Can international buyer-supplier relational attributes influence the intention to source from local suppliers? A case study of International Oil Companies in Tanzania

This study explores whether International Oil Companies (IOC) intending tosource their non-consultancy services from local providers are affected by theirrespective strategic relationships with international service providers.International Oil Companies (IOC) exploring oil and gas in Tanzania were usedas a case study to represent the group of buyers. This study adopted IndustrialMarketing and Purchasing perspectives (IMP) on buyer-supplier relationships,where the structural and functional attributes of buyer-supplier relationshipswere examined. Structural Attributes include continuity, complexity,interdependence, and trust, while Process Attributes include adaptation, conflict,cooperation, socialisation, and formalisation. Buyers’ intention to source fromlocal suppliers was measured by four dimensions: presence of sourcing policyfrom local suppliers, presence of activities for creating awareness among localsuppliers about supply opportunities, presence of relaxed evaluation criteria, andpayment scheme that favours local suppliers and establishes a central unit forcoordinating all activities intended to facilitate sourcing from local suppliers. Asurvey design was used, whereby primary data were collected from 189employees working at middle- and top-level positions in oil and gas companies.Data analysis involved examining descriptive statistics for respondents’attributes and inferential statistical analysis, where relationships between thestudy variables were examined. The findings show that, given the new marketconstraints and without any forceful inducement, OICs will consider sourcingfrom local suppliers despite the ongoing strategic relationship with internationalsuppliers. Therefore, host countries should focus on developing the competenceof local suppliers to meet IOCs’ expectations.