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This study is about how does collaboration activities of large company's Supplier Relationship(SR) effect on manufacturing capability and performance of a SMEs. In this research, there are many ways to analyze data. The methods used in the study are hypothesis testing and empirical testing based on SPSS 21.0 and AMOS21.0, factorial analysis for validity and reliability of questionnaire item, construct validity and variance extracted as a research model, and subcontract-tiers as a moderating variable. As a result, the effect of the collaboration activities of large business did not have the significant effect on supplier's manufacturing capability. It showed different result by subcontract-tiers In first-tier cooperative, collaboration activities of large business had significant effect on manufacturing capability, but it did not have the significant effect on performance. In second/third-tier cooperative, manufacturing capability and performance are significantly affected by manufacturing practices. In conclusion, this study will suggest the direction how to achieve an accompanied growth between large enterprises and SMEs.

The Effect of Collaboration of Large Enterprises in Supplier Relationship on Manufacturing Capability and Performance of SMEs