Relationship between Reverse Logistics Practices and Organizational Performance

Reverse logistics is an important process that is often misunderstood. Many organizations do not understand what processes and procedures to follow and how to manage reverse logistics efficiently. Though studies have shown the positive impacts of adoption of various reverse logistics practices, the researcher found no research works that specifically shown how adoption of reverse logistics practices could impact on organizational performance in the case of firms in Ethiopian. The objectives of this study were to determine the extent to which EABSC has adopted reverse logistics practices and investigate the relationship between reverse logistics practices and organizational performance. A descriptive cross-sectional survey study was used to provide empirical data to help address the existing research gap. The study sample consisted of 111 employees selected through stratified random sampling. The respondents answered questionnaire items adopted from previous researchers. The inferential relationship was imputed using Pearson correlation analysis. The findings showed that EABSC has adopted reverse logistic practices to appreciable levels. Specifically, it was seen that reuse and recycle reverse logistics practice were found strongly correlated with organizational performance and both reuse & recycle have strong positive correlation with financial and market performance. It is therefore recommended that management of EABSC should look at reverse logistics practice as a strategic method that can be used to achieve organizational performance. Similarly, EABSC should consider outsourcing their reverse logistics function, if they lack the necessary expertise or knowledge.