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The impact of inventory management practice on firms’ competitiveness and organizational performance: Empirical evidence from micro and small enterprises in Ethiopia

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  • Daniel Atnafu
  • Assefa Balda

Abstract

This study aimed to empirically examine the impact of inventory management practice on firms’ competitiveness and organizational performance. Data for the study were collected from 188 micro and small enterprises (MSEs) operating in the manufacturing sub-sector and the relationships and hypothesis proposed in the conceptual framework were tested using structural equation modeling (SEM). The results indicate that higher levels of inventory management practice can lead to an enhanced competitive advantage and improved organizational performance. Also, competitive advantage can have a direct, positive impact on organizational performance. Therefore, it is recommended that policy makers, universities, NGOs and any concerned party who are engaged in supporting of MSEs need to work on providing the necessary training and resource to promote the inventory management practice of MSEs which will result in increasing their competitiveness and organizational performance. That would enhance their contribution to the economic development of the country. Note that, the conclusion obtained from this study may not be used to generalize to large and medium scale as well as overall sectors since its focus is only from the MSEs’ manufacturing sub-sector points of view.

Suggested Citation

  • Daniel Atnafu & Assefa Balda, 2018. "The impact of inventory management practice on firms’ competitiveness and organizational performance: Empirical evidence from micro and small enterprises in Ethiopia," Cogent Business & Management, Taylor & Francis Journals, vol. 5(1), pages 1503219-150, January.
    • Handle: RePEc:taf:oabmxx:v:5:y:2018:i:1:p:1503219
    DOI: 10.1080/23311975.2018.1503219
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    1. repec:zib:zbjtwe:v:1:y:2023:i:2:p:83-86 is not listed on IDEAS
    2. Markina, Iryna & Somych, Nikolai & Taran-Lala, Olena & Varaksina, Elena & Potapiuk, Iryna & Vovk, Mykola, 2022. "Managerial Aspects of Forming Enterprises’ Competitive Advantages: The Case of Agri-food Sector," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 13(01), January.
    3. Fabiane Tubino Garcia & Carla Schwengber ten Caten & Elaine Aparecida Regiani de Campos & Aline Marian Callegaro & Diego Augusto de Jesus Pacheco, 2022. "Mortality Risk Factors in Micro and Small Businesses: Systematic Literature Review and Research Agenda," Sustainability, MDPI, vol. 14(5), pages 1-37, February.
    4. Varun Tripathi & Deepshi Garg & Gianpaolo Di Bona & Alessandro Silvestri, 2025. "Leveraging the Power of Human Resource Management Practices for Workforce Empowerment in SMEs on the Shop Floor: A Study on Exploring and Resolving Issues in Operations Management," Sustainability, MDPI, vol. 17(15), pages 1-35, July.
    5. Pedro Teixeira & Arnaldo Coelho & Pedro Fontoura & José Carlos Sá & Francisco J. G. Silva & Gilberto Santos & Luis P. Ferreira, 2022. "Combining lean and green practices to achieve a superior performance: The contribution for a sustainable development and competitiveness—An empirical study on the Portuguese context," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(4), pages 887-903, July.
    6. Muhalia Eric Jepherson & Dr. Patrick Karanja Ngugi & Dr. Makori Moronge, 2021. "Logistics Management Systems And Performance Of Fast-Moving Consumer Goods Manufacturers In Nairobi, Kenya," International Journal of Supply Chain Management, IPRJB, vol. 6(1), pages 29-63.
    7. Mitchell Dodzi Morvey & Lawrence Mpele Lekhanya & Eric Kofi Boadi, 2024. "Supply chain management (SCM) framework for small and medium manufacturing enterprises (SMEs) in Ghana," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 6(2), pages 01-12, April.
    8. Mária Stopková & Ondrej Stopka & Vladimír Ľupták, 2019. "Inventory Model Design by Implementing New Parameters into the Deterministic Model Objective Function to Streamline Effectiveness Indicators of the Inventory Management," Sustainability, MDPI, vol. 11(15), pages 1-15, August.
    9. He, Xin & Xu, Xinwei & Shen, Yu, 2023. "How climate change affects enterprise inventory management —— From the perspective of regional traffic," Journal of Business Research, Elsevier, vol. 162(C).

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