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 coffeegrowers (suppliers) and the licensed buying companies (buyers). Thestudy reports on the factor (Transaction-Specific Supplier developmentefforts undertaken by the buyer in the supplier) that influences onsuppliers ' perceived buyer opportunism. Literature review onTransaction Cost Theory led to formulation of the research modeland hypothesis in order to test the proposed relationship betweenbuyer opportunism and transaction-specific supplier development.Data from a survey of seventy three (73) small holder coffee farmersof Tanzania were used. Ordinary Least Square method through SPSSwas used to estimate results of the model and assumptions underlyingregression analysis were observed.Empirical findings revealed that transaction-specific supplierdevelopment has a significant negative relationship with buyeropportunism. This re-enforces that buyer opportunism should beeradicated in the supply chain of coffee since it reduces both trustand supplier satisfaction. In order for management to overcome buyeropportunism, they need to incorporate transaction-specific supplierdevelopment in coffee buyer-seller relationship.Keywords: Buyer, Supplier, Specific Supplier Development andOpportunism.