Abstract

Establishing relationships with suppliers has been found critically important for manufacturing organizations in meeting the challenges faced by them for maintaining sustainability in global supply chains. At the same time, managing these relationships so formed, by way of governance strategies is considered equally important in ensuring positive outcomes through the relationships established. This assertion of acquiring positive outcomes through managed relationships, suggested by the transaction cost theory was tested using data from the apparel manufacturing and exporting industry of Sri Lanka in relation to the sustainable performance of manufacturing firms. The results revealed that supplier governance negatively influences the relationship between sustainable practices and sustainable performance of manufacturing firms in the apparel manufacturing and exporting industry of Sri Lanka indicating that governance strategies do not always bring positive outcomes. These findings contribute to the knowledge by providing evidence as to the viability of governance mechanisms in achieving positive outcomes through buyer-supplier relationships in the context of developing countries.

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