QUALITY MANAGEMENT PRACTICE AND PERFORMANCE OF COFFEE PROCESSING AND EXPORTING FIRMS IN ETHIOPIA

Abstract

The coffee industry contributes to the economies of both exporting and importing countries. A firm’s performance is a function of how well managers use quality management practices to improve the quality of products and services. In today’s global environment, organizations are constantly looking for ways to expand and improve their businesses in terms of quality to enhance performance. Quality management practices have been used by export coffee processing and export firms in Ethiopia to improve performance to compete with the world coffee market. However, international customers are still complaining that the quality of the coffee. This study aims to examine the quality management practice and performance of coffee processing and exporting firms in Ethiopia in terms of to assess the type of coffee quality standard adopted by coffee exporting and processing firms, to assess the type & degree of utilization of the quality tools, techniques & methods utilized by coffee exporting and processing firms, to study the level of implementation of the quality management practice adopted by coffee exporters, to assess the moderating effect of the operating environment on the relationship between quality management practices and performance, to establish the mediating effect of organizational capacity on the relationship between quality management practices and performance and to find out the possible factors that influence the implementation of quality improvement. The study used descriptive and explanatory as research design and stratified sampling technique to collect primary data as an approach to primary data that was collected using self-administered questionnaires. The validity of the instruments ensured through face, content validity and reliability tested using Cronbach’s Alpha with a coefficient of 0.7, which was considered acceptable. Data analyzed using descriptive and inferential statistics. Descriptive statistics used to summarize data while inferential statistics, specifically Multiple Linear Regressions, used to test the hypothesis. The results presented using tables and findings indicate that continuous improvement had a positive and significant effect on the performance of export coffee processing and exporting firms. Customer and market focus found to be significant in explaining the variation of performance and top management commitment found to have a significant effect on the performance of export coffee processing and exporting firms. xv Organizational capability had a partial mediating effect on the relationship between quality management practices and performance. The operating environment had a moderating effect on the relationship between quality management practices and performance. The study recommends that the management should be committed to quality by providing strategic direction concerning quality management practices, which should be aligned to the firms’ objectives. Policymakers should create a quality framework geared towards improving performance and ensure it is adhered to by all stakeholders in the export coffee processing and exporting firms in Ethiopia. Finally, the study recommends similar research be done in the coffee value chain in Ethiopia coffee industries.