Factors Influencing Coffee Growers’ Perception on Coffee Buyers’ Opportunism: A Case of Coffee Buyer – Supplier Relationships in Tanzania

Abstract

This study examined the relationship between smallholder coffee
growers (suppliers) and the licensed buying companies (buyers). The
study reports on the factor (Transaction-Specific Supplier development
efforts undertaken by the buyer in the supplier) that influences on
suppliers’ perceived buyer opportunism. Literature review on
Transaction Cost Theory led to formulation of the research model
and hypothesis in order to test the proposed relationship between
buyer opportunism and transaction-specific supplier development.
Data from a survey of seventy three (73) small holder coffee farmers
of Tanzania were used. Ordinary Least Square method through SPSS
was used to estimate results of the model and assumptions underlying
regression analysis were observed.
Empirical findings revealed that transaction-specific supplier
development has a significant negative relationship with buyer
opportunism. This re-enforces that buyer opportunism should be
eradicated in the supply chain of coffee since it reduces both trust
and supplier satisfaction. In order for management to overcome buyer
opportunism, they need to incorporate transaction-specific supplier
development in coffee buyer-seller relationship.

Keywords: Buyer, Supplier, Specific Supplier Development and
Opportunism.