Inter-firm Relationships and Performance Factors in the Australian Beef Supply Chain: Implications for the Stakeholders

Recent study by Meat & Livestock Australia revealed that cost competitiveness and market development issues in supply chain are the major factors for a long term decline of the Australian Beef industry. This study, based on the explanation of transaction cost theory argues that competitive performance of an industry depends on improving cost efficiency across the whole of supply chain, the underlying value chain, and the relationship among the stakeholders in the industry. With a main objective to investigate the underlying factors of developing competent inter-firm relationship that influence the supply chain performance and competitiveness, this study presents details of a survey carried out and tests the hypothesis that inter-organizational relationships in supply chain and its antecedents have impact on the performance of Australian beef industry and thus have impact on the competitiveness of the industry. Data were collected through a telephone survey of 315 firms in the beef industry from the states of Western Australia and Queensland. The sample respondents were categorized as input suppliers, beef-cattle producers, processors, retailers/exporters, and wholesalers. The data were analysed using the partial least square based structural equation modelling. PLS analysis reveals that ‘Transaction Climate’ is the strongest determinants of developing a competent relationship, while negotiation power, presence of industry competitors, and the degree of vertical coordination significantly influence the relationship strength. Findings also demonstrate that relationship strength is the most prevalent source of performance and competitiveness, while SC performance highly positively influences the Competitiveness of beef industry. Thus this study identifies significant antecedents and consequences of Supply Chain Performance in Australian beef industry, which are strategic and extremely important information for beef producers, processors, retailers, and other stakeholders for appropriate planning and benchmarking.