Exploring supply chain business bullying of small and medium-sized business suppliers by dominant buyers in the apparel retail sector in Gauteng

Abstract

Background: Issues relating to dominant behaviour and bullying practices in supply chains are mostly not reported. Some evidence exists of unfair business practices in the apparel retail sector, but the extent and nature of such practices in South Africa, as well as the business implications for small and medium-sized enterprises (SMEs), have not been researched. The reason could be the sensitive nature of these issues and possible adverse implications for the SMEs supplying apparel to the retailers in Gauteng.

Aim: The primary research objective is to determine the incidence and type of supply chain dominance experienced by SMEs in the retail apparel sector in Gauteng, as well as the business implications of such dominant behaviour and how SMEs cope with it.

Setting: The setting for this study was the business premises of SME apparel suppliers in Gauteng.

Methods: Qualitative semi-structured in-depth interviews were conducted with seven SMEs that were apparel suppliers to the large retailers in Gauteng, to obtain the supplier perspective.

Results: Six of the seven SMEs had experienced some form of bullying behaviour by large retailers in the apparel sector, such as late payments and long payment terms. For some of these SMEs, it had serious financial implications. Meaningful insight is provided into this supplier–buyer relationship between SMEs and large retailers in the apparel sector in Gauteng.

Conclusion: This is the first study in South Africa investigating supply chain dominance, in particular supply chain bullying of SME suppliers through unfair business practices by dominant buyers in the apparel sector.