Trust, Commitment, Satisfaction, Strategy Alignment, Logistics Outsourcing Relationships Quality and Logistics Performance: A Case of Selected Manufacturing and Distribution Firms in Uganda

Abstract

This study sought to examine elements of trust, commitment, satisfaction and strategy alignment as antecedents of logistics outsourcing relationship quality (LORQ), and assessed their influence on firm logistics performance. The study adopted a cross-sectional and exploratory study designs. Descriptive, analytical, quantitative and qualitative designs were also used. Findings showed that there is a strong positive relationship between trust, commitment, satisfaction and strategy alignment, and logistics outsourcing relationship quality; and between logistics outsourcing relationship quality and logistics performance. Findings also show that trust, commitment, satisfaction and strategy alignment when combined explain up to 70% variance in LORQ with trust being the most important predictor explaining 42% variance in LORQ. Meanwhile results obtained from a forward step- wise regression show that LORQ is a significant predictor and explains up to 50.9 percent variance in logistics performance. A full mediation effect is confirmed on LORQ and trust and strategy alignment, while a partial mediation exists between LORQ and commitment and customer satisfaction. The studied independent variables can predict up to 67.7

percent (and with the inclusion of LORQ) they predict up to 68.1 percent) variance in logistics performance implying that only 31.9 percent variance in logistics performance may be explained by other factors. In our analysis we observe that logistics outsourcing
relationships largely involve two-way information exchange, coordination and trust. Elements of trust, commitment, and satisfaction may be viewed as both antecedents and effects of relationship quality. The logistics outsourcing strategy should thus be evaluated from a duo-perspective. This study explore logistics outsourcing as a strategy for enhancing logistics performance in manufacturing and distribution firms within the context of a developing country. The study provides an empirical investigation on the relationship between outsourcing relationship quality and logistics performance, an aspect that has not been largely explored before.