Supplier Communication and Performance of Micro, Small and Medium Enterprises in Nairobi City County,Kenya

Abstract

The study investigates the relationship between supplier communication and the performance of Micro, Small, and Medium Enterprises (MSMEs) in Nairobi City County, Kenya. Supplier communication was found to play a pivotal role in the operational efficiency and overall performance of MSMEs, especially in dynamic markets. Despite adopting Supplier Relationship Management (SRM) practices, many MSMEs continued to experience challenges such as poor record management, unclear expectations, and a lack of timely feedback. These communication issues contributed to delays, misunderstandings, and increased costs, which negatively impacted business growth. The study applied the Communication Accommodation Theory to explain how MSMEs adapted their communication styles in both high-context and low-context cultures. Using a cross-sectional research design, the study collected data from 373 MSMEs under the Access to Government Procurement Opportunities (AGPO) program. The results revealed a significant positive relationship between supplier communication and performance, with regression analysis showing that supplier communication explained 58.7% of the variance in MSME performance. The findings aligned with previous studies, emphasizing the importance of communication for successful supplier collaboration and supply chain management. The study concluded that frequent, transparent communication with suppliers improved product and service delivery and operational efficiency. Recommendations included investing in technologies that enhance communication and developing policies to support ongoing supplier relationship management. Further research could explore the impact of digital technologies on supplier communication and how communication with international suppliers influences MSME performance.