). Blackhurst Dunn and Craighead (2011) underscore that long-term
collaborative relationships reduce uncertainty and risks within the supply chain. This leads to the
following hypotheses:

H3. Long term relationships between supply chain partners have positive influences on
company competitive advantage.

15
2.2.6. Risk and reward sharing and competitive advantage
Sharing risk and reward for the supply chain partners can build mutual trust and develop
commitment among the two parties (Simatupang and Sridharan, 2005). An appropriate risk and
reward sharing in the supply chains is expected to build trust and commitment between
collaborating firms. Moreover, this will also improve intention of both partners to increase their
competitive advantage. Furthermore, strong relationships (risk and reward sharing) in the supply
chain will also be a source of competitive advantage (Simatupang and Sridharan, 2004). Risk and
reward sharing need to do to prevent opportunistic behavior of the collaborating partners (Sako
and Helper, 1998; Kwon and Suh, 2005). Because of this Risk and reward sharing is based on a
win-win relationship (no power), where organizations share investments on assets, project costs
and profits and losses (Chen& Paulraj, 2004; Cooper & Ellram, 1993; Mentzer et al., 2001).

Previous studies found that risk and reward sharing develops competitiveness of the collaborating
firm (Nyaga et al., 2010) through increased collaboration capability (Bae, 2012). Better
collaboration performance lead to higher levels of risk and reward sharing between collaborating
firms (Krause et al., 2007; Brown et al., 1995). Hence, long-term relationships in supply chain
could be established by an increased collaboration performance driven by a higher level of trust
(Hansen et al., 2002). In SCM, aligning the right mix of sharing risk and reward in a supply chain
relationship is critical (Halldórsson et al., 2007). Asymmetric information is the main cause of
misalignment of sharing risk and reward in the supply chain. Hence, creating a formal or informal
contract with the right mix of reward and penalties can mitigate such misalignment (Wuyts and
Geyskens, 2005; Narayanan and Raman, 2004; Baiman and Rajan, 2002).

H4. Risk and reward sharing between supply chain partners have positive influences on
company competitive advantage.

2.3. Competitive advantages

Competitiveness of a firm is its capacity to achieve its targets. These targets are likely to be
expressed in a variety of terms depending on the context (Barney 2002).Competitive advantage
exists when a firm has a product or service that is perceived by its target market customers as better
than that of its competitors (Gregory et.al, 2005).

16
According to Suhong Li et.al (2006), the empirical literature has been quite consistent in
identifying price/cost, quality, delivery, and flexibility as important competitive capabilities.
Soliman (1998) measure competitiveness quantitatively by cost, quality, delivery dependability,
flexibility and innovation as factors formulating such a competitive position. M. Porter (1985)
indicates that a firm experiences a competitive advantage when "its actions in an industry create
economic value and when few competing firms are engaging in similar actions." De Wit and Meyer
(1999), Buffam (2000), and Christensen (2001) indicate that a firm has a competitive advantage
when it has the means to edge out rivals when competing for the favor of customers.

2.4. Measurements of competitive advantage

2.4.1. Costs
A firms‟ ability to offer competitive prices or command premium prices is influenced by the costs
it incurs within the supply chain as well as the level of accompanying service it is able to offer.
Price affects both market share and profit. The price and value trade-off is one of the main
determinants of customer satisfaction (Tracey et al., 1999). An organization is capable of
competing against major competitors based on its pricing strategy (Li et al., 2006).

2.4.2. Quality
Quality measures the capability of the firm to design and produce products that would fulfill
customer expectations (Li et al, 2006). Quality has become one of the key competitive issues in
the global marketplace (Flynn et al., 1994). Quality is described as fitness for use and includes
product performance, durability and reliability. Quality is influenced by product design, incoming
quality from suppliers, manufacturing performance, and delivery performance. Quality can affect
the number of units sold and it is a key element of value-to-customer (Tracey et al., 1999).

Quality is also important for the acceptance of a product. High costs, low productivity, and loss of
market share are directly related to poor quality (Dramm, undated). Quality is meeting or
exceeding the expectations of your customer (Bishop, 1990).

2.4.3. Flexibility
The complex markets, fierce competition and fast changes in demand require that companies be
ready to react promptly to customers‟ needs. Flexibility can be understood as the ability to react
and adapt quickly to changes in the market due to an increase or decrease of customers‟

17
requirements, accelerating or decelerating the manufacturing processes when it is requested.
Bowersox, Closs, and Cooper (2007) and Adaptation refers to the specific modification made by
a firm to meet the requirement of exchange partner (Hallén, 1991; Mukherji & Francis, 2008).

2.4.4. Innovation
The capability of organizations to develop and implement new products and features can be
described as product innovation. The rapid pace of technological change and the demands of
customers for new and better products require firms to innovate continually and bring these
innovations to market as quickly as possible (Koufteras et al, 2002). The faster a firm can develop
a new product, the greater the likelihood that they can be first to market and reap pioneering
advantages (Kessler & Chakrabarti, 1999)

According to Meeus and Oerlemans (2000) innovation allows companies to growth and survives
in the complex markets. Also, according to the Organization for Economic Cooperation and
Development (2005) innovation is defined as “the implementation of a new or significantly
improved product (good or service), or process, a new marketing method, or a new organizational
method in business practices, workplace organizations, or external relations.”

2.5. Gaps in the Literature and conclusion

There are various studies that have been conducted to determine the effect and relationship
between supply chain collaboration and competitive advantage and most researchers used
secondary data from already published journals in order to analyze the data. But, this study depends
on primary data which allows the researcher to get first-hand information on current textile
industry supply chain collaboration activities and the effect of supply chain collaboration on
competitive advantage of the textile industry.

18
2.6. Conceptual frame work

INDEPENDENT VARIABLES DEPENDENT VARIABLE

SUPPLY CHAIN COLLABORATION

Information sharing

Trust
Competitive advantage
Long term relationship

Risk and reward

sharing
Source (Vanathi R, Swamynathan R., 2014)

19
 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3. INTRODUCTION
Research methodology involves various tactics and approaches that are used to conduct the study.
The research approaches and techniques help the researcher to achieve the research objectives.
One of the most important things in research is to understand the nature of the study and
generalizing it as qualitative or quantitative (Kothari, 2004).

According to Walsh and Wigens (2003), research methodology is a detailed plan that highlights
the different activities that are essential in performing the entire process of data collection
effectively. It is defined as a blueprint regarding the various steps to be followed in performing the
entire process of data collection. As indicated by Leedy (1999), it is essential that there should be
a systematic approach in solving the research problem so that the solutions as obtained to the
research problem have higher accuracy and validity.

Research methodology is the specific science of research that followed to accomplish

predetermined research (Aman, 2015). Hence, all specific methods that were employed in the
course of accomplishing this proposal are presented in this chapter. It includes research design,
sampling technique, sample size determination, sources of data, method of data collection and
analysis and lastly reliability and validity of the study.

3.1. Research Philosophy and Approach

3.1.1. Research paradigm
As stated by Saunders et al., 2012, there are three general philosophical paradigms explaining
social phenomena in business and management research, Pragmatism is one of those philosophical
paradigms.

Pragmatism states that the mixed or multiple methods including both quantitative and qualitative
data is possible and appropriate to provide more comprehensive evidence and strength within one
study rather than adopting one method (Saunders et al., 2012). Indeed, within a newly emerging
paradigm of pragmatism (that stresses the importance of shared interactions), it was made possible
to use both methodologies, where mixed, combined or integrated methods could be executed in a
sequential or a concurrent manner, thus addressing complex and multi-faceted research problems

20
in a dynamic manner (Howe, 1988). This should potentially allow a more complete understanding
of research problems (Creswell and Plano Clark, 2007).

Based on the above reason, this study is considered as pragmatic, in which both qualitative data
and quantitative data are necessary to achieve the objectives of the research. Consequently, the
philosophy of pragmatism has supported the researcher‟s choice of a combined method in this
study.

3.1.2. Research approach

According to Zikmund (2000) many good research projects combine both qualitative and
quantitative research approaches. Qualitative approach rate from slight to highly significant
effect based on qualitative judgments, such as perception and attitude. While quantitative
research plainly and distinctively specifies both the independent and the dependent variables under
investigation.

Therefore, mixed research approach were employed for this to generate rich data from
multiple sources, which are both quantitative and qualitative type by giving much emphasis
for quantitative approach. Basically, quantitative method is compatible with many studies because
it allows the research problem to be conducted in a very specific and set terms (Nachmias and
Nachmias, 2000).

3.2. Research design

The research design is considered by Creswell (2008) as the blueprint which defines the nature of
the data collected in a study so as enhance optimal achievement of the research aim and objectives.
As such, Saunders et al (2009) considers it necessary for researchers to select the most effective
research designs which best suits the nature of the data required to achieve their research aims and
objectives. In this study, the research will considering explanatory design to be the most effective
for this study. In the causal comparative research, the researcher examines how the independent
variables re affected by the dependent variables and involves cause and effect relationships
between the variables. The factorial design focuses on two or more categories with the independent
variables as compared to the dependent variable (Vogt, 1999). The causal comparative research
design provides the researcher the opportunity to examine the interaction between independent
variables and their influence on dependent variables.

21
Though explanatory design is limited to detailed analysis of the relationship between the research
variables (Trochim, 2006), it is quite useful in establish the cause-effect relationships more
effectively in a research study and to find answer for the question raised to be investigated.

3.3. Population and sampling

3.3.1. Sources of data Data collection
is integral part of the research design. Generally there are two types of sources of data namely
primary and secondary data sources. Primary data are those information obtained from the original
source while secondary data are those obtained as second hand data like from books and any other
sources which is not original (Kothari, 2004). The researcher were employed both primary and
secondary data‟s.

The researcher will be used primary data in this study were obtained directly from the BDTSC
employees. For that reason the information extract the truth about the problem, and make it to be
meaningful and useful.

3.3.2. Sampling technique

Colin and Fisher (2010) found that a sample is a representative of the whole population. The
purpose of taking a sample is to obtain a result that is representative of the whole population being
sampled without going to the trouble of asking everyone. Sampling technique is a definite plan for
obtaining a sample from a given population (Kothari 2004). It refers to the sample design or the
procedure the researcher would adopt in selecting items for the sample

For the purpose of this study, Stratified random sampling technique will be used. Moreover, a
Stratified random sampling technique will considered because of it is a suitable technique for
selecting a representative sample & to reduce bias. Kothari (2004) points out; if a population from
which a sample is to be drawn does not constitute a homogeneous group, stratified sampling
technique is generally applied in order to obtain a representative sample. Under stratified sampling
the population is divided into several sub-populations that are individually more homogeneous
than the total population (the different sub-populations are called „strata‟) and then we select items
from each stratum to constitute a sample. The cases under consideration of this research are having
different strata‟s (operation, sales, purchasing, quality assurance department) that is the reason to
select a stratified random sampling.

22
3.3.3. Sampling frame
The study population consisted of four department those are working in the line of supply chain in
Bahir Dar textile share company namely operation department , sales department, purchasing
department and quality assurance department. The study selected at random from each department.

Table-3. 1 the number of worker in each selected department.

No of worker Department
150 operation department
25 sales department
16 purchasing department
15 quality assurance department
206 Total
Source: Own survey result, 2020

3.3.4. Sample size

A representative sample for questionnaire will be selected from the employees of the company
based on Stratified and simple random sampling method but from the sample of each stratum
department head will selected for interview.

According to Taro Yamane's (1973), this study will applied a simplified formula to determine the
required sample size at 95% confidence level, and allowable error is 5% and number of employees
who work with in the selected department or strata are 206.
𝑁
n=
1+𝑁(𝑒)2

Where „n‟ is the sample size, N is the total number of employees in the company, and „e‟ is the
level of precision. Substitute numbers in formula:

206
n=
1+206(0.05)2

n=136

23
After calculating the sample size by substituting the numbers into the Yamane formula, the
numbers of sample is 136.

Table 2.3 - the sample size from each selected department in the company

SAMPLE SIZE No of worker Department

99 150 operation department
17 25 sales department
10 16 purchasing department
10 15 quality assurance department
Source: Own survey result, 2020

3.4 Variables and Measures

3.4.1. Variables of the study
As of in many social science; experimental and business researches, study variables are identified.
Researchers who focus on causal relations usually begin with search for its causes, and then effects.
The cause variable, or the one that identifies forces or conditions that act on something else, is the
independent variable. The variable that is the effect or is the result or outcome of another variable
is the dependent variable (also referred to as outcome variable or effect variable) (Creswell, 2008).

In this study also there were dependent and independent variables. Competitive advantage is a
dependent variable. Supply chain collaboration is independent variables.

3.4.2. Measurement of independent (Supply chain collaboration) variables

The independent variables (information sharing ,long term relationship, Trust and risk and reward
sharing )is measured by 15 items and the source of those item listed as follows ,information
sharing is measured by three item and long term relationship is measured by four item all are
adopted from the study by (Brito, etal, 2011), Trust will measured by four item adopted from the
study by (Talavera, 2013) and risk and reward sharing is measured by four item adopted from
the study by ( HuanFan & Gang, 2015) those question used to measure the variable attach in the
appendix 1A.

24
3.4.3. Measurement of dependent (competitive advantage) variables
This measure will used to determine “the extent to which an organization is able to create a
defensible position over its competitors” (Li et al., 2006: 111).

The dependent variable (Cost, quality, innovation and flexibility) is measured by 13 items and the
source of those item listed as follows Cost, measured by two item, quality is measured by four
item and innovation is measured by three item all they are adopted from the study by (Zhang,
2001) and flexibility is measured by four item and adapted from the study by (Brito, etal, 2011).
those question used to measure the variable attach in the appendix 1A.

3.5. Data collection instruments

Data collection is determined by the research technique selected for the study. Data can be
collected in a variety of ways, in different settings; field or lab and from different sources. It could
include interviews: face to face interviews, telephone interviews, computer-assisted interviews,
and interviews through electronic media; questionnaires that either personally administered, sent
through mail, or electronically administered; observation of individuals and events which could be
participant or non-participant (Greener & Martelli, 2015).

Questionnaires were the main source of data in this study. A questionnaire is defined by Marczyk
(2005) as a data collection tool comprising of questions that are prepared by the researcher to be
answered by the research participants concerning a particular research problem. The questionnaire
was formulated using Likert‟s 5-point scale where most of the questions were closed-ended, with
a few of them being open ended which were used to know the effect of supply chain collaboration
to competitiveness of the company. The 5 point scale was preferred in this analysis because its
effectiveness in facilitating robust statistical analysis in any research study and it gives freedom
for respondents to express their ideas without hesitation. Closed ended questions are very
convenient for factual data and usually they are easy for analysis and open ended questions offer
the advantage that the respondents are able to give their opinions freely and as precisely as possible
in their own words (Zikmund, 2000).

3.6. Data collection procedure

During the data collection, first a brief explanation about the questionnaire will given to each
participant on how to answer each question. The investigator tried to convince participants to take
time and answer the questionnaire in the company or their home but those who coudn‟t deliver the

25
questionnaires immediately were allowed to return on another day. During the collection of
questionnaires, the researcher checked whether all the questions were properly answered and
returned.

3.7. Methods of data analysis

Analysis is the application of reasoning to understand and interpret the collected data (Kothari
2004). Once the fieldwork has been completed, the data must be converted into a format that will
answer the research questions and or help testing the hypotheses. The appropriate analytical
technique is to be determining by the research design, and the nature of the data collected
(Creswell, 2014). Data analysis generally begins with the editing and coding of the data. The
editing process corrects problems such as interviewer errors prior to the data are transferred to a
computer. Editing is the process of checking and adjusting the data for omissions, legibility, and
consistency. The purpose of editing is to ensure the completeness, consistency, and readability of
the data to be transferred to data storage. The editor‟s task is to check for errors and omissions on
the questionnaires or other data collection forms. The editor may have to reconstruct some data.
Coding is the assignment of numerical scales or classifying symbols to previously edited data.
Coding may be the assigning of numbers or symbols before it goes to the computer. Data were
also presented using tabular and graphic representation of data which may take a number of forms,
ranging from computer printouts to elaborate pictographs. The purpose of each table or graph,
however, is to facilitate the summarization and communication of the meaning of the data.
Moreover, the proliferation of computer technology in business and universities has greatly
facilitated tabulation and statistical analysis. Commercial packages eliminate the need to write a
new program every time you want to tabulate and analyze data with a computer, Statistical Package
for the Social Sciences (SPSS), is commonly used statistical packages. These user friendly
packages emphasize statistical calculations and hypothesis testing for varied types of data. They
also provide programs for entering and editing data (Kothari, 2000). Lastly data were interpreted.
Interpretation refers to making inferences pertinent to the meaning and implications of the research
investigation and drawing conclusions. In order for interpretation, the data have to be meaningfully
analyzed.

In this study, both descriptive and inferential statistics were used to analyze and interpret the
findings. Demographic variables of the respondents were interpreted using descriptive statistics

26
and also used to analyze raw questionnaires using mean and standard deviation whereas, inferential
statistics were used to find out the relationship between the dependent and independent variables
(information sharing, trust, long term relation, risk and reward sharing) using Pearson coefficient
of correlation and multiple regression analysis via Statistical Package for Social Science (SPSS)
version 20.

Regression is the determination of a statistical relationship between two or more variables. When
there are two or more than two independent variables, the analysis concerning relationship is
known as multiple correlations and the equation describing such relationship as the multiple
regression equation. Multiple regression analysis was used so as to determine the influence of
independent variables on dependent variable. regression equations that manifest; the influence of
information sharing ,trust, long term relation, risk and reward sharing on competitive advantage of
the company. Therefore the regression equations were expressed as follows;

Y = α + βX1 + βX2 + βX3 + βX4 +…………………………………………………Equation

Where; Y = competitive advantage

α = Constant

β = Correlation coefficient

X1 = information sharing

X2 = trust

X3 = long term relation

X4 = risk and reward sharing

Correlation among the Dependent and Independent Variables Under research investigation
researcher are expected to understand concepts beyond the means and standard deviations of the
dependent and independent variables so researcher need to know how one variable is related to
another which comes with the concept of correlation. It is useful for determining the strength and
direction of the association between two scale and ordinal Bivariate Correlations. a Pearson
correlation matrix indicates the direction, strength, and significance of the bivariate relationships
of all the variables in the study. According to Field (2005) correlation coefficient is a very useful
means to summarize the relationship between two variables with a single number that falls between

27
-1 and +1.The general symbol for the correlation coefficient is „r‟. So, a perfect positive
relationship (r=+1.00) indicates a perfect positive relationship and an „r‟ of -1.00 indicates a
perfect negative relationship. Therefore, because of this, the researcher was used Pearson
coefficient of correlation to measure the strength of the association between individual variables.

3.8. Reliability and validity tests

It is not adequate just to measure social science constructs using any scale that we prefer. We also
must test these scales to ensure that: these scales indeed measure the unobservable construct
that we wanted to measure (i.e., the scales are “valid”), and they measure the intended construct
consistently and precisely (i.e., the scales are “reliable”). Reliability and validity, jointly called
the “psychometric properties” of measurement scales, are the yardsticks against which the
adequacy and accuracy of our measurement procedures are evaluated in scientific research
(Bhattacherjee, 2012). So, the researcher will checked for reliability and validity of the data
collected through survey.

3.8.1. Reliability test

Reliability is the degree to which the measure of a construct is consistent or dependable. There are
many ways of estimating reliability one of which is internal consistency reliability. It is a
measure of consistency between different items of the same construct. If a multiple-item construct
measure is administered to respondents, the extent to which respondents rate those items in a
similar manner is a reflection of internal consistency.

This reliability can be estimated in terms of Cronbach‟s alpha (Bhattacherjee, 2012). Zikmund
(2003) stated that the researcher should conduct the pre-testing to ensure the questionnaire‟s
reliability and to make sure that measures are free from error and therefore yield consistent
result. The reliability of the questions for each variables are obtained when Cronbach‟s coefficient
alpha is at least 0.7 and the internal consistency and reliability of the questions will be
considered higher, if the result is near to 1. In general, a reliability of a scale or item may fall
between 0 and 1. George and Mallery (2003) also stated that a reliability score of greater than
0.9 is excellent, greater than 0.8 is good, greater than 0.7 is acceptable, greater than 0.6
questionable, greater than 0.5 is poor and less than 0.5 is unacceptable.

28
In this study Cronbach‟s alpha model will used to measure the overall reliability of the data
obtained from a questionnaire. So the overall reliability of the questionnaire is 0.704, which is
at acceptable level according to a criterion set by George and Mallery (2003).

Table 3 and Table 3.3 below depict reliability of the survey questionnaire using Cronbach‟s alpha.

Table 1.3-Reliability of the Survey

Reliability Statistics
Cronbach's Alpha N of Items
.704 5
Source: SPSS result of survey data, 2020

Therefore, based on the above table results, it possible to say the measurement instrument of this
study is reliable.

3.8.2. Validity test

Validity refers to the extent to which a measure adequately represents the underlying
construct that it is supposed to measure (Bhattacherjee, 2012). Content validity will checked
through getting the questionnaire reviewed by experts. Moreover, the researcher conducted content
validity of the questionnaire by selecting 15 samples and done a pilot test to make some wording
adjustment and to avoid jargon words and languages.

3.9. Ethical consideration

Research ethics play a central role in ensuring that research findings in a study are credible and
reliable as pointed out by (Trochim, 2006). As such, the research upheld high degree of ethical
considerations in this study based on Sekaran (2003) suggestions. Ethical principles will be
adhered to consider policies regarding informed consent, deception, confidentiality, anonymity,
privacy and caring. In conducting this research, respect were given to the participants‟ privacy by
obtaining informed consent from all participants.

Every participant will be informed of the reason for the study (McMillan & Schumacher, 2010).
Participants will also be advised that they can withdraw voluntarily if they chose to, and are,
therefore free, to make informed decisions on their participation. Credibility, sincerity and

29
openness are essential in enlisting participants‟ cooperation and resolving any resistances.
Furthermore, ethical clearance from YOM Post Graduate College were applied for the study.

30
 WORK PLAN

Oct 29- Nov 18 Nov Dec.21- Jan 7- May.1- May.16-

nov 17 19-dec. jan.6 apr.20 15 20
20
WRITING
PROPOSAL

PROPOSAL
SUBMISSION

DATA
COLLECTION

DATA
ENTRY

DATA
ANALYSIS
AND DRAFT
THESIS
REPORT
WRITING

THESIS
SUBMISSION

DEFENSE Based
on
college
program

31
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38
ANNEX 1.A

YOM POST GRADUATE COLLEGE DEPARTMENT OF MASTERS OF

BUSINESS ADMINISTRATION (MBA)

Survey on competitive advantage through supply chain collaboration In case

of Bahir Dar textile share company

The questionnaire is to be filled by employees of Bahir Dar textile share company in Bahir Dar
Town.

QUESTIONNAIRE :- Dear respondents, the purpose of this questionnaire is to gather data on

the extent to how supply chain collaboration practice of the company affect competitiveness in the
case company. The study is purely for academic purpose and thus not affects you in any case. So,
your genuine, frank and timely response is vital for successfulness of the study. Therefore, I kindly
request you to respond to each items of the question very carefully

General Instructions:-This questionnaire contains four sections. Please respond to all of the
statements in all sections. Where answer options are available please tick (v) in the appropriate
box representing your response to each statement in all parts of the questionnaire.

Contact Address :- If you have any query, please do not hesitate to contact me and I am available
as per your convenience at Mobile: 0921282927

Thank you for scarifying your precious time in advance!

39
PART I: DEMOGRAPHIC INFORMATION

The questions below relate to personal data. Please TICK the most appropriate box.

1.what is your gender male female

2. Department?

Operation sales

purchasing quality control

3. Which is the highest level of education you have completed?

Primary or secondary Certificate

College diploma Bachelor degree
masters

4. Experience?

Less than 1 year 1-5 years

6-10 more than 10 years

40
PART 2: SUPPLY CHAIN COLLABORATION

Please tick the number that accurately reflects the extent of your supply chain‟s current level of
responsiveness.

SECTION 2A: Information sharing

Use a scale of 1-5 where 1= strongly disagree, 2= disagree, 3=not sure, 4=agree, and 5= strongly
agree

2A: Information sharing 1 2 3 4 5

2A1 We share information (financial, production, design etc.)

with our suppliers.

2A2 Exchange of information with our supplier

(formal or informally) is frequent.

2A3 Any event or change that might affect the other

party is immediately communicated to other

SECTION 2B: TRUST

2B: Trust 1 2 3 4 5

2B1 Our suppliers always conform to our required

technical and quality specifications.

2B2 Our suppliers always conform to our

delivery requirements.

2B3 In times of rush orders, we can rely on our suppliers.

2B4 In times of a tight budget, we can rely on our suppliers.

SECTION 2C: LONG TERM RELATION

2C: Long term relation 1 2 3 4 5

2C1 The suppliers see our relationship as a long term alliance

2C2 The relationship with this supplier is based on

41
a long term project.

2C3 Both parties (this firm and its suppliers) foster the long

term relationship based on cooperation

2C4 We expect our relationship with this supplier to

last a long time.

SECTION 2D: RISK ANDREWARD SHARING

2D: Risk and reward sharing 1 2 3 4 5

2D1 Our firm utilizes a strategy of sharing supply chain

risk with our supply chain partners

(e.g., buy back agreements, cost/revenue sharing, etc.)

2D2 There are clear risk and revenue sharing rules between

the members of the supply chain

2D3 We have formal mechanism (e.g., buy back agreement)

and informal mechanism (e.g., verbal commitment)

to share risk with supply chain partner

2D4 There are wildly acknowledged and accepted

risk/revenue sharing mechanism in our supply chain

42
PART 3: COMPETATIVE ADVANTAGE

SECTION 3A: COST

3A: COST 1 2 3 4 5

3A1 We offer competitive prices

3A2 We are able to offer prices as low or lower

than our competitors

SECTION 3B:

3B: Quality 1 2 3 4 5

3B1 We are able to compete based on quality

3B2 We offer products that are highly reliable

3B3 We offer products that are very durable

3B4 We offer high quality products to our customer

SECTION 3C: FLEXIBILITY

3C: Flexibility 1 2 3 4 5

3C1 We respond well Volume flexibility

3C2 We have Process flexibility

3C3 We have Product mix

3C4 We have Rapid capacity adjustments.

SECTION 3D: INNOVATION

3D: Innovation 1 2 3 4 5

3D1 We provide customized products.

3D2 We alter our product offerings to meet client needs.

3D3 We respond well to customer demand for new features

43
 የአማርኛ የምርምር ጥናት ማብራሪያና ስምምነት መግለጫ ቅፅ

የምርምር ንድፈ ሐሳቡ ርዕስ፡- የባህር ዳር ጨርቃ ጨርቅ ፋብሪካ አክሲወን ማህበር ከ አቅራቢወች እና ምርት አከፋፋዮቹ ጋር
በአንድነት በመስራት እንዴት ተወዳዳሪነቱን ማሳደግ ይችላል

የጥናት አድራጊዉ ስም፡- ኃይለማርያም ፈንቴ

የተቋሙ ስም፡- ዮም የድህረ ምረቃ ኮሌጅ

መግቢያ፡- ይህ ማብራሪያና ስምምነት ቅፅ የተዘጋጀውበ ዮም የድህረ ምረቃ ኮሌጅ የድህረ ምረቃ (ማስተርስ) ተማሪ አማካኝነት
ነዉ፡፡ የጥናቱ ዋና ዓላማ የባህር ዳር ጨርቃ ጨርቅ ፋብሪካ አክሲወን ማህበር ከ አቅራቢወች እና ምርት አከፋፋዮቹ ጋር በአንድነት
በመስራት እንዴት ተወዳዳሪነቱን ማሳደግ ይችላል የሚለዉን ሀሳብ ለመዳሰስ ነዉ ፤ በዚህ ጥናት ላይ ለመሳተፍ ከተስማሙ
ስምምነቱን በደንብ መረዳትና ለመሳተፍ ፍቃደኛ መሆንዎን በፊርማዎት ማረጋገጥ ይገባዎታል፡፡

ጥቅሞች፡- በዚህ ጥናት በመሳተፍዎ የተለየ ጥቅም አያገኙም፡፡ ነገርግን ከዚህ ጥናት የሚገኘዉ መረጃ ለመስሪያ ቤትዎ የወደፊት
እድገት የራሱ የሆነ አስተዋጽኦ ይኖረዋል፡፡

ሚስጢር ስለ መጠበቅ፡- ከዚህ ጥናት የሚገኝ መረጃ ሚስጥራዊነት የተጠበቀ ነዉ ፡፡ ጥናቱ ላይ መሳተፍ ግዴታ ሳይሆን በ
ፍቃደኝነት ላይ የተመሰረተ በመሆኑ ጥናቱ ላይ ላለ መሳተፍ ከፈለጉ በማንኛዉም ሰዓት ጥናቱን ጥሎ መዉጣት እንዲሁም
መመለስ የማይፈልጓቸዉን ጥያቄዎች አለመመለስ በጥናቱ ዙሪያ ማንኛውም ጥያቄ ካሉዎት ከዚህ በታች የተጠቀሱትን ሰዎች
በሚፈልጉት ጊዜ ማነጋገር ይችላሉ፡፡ ኃይለማርያም ፈንቴ ፡-0921282927

የስምምነት መግለጫ ቅፅ፡- ከላይ የተዘረዘሩትን ሀሳቦች በሙሉ የተገነዘብኩና የተረዳሁ ሲሆን በጥናቱ ላይ ለመሳተፍ ፍቃደኛ
መሆኔን በፊርማየ አረጋግጣለሁ፡፡

የተሳታፊ መለያ ቁጥር---------------------------------- ፊርማ እና ቀን -------------------------------------------

የጠያቂዉ ስም ---------------------------------------- ፊርማ እና ቀን----------------------------------------------

44
 ክፍል አንድ

መመሪያ መልሱን ከሳጥኑ ዉስጥ የኤክስ ምልክት በማረግ ይመልሱ

ግላዊ መረጃን በተመለከተ

1. ፆታ

a) ወንድ b) ሴት

2. የሥራ ክፍል

a) ምርት ክፍል b) ንብረት ክፍለ

c) ሽያጭ ክፍል d) ግዥ ክፍል

e) ጥራት ተቆጣጣሪ ክፍል

3. የትምህርት ደረጃ

a) ሠርተፊኬት b)ዲፕሎማ

c)የመጀመሪያ ዲግሪ d)ሁለተኛ ዲግሪ

e) ዶክትሬት ዲግሪ

4. የሥራ ልምድ

a) ከ አንድ አመት በታች b) 1-5 አመት

c) 6-10 አመት d) ከ 10 አመት በላይ

45
 ክፍል ሁለት

የባህር ዳር ጨርቃ ጨርቅ ፋብሪካ አክሲወን ማህበር ከአቅራቢወች እና ምርት አከፋፋዮቹ ጋር በአንድነት

አሰራሩን የተመለከቱ ጥያቄወች

መመሪያ መልሱን ከሳጥኑ ዉስጥ የኤክስ ምልክት በማረግ ይመልሱ

1=በጣም አልስማማም፤ 2 =አልስማማም፤ 3=መረጃው የለኝም፤4=እስማማለው፤

5=በጣም እስማማለው

2.1 መረጃ መለዋወጥ 1 2 3 4 5

A. ከአቅራቢወቻችን እና አከፋፋዮቻችን ጋር

(ገንዘብን፣ምርትን፣ዲዛይንን)በተመለከተ መረጃ እንለዋወጣለን

B. ከአቅራቢወቻችን እና አከፋፋዮቻችን ጋር ሁሌም

(ቀጥተኛ ና ቀጥተኛ) ባልሆነ መንግድ መረጃን እንለዋወጣለን

C. አጋሮቻችንን ሊጎዳ የሚችል ሁኔታ ሲፈጠር በፍጥነት መረጃ

እንለዋወጣለን

2.2 ተማምኖ መስራት 1 2 3 4 5

A. አቅራቢወቻችን የሚፈለገዉንና ጥራቱን የጠበቀ አቅርቦት ያቀርባሉ

B. አቅራቢወቻችን ለምርት የሚያስፈልጉ ቁሳቁሶች በሰአቱ ይደርሳሉ

C. በተለየ ሁኔታ አስቸኩይ ትእዛዝ ሲኖር በሠአቱ ያደርሱልናል

D. የገንዘብ እጥረት በሚኖርበት ሠአት እንተጋገዛለን

2.3 የረጅም ጊዜ አጋርነት 1 2 3 4 5

A.ከአቅራቢወቻችን እና አከፋፋዮቻችን ጋር ግንኙነታችንን

የረጅም ጊዜ ነው

B.ከአቅራቢወቻችንእና አከፋፋዮቻችንጋር ያለን ግንኙነት

ቀጣይነትን መሰረት ያደረገ ነዉ

C.ከአቅራቢወቻችን እና አከፋፋዮቻችን ጋር ቀጣይነት ያለዉ

ግንኙነት እንዲኖረን እንጥራለን በጋራም እንሠራለን

D.ግንኙነታችን ለወደፊትም ቀጣይነት እንደሚኖረዉ

እርግጠኛ ነን

46
2.4 ትርፍን እና ኪሳራ መጋራት 1 2 3 4 5

A. ከአጋሮቻችን ጋር በመሆን የሚከሰቱ ትርፍ እና ኪሳራን

እንጋራለን

B. ከአጋሮቻችን ጋር በመሆን የሚከሰቱ ትርፍ እና ኪሳራን

የምንጋራበት ህግ አለን

C. ድርጅቱ ቀጥተኛ ና ቀጥተኛ ያልሆኑ ኪሳራና ትርፍን የሚጋራበት

አሰራር አለዉ

D. የድርጅቱ ኪሳራና ትርፍን የመጋራት ልምድ በአጋሮቹ

የተመሰከረ ነዉ

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ክፍል ሦስት

የድርጅቱ ከሌሎች ድርጅቶች አንፃር ያለዉን ተወዳዳሪነት የተመለከቱ ጥያቄወች

3.1 በዋጋ 1 2 3 4 5

A. ምርቶቻችንን ከሌሎች ተወዳዳሪ ድርጅቶች ባነሠ ዋጋ

መሸጥ እንችላለን

B. አሁን ያለዉ የድርጅቱ ምርት ዋጋ ከሌሎች ጋር ተወዳዳሪ ነዉ

3.2 በጥራት 1 2 3 4 5

A. በጥራት ተወዳዳሪ ነን

B. በደንበኞች በጥራቱ ታማኝ የሆነ ምርት አለን

C. የምናመርተዉ ምርት በጥንካሬዉ አስተማማኝ ነዉ

D. ምርቶቻችንን ከሌሎች ተወዳዳሪ ድርጅቶች የተሻለ ጥራት አላቸዉ

3.3 የተለያየ አይነት እና መጠን ያለዉ ምርት ማምረት 1 2 3 4 5

A. በማንኛዉም ሠአት የተፈለገዉን መጠን እናመርታለን

B. በማንኛዉም ሠአት ምርት ማምረት እንችላለን

C. የተለያዩ አይነት ምርቶች አሉን

D. የተፈለገዉን አይነት አዲስ ምርት ማምርት እንችላለን

3.4 በፈጠራ 1 2 3 4 5

A. ተፈላጊ የሆኑ ምርቶች እናመርታለን

B. የኛ ምርቶች ደንበኞችን እንዲያስደስቱ በየጊዜዉ ማስተካከያ

እናረጋለን

C. ደንበኞች በሚፈልጉትን አይነት ምርት ማምረት እንችላለን

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