Abstract
Managing financially distressed suppliers in supplier development programmes : a case study in the South African retail industry
Highlights
AND PROBLEM STATEMENTIt is imperative for buying firms to be cognisant of the well-being and status of their suppliers to circumvent risks that may tarnish the firm’s reputation, operations, revenue, and eventually overall competitive advantage (Bingaman, Becher, Held, McPherson, Sriram & Iyer 2012:1; Platt & Platt 2013c:232; Yawar & Seuring 2018:227)
The Information Processing Theory (IPT) define firms as information processing systems that need to improve their capabilities in gathering, processing and acting on information from the environment to mitigate uncertainty (Daft & Weick 1984:285; Fan, Cheng, Li & Sun 2017:64; Tushman & Nadler 1978:614). The purpose of this single case study was to determine how a large South African retailer manages financially distressed suppliers that participate in supplier development programmes in a developing country context
3.1 Research design and sampling A single case study design was used to fully understand how the specific general retailer manages financially distressed suppliers that participate in supplier development programmes
Summary
AND PROBLEM STATEMENTIt is imperative for buying firms to be cognisant of the well-being and status of their suppliers to circumvent risks that may tarnish the firm’s reputation, operations, revenue, and eventually overall competitive advantage (Bingaman, Becher, Held, McPherson, Sriram & Iyer 2012:1; Platt & Platt 2013c:232; Yawar & Seuring 2018:227). Existing research on financial distress is mainly focused on the prediction of financial distress and the recognition of early warning signals (Finley 2009:2,4; Gualandris & Kalchschmidt 2014:256) This is imperative since financial distress precedes bankruptcy and still allow firms some time to take corrective action to prevent further problems and corporate decline, like bankruptcy (Cheng, Hoang, Limanto & Wu 2014:315; Platt & Platt 2008b:130). Retailers are heavily reliant on their suppliers to provide consumers with the needed goods (Juneja 2018:Internet; Money Matters 2018:Internet) When these suppliers become financially distressed, the product supply to retailers are affected, and retailers lose their ability to provide customers with products when and where they are needed. This results in a loss of customers (Mägerle 2014:2)
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