Regulative Intervention on the Relationship between Quality Management and Operational Performance of Third Party Port-Centric Logistics Firms in Kenya

Abstract

This research paper explores the effect of regulated environment under which third-party port-centric logistics (3PL) firms in Kenya operate by looking at the relationship between quality management and operational performance. The study tested the conceptual model of the relationship between quality management and operational performance variables. The objective of the study was to determine the effect of the regulative intervention on the relationship between customer orientation and operational performance of third party port-centric logistics firms in Kenya. Port-centric logistics services providers are highly regulated firms and therefore critical to find out the effect of this regulated context on the operational performance of these firms. The relationship between quality and operational performance has been tested and documented in numerous environments in varied studies. A survey design based on disproportionate-stratified sampling approach consisting of 164 firms (18% of the population) guided the methodology of this study. The sampled firms (164) were served with questionnaires and a response rate of 75.6% (124 firms) was achieved. Data analysis was carried out using moderated multiple regression (MMR) analysis where relationship between the quality and other variables and the dependent variable was computed. Test of internal consistency, validity test, reliability, and normality test, were conducted, all indicating appropriateness of data. The strength of the regression model was 53.6% (adjusted R2) which was considered good enough, appreciating the fact that operational performance is also affected by myriad factors outside the model. The null hypothesis (H0) was tested, and the results indicated that there was statistically significant evidence that regulative context affects the relationship between quality and operational performance. The results indicate that R = 0.709, R² = 0.502 and [F (2, 120) = 60.582, p = 0.000] with the value of R² showing that 60.582% of the variance in the third-party port-centric logistics firms’ performance can be accounted for by quality management scores and regulation and statistically significant. The results detected an R² change of 0.022, [F (1, 119) = 0.022, p = 0.022], indicating presence of moderation effect, in such levels that are statistically significant (p < 0.05). By inclusion of the moderator, regulation gained 2.2% variance in the operational performance generating a conclusion that regulation significantly moderates the relationship between quality management and operational performance. The study was a success and the goal was achieved with the findings critically providing baseline information and knowledge that will play a critical role in the research agenda in the area of lean and operational performance, particularly in service management. The study also provides fundamental information, knowledge, foundational anecdote and a platform from which research agenda and policy discussions can be referenced. The study recommends policy formulation that will support measures to boost operations and quality amongst 3PL firms towards continuous improvement and growth. The findings will essence inform and booster 3PL firms that are efficient, and effective emanating from superior operational performance. This will also benefit customers (importers and exporters), and the national economies within and without the east and central Africa region. The study recommends that 3PL firms, although sometimes affected negatively by regulatory frameworks, take it upon themselves to device smart interventions that will lead to efficient operations in order to compete and emerge victorious in operational excellence and outwit in the competitive battle.