DRIVERS OF OPERATIONAL PERFORMANCE AND CUSTOMER RETENTION IN THE CHEMICALS INDUSTRY

Abstract

South Africa has a vibrant chemical industry that contributes significantly to the socio-economic well-being of the country. However, due to ease of entry, there is a proliferation of businesses operating in this industry, which has increased the level of competition within the industry. Most businesses operating in this industry, therefore, face the challenge of retaining their customers in the wake of the increased competition. This study aimed to investigate the drivers of operational performance and customer retention in the chemicals industry in South Africa. To achieve this aim, the study tested the relationships between supply chain relationship quality, workplace safety and health, operational performance and customer retention within firms operating in the chemicals industry in Gauteng Province. Using a quantitative approach, a survey questionnaire was distributed to a convenient sample of 184 professional employees drawn from selected businesses in the chemicals industry. Hypotheses were then tested through the structural equation modelling approach using SMART PLS 3 statistical software. The results of the study show that supply chain relationship quality positively influenced the adherence to safety regulations. Both relationship quality and safety regulations positively influenced operational performance and customer relationships. However, there was no relationship between operational performance and customer retention. Practitioners in the chemicals industry can apply the results of the study in improving the retention of customers by implementing strategies for improving the adherence to safety and health standards and the quality of relationships with all stakeholders.

Keywords

• Chemicals industry,relationship quality,safety regulations,operational performance,customer relationships

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