Managing Small to Medium Enterprises Suppliers in Developing Countries- A Case of SMEs in Harare, Zimbabwe

Abstract

The purpose of this paper is to provide an overview of the challenges which are being experienced between the buying organizations and the Small to Medium Enterprises Suppliers (SMEs) in the Supply Chain in Zimbabwe. Objectives of the study are to assess the role of SMEs in the economic development, to analyze challenges faced when dealing with SMEs in procurement, to identify factors that hinder SMEs from being reliable partners in supply chain, and to come up with strategies for ensuring that SMEs become reliable partners in supply chain. This study adopted a qualitative research design because it provided flexibility and afforded the researcher the opportunity to conduct an in-depth research. The population for this study was made up of 595 SMEs suppliers in the Harare central business district (CBD) and 20 officials from the Small Enterprises Development Corporation (SEDCO). This study used stratified random sampling technique when selecting participants from SMEs suppliers while SEDCO officials were selected using simple random sampling. The study showed that SMEs were important to the economic development of Zimbabwe and there was a need for companies to support them through procurement. Nevertheless, it was held that SMEs suppliers were very unreliable, provides poor quality materials and performed below standard. The study revealed that ignorance about the importance of accounting information, lack of capacity, and lack of separation between ownership and management of SMEs hindered some organizations from being accountable. It is recommended that adoption of professional procurement ethics is important, need for supplier evaluation, effective communication, and the need for SMEs to formalize their business operations and maintain accounting records. There is a need for separation of ownership and control of business affairs. This would ensure more accountability.