Kaizen and Productivity: The Mediating Effect of the Customer-supplier Relationship Using Smart-PLS

Abstract

As the global market has shifted rapidly in recent years, the debate over whether kaizen is a prerequisite to organizational effectiveness for continuously identifying new opportunities and gaining competitive advantages has increased. In addition, the effect of the customer-supplier relationship on organizational culture and productivity has gained substantial attention in recent studies, largely due to the expanding gap and misunderstanding of the benefits of continuous improvement (kaizen). The current study examines the mediating effect of customer-supplier relationships on organizational culture, continuous improvement, and productivity. Target respondents consisted of 240 Ethiopian manufacturing companies located in multiple industrial parks and used to collect the required data. Partial least squares-based structural equation modeling (PLS-SEM) was used to examine the mediating effect of customer-supplier relationship on kaizen and productivity. The outcome suggested that the customer-supplier relationship mediates kaizen and productivity. It also indicated that, in order to maintain organizational productivity, firms must differentiate themselves through cultivation of organizational culture and customer-supplier relationships.

Keywords

• Continuous improvement
• customer-supplier relationship
• organizational culture
• PLS-SEM

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