- Apply for Authority
- P-ISSN1738-3110
- E-ISSN2093-7717
- SCOPUS
ISSN : 1738-3110
Impacts of Buyer-Supplier Cooperation on Trust and Performance: Moderating Role of Governance Mechanism
Hui, Liang
Lee, Jung-Seung
- Downloaded
- Viewed
Abstract
Purpose - This paper aims to examine the impact of buyer-supplier cooperation on suppliers' trust on buyers and the moderating role of buyers' governance mechanism between the sharing activities and trust. Research design, data, and methodology - An integrated research model is designed to materialize the research hypotheses. First, the impact of buyer-supplier cooperation is empirically analyzed by looking into how the sharing activities, in the field of information, resource, and knowledge, of buyer with supplier will affect the trust of supplier on buyer. Second, the moderating effect of contract-based governance mechanism of buyer is empirically analyzed. Third, the influence of trust on innovation performance of suppler is empirically analyzed. Results - Our findings provide supporting evidence for some of our hypotheses. First, all of the sharing activities are significantly influential, but in different degree, to trust of supplier. Second, contract-based governance mechanism of buyer have a moderating effect on the relationship between sharing activities and trust, positively in resource-sharing activities, negatively in information-sharing activities, not significant in knowledge-sharing activities. Third, supplier's trust on buyer positively affects supplier's own innovation performance. Conclusions - The strategies applied in supply chain management have become important as the competition among firms has shifted from competition between individual firms to competition between supply chains. A customer's sharing activities with its supplier may contribute to an increase in innovation performance. The supplier's information-sharing activity with its customer could affect its information-sharing activities with its main supplier. Cooperative activity with a partner in the supply chain is cultivated and amassed into relationship knowledge, and this study shows that the cooperative relational knowledge related to information-sharing activities enables firms to participate in sharing activities with their main suppliers. Increasing evidence shows that sharing various activities between buyer and supplier improves trust and performance outcomes, and enables firms to maintain competitive advantage. From the perspective of knowledge theory, external knowledge is becoming more important in firms' innovation activities, because innovative knowledge is acquired primarily through interaction with another organization. In addition, relationship learning could be an important tool in absorbing the supplier's core technology, information, expertise, and core competencies, increasing relational value.
- keywords
- Buyer-Supplier Cooperation, Sharing Activities, Trust, Governance, Innovation
Reference
Akintoye, A., McIntosh, G., & Fitzgerald, E. (2000). A survey of supply chain collaboration and management in the UK construction industry. European Journal of Purchasing & Supply Management, 6(3), 159-168.
Amit, R., & Schoemaker, P. J. (1993). Strategic assets and organizational rent. Strategic management journal, 14(1), 33-46.
Anderson, J. C., & Narus, J. A. (1990). A model of distributor firm and manufacturer firm working partnerships. Journal of Marketing, 54(1), 42-58.
Barringer, B. R., & Harrison, J. S. (2000). Walking a tightrope: Creating value through interorganizational relationships. Journal of management, 26(3), 367-403.
Bates, R., & Khasawneh, S. (2005). Organizational learning culture, learning transfer climate and perceived innovation in Jordanian organizations. International Journal of Training and Development, 9(2), 96-109.
Benton, W. C., & Maloni, M. (2005). The influence of power driven buyer/seller relationships on supply chain satisfaction. Journal of Operations Management, 23(1), 1-22.
Bernheim, B. D., & Whinston, M. D. (1998). Incomplete contracts and strategic ambiguity. American Economic Review, 88(4), 902-932.
Boddy, D., Cahill, C., Charles, M., Fraser-Kraus, H., & Macbeth, D. (1998). Success and failure in implementing supply chain partnering: an empirical study. European Journal of Purchasing & Supply Management, 4(2), 143-151.
Cannon, J. P., & Perreault, Jr, W. D. (1999). Buyer-seller relationships in business markets. Journal of marketing research, 36(4), 439-460.
Cannon, J. P., Achrol, R. S., & Gundlach, G. T. (2000). Contracts, norms, and plural form governance. Journal of the Academy of Marketing Science, 28(2), 180-194.
Carr, A. S., & Pearson, J. N. (1999). Strategically managed buyer–supplier relationships and performance outcomes. Journal of operations management, 17(5), 497-519.
Cavusgil, S. T., Deligonul, S., & Zhang, C. (2004). Curbing foreign distributor opportunism: An examination of trust, contracts, and the legal environment in international channel relationships. Journal of International Marketing, 12(2), 7-27.
Cohen, W. M., Nelson, R. R. & Walsh, J. P. (2002). Links and impacts: the influence of public research on industrial R&D. Management Science, 48(1), 1-23.
Cummings, L. L., & Bromiley, P. (1996). Chapter 15: The organizational trust inventory (OTI): Development and Validation. Trust in organizations: Frontiers of theory and research, 302-330.
Dyer, J. H. (1996). Specialized supplier networks as a source of competitive advantage: Evidence from the auto industry. Strategic management journal, 17(4), 271-291.
Ellram, L. M., & Hendrick, T. E. (1995). Partnering characteristics: a dyadic perspective. Journal of Business Logistics, 16(1), 41.
Emerson, R. M. (1976). Social exchange theory. Annual review of sociology, 2(1), 335-362.
Evans, P. B., & Wurster, T. S. (1997). Strategy and the new economics of information. Harvard business review, 75(5), 71-82.
Flynn, F. J. (2005). Identity orientations and forms of social exchange in organizations. Academy of Management Review, 30(4), 737-750.
Folinas, D., Manthou, V., Sigala, M., & Vlachopoulou, M. (2004). E-volution of a supply chain: cases and best practices. Internet research, 14(4), 274-283.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50.
Gaski, J. F. (1986). Interrelations among a channel entity's power sources: Impact of the exercise of reward and coercion on expert, referent, and legitimate power sources. Journal of Marketing Research, 23(1), 62-77.
Granovetter, M. (1985). Economic action and social structure:The problem of embeddedness. American journal of sociology, 91(3), 481-510.
Gulati, R. (1999). Network location and learning: The influence of network resources and firm capabilities on alliance formation. Strategic management journal, 20(5), 397-420.
Gundlach, G. T., Achrol, R. S., & Mentzer, J. T. (1995). The structure of commitment in exchange. The Journal of Marketing, 59(1), 78-92.
Hair, J. F., Anderson, R. E., Tatham, R. L. and William, C. (1998). Multivariate data analysis. (5th ed.).. Prentice-Hall International.
Handfield, R. B., & Bechtel, C. (2002). The role of trust and relationship structure in improving supply chain responsiveness. Industrial marketing management, 31(4), 367-382.
Harland, C., Zheng, J., Johnsen, T., & Lamming, R. (2004). A conceptual model for researching the creation and operation of supply networks. British Journal of Management, 15(1), 1-21.
Huang, G. Q., Lau, J. S., & Mak, K. L. (2003). The impacts of sharing production information on supply chain dynamics: a review of the literature. International Journal of Production Research, 41(7), 1483-1517.
Huber, G. P. (1991). Organizational learning: the contributing processes and the literatures. Organization Science, 2(1), 88-115.
Hult, G. T. M., Ketchen, D. J., & Slater, S. F. (2004). Information processing, knowledge development, and strategic supply chain performance. Academy of Management Journal, 47(2), 241-253.
Inkpen, A. C. (2001). Strategic alliances. The Blackwell handbook of strategic management, 409-432.
Jap, S. D., & Ganesan, S. (2000). Control mechanisms and the relationship life cycle: Implications for safeguarding specific investments and developing commitment. Journal of marketing research, 37(2), 227-245.
Kafouros, M. I., Buckley, P. J., Sharp, J. A., & Wang, C. (2008). The role of internationalization in explaining innovation performance. Technovation, 28(1), 63-74.
Kanter, R. M. (1994). Collaborative advantage: The art of alliances. Harvard business review, 72(4), 96-108.
Koh, A. T. (1998). Organizational learning in successful East Asian firms: principles, practices, and prospects. Technological Forecasting and Social Change, 58(3), 285-295.
Lambert, D. M., Stock, J. R., & Ellram, L. M. (1998). Fundamentals of Logistics Management. Singapore:McGraw-Hill/Irwin.
Leenders, M. R., Fearon, H. E., & England, W. B. (1989). Purchasing and Materials Management. Boston. MA :Irwin.
Lusch, R. F., & Brown, J. R. (1996). Interdependency, contracting, and relational behavior in marketing channels. The Journal of Marketing, 60(4), 19-38.
Malhotra, A., Gosain, S., & Sawy, O. A. E. (2005). Absorptive capacity configurations in supply chains:gearing for partner-enabled market knowledge creation. MIS quarterly, 29(1), 145-187.
Mowery, D. C., Oxley, J. E., & Silverman, B. S. (1996). Strategic alliances and interfirm knowledge transfer. Strategic management journal, 17(S2), 77-91.
Ni, X., & Luo, J. (2007). A trust aware access control in service oriented grid environment. Sixth IEEE International Conference on Grid and Cooperative Computing (pp. 417-422), Los Alamitos, CA: GCC 2007.
Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company: How Japanese companies create the dynamics of innovation. Oxford: Oxford university press.
Park, N. K., Mezias, J. M., & Song, J. (2004). A resource-based view of strategic alliances and firm value in the electronic marketplace. Journal of Management, 30(1), 7-27.
Parkhe, A. (1993), Strategic alliance structuring: A game theoretic and transaction cost examination of interfirm cooperation. Academy of management journal, 36(4), 794-829.
Poppo, L., & Zenger, T. (2002). Do formal contracts and relational governance function as substitutes or complements?. Strategic management journal, 23(8), 707-725.
Prajogo, D. I., Power, D. J., & Sohal, A. S. (2004). The role of trading partner relationships in determining innovation performance: an empirical examination. European Journal of Innovation Management, 7(3), 178-186.
Ring, P. S., & Van de Ven, A. H. (1994). Developmental processes of cooperative interorganizational relationships. Academy of Management Review, 19(1), 90-118.
Sharma, S., Mukherjee, S., Kumar, A., & Dillon, W. R. (2005). A simulation study to investigate the use of cutoff values for assessing model fit in covariance structure models. Journal of Business Research, 58(7), 935-943.
Sheu, C., Rebecca Yen, H., & Chae, B. (2006). Determinants of supplier-retailer collaboration:evidence from an international study. International Journal of Operations & Production Management, 26(1), 24-49.
Simatupang, T. M., & Sridharan, R. (2005). The collaboration index: a measure for supply chain collaboration. International Journal of Physical Distribution &Logistics Management, 35(1), 44-62.
Stank, T. P., Keller, S. B., & Daugherty, P. J. (2001). Supply chain collaboration and logistical service performance. Journal of Business logistics, 22(1), 29-48.
Thibaut, J. W., & Kelley, H. H. (1959). The social psychology of groups. New York, Wiley.
Verwaal, E., & Hesselmans, M. (2004). Drivers of Supply Network Governance: An Explorative Study of the Dutch Chemical Industry. European Management Journal, 22(4), 442-451.
Williamson, O. E. (1979). Transaction-cost economics: the governance of contractual relations. The journal of law & economics, 22(2), 233-261.
Wuyts, S., & Geyskens, I. (2005). The formation of buyer—supplier relationships: detailed contract drafting and close partner selection. Journal of Marketing, 69(4), 103-117.
Zaheer, A., McEvily, B., & Perrone, V. (1998). The strategic value of buyer‐supplier relationships. International Journal of Purchasing and Materials Management, 34(2), 20-26.
Zaheer, S., & Zaheer, A. (2006). Trust across borders. Journal of International Business Studies, 37(1), 21-29.
Zhao, X., Huo, B., Selen, W. & Yeung, J. H. Y. (2011). The impact of internal integration and relationship commitment on external integration. Journal of Operations Management, 29(1), 17-32.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations