Abstract:
The study investigated how small and medium enterprises (SMEs) create value in local supply chains. Specifically, the study focused on two initiators of value creation: entrepreneurial competences and supply chain trust. The authors analyse a cross-sectional survey of 294 SMEs in Uganda operating in the construction, furniture and fitting, food processing and agricultural sectors to test a number of hypotheses, using factor analysis and structural equation modelling. Results show that building value-driven supply chains requires SME owner-managers to build an optimal level of trust. Although trust is identified as a key factor in facilitating trade within local communities, different entrepreneurs’ perspectives alter how SME-owner managers assess trusted partners, determining different strategies and behaviours in building trust in customer, as opposed to suppliers’ relationships. In addition, findings show how operational cost is not a key value driver, indicating why SME-owners managers should instead focus on building trust.
