Elements of Collaborative Relationships and Supply Chain Performance Of SMEs in Bushenyi District

Abstract

The research investigated how incentive alignment, together with information sharing and joint decision-making, impacts the supply chain performance of small and medium enterprises in Bushenyi District, Uganda. The study employed Relational Exchange Theory to analyze the supply chain performance of SMEs through a cross-sectional quantitative design, which collected data from 327 owners/managers using structured questionnaires. The results from Pearson correlation and multiple regression analysis showed that information sharing and joint decision-making positively affected supply chain performance but incentive alignment failed to produce a significant impact. The research results showed information sharing produced the most significant impact (β = 0.559, p < 0.01) followed by joint decision-making (β = 0.073, p < 0.05) yet incentive alignment did not produce a significant effect (β = –0.068, p > 0.05). The model explained 29.5% of the variance in supply chain performance (Adjusted R² = 0.295). The research indicates that better communication and collaborative planning serve as essential factors for achieving supply chain efficiency among rural SMEs. The study reveals that informal SME networks face specific challenges when attempting to establish formal reward systems because incentive alignment shows minimal impact. The research demonstrates that Bushenyi requires improved information systems together with enhanced participatory planning and digital infrastructure development to enhance supply chain outcomes. The recommendations include supporting digital communication platforms and providing institutional backing for collaborative decision-making processes and educating stakeholders about incentive-based partnership models.