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The Determinants of Trust in Supplier-Automaker Relationships in the U.S., Japan, and Korea
Abstract
We examine the determinants of trust in 453 supplier–automaker relationships in the US, Japan, and Korea. We define trust and derive a model of its determinants drawing upon (1) an embeddedness (relationship-based) perspective, (2) a process-based perspective, and (3) an economic (hostage-based) perspective. Our findings indicate strong support for the process-based perspective in all countries; embeddedness was only important in Japan, and the economic hostage-based variable (stock ownership) was not important in any country.
... Concurrently, relational governance mechanisms have gained prominence in fostering cooperation and coordination among partners. Relational governance relies on trust, reciprocity, and shared norms to facilitate interactions and resolve conflicts (Dyer & Chu, 2000). Recent research underscores the pivotal role of trust-building processes in enhancing relational governance within collaborative arrangements (Zaheer & Venkatraman, 2022). ...
... Moreover, the qualitative inquiry delves into the multifaceted nature of collaboration dynamics and partnerships from various perspectives. From a relational standpoint, Dyer and Chu (2000) emphasize the importance of trust, reciprocity, and shared norms in fostering cooperation and coordination among partners. This resonates with the findings of Zaheer and Venkatraman (2022), who highlight the role of trust-building processes in enhancing relational governance within collaborative arrangements. ...
... From a relational perspective, trust plays a critical role in determining the success or failure of collaborative ventures (Dyer & Chu, 2000). Trust facilitates cooperation, information sharing, and joint problem-solving among partners, contributing to the achievement of shared goals (Zaheer & Venkatraman, 2022). ...
This study aims to explore collaboration dynamics and partnerships within contemporary business landscapes, focusing on their significance in enhancing organizational competitiveness. The research employs a qualitative inquiry methodology, drawing on a comprehensive review of existing literature to develop a nuanced understanding of collaborative endeavors. The methodology involves defining the scope and objectives of the study, conducting a thorough literature search, collecting relevant data, and analyzing the findings. The results of the study highlight strategic motivations as primary drivers for organizations to engage in collaborative arrangements, emphasizing the importance of market expansion, technological innovation, and risk reduction. Furthermore, the study delves into the multifaceted nature of collaboration dynamics, examining the role of trust, reciprocity, and governance mechanisms in fostering cooperation among partners. The findings underscore the significance of integrating contractual and relational governance mechanisms to enhance the effectiveness and sustainability of collaborative arrangements. Additionally, the study emphasizes the need for a comprehensive assessment of performance outcomes, encompassing financial, strategic, and relational dimensions. Overall, the research contributes to theoretical advancements in strategic management and collaboration studies, offering insights into the mechanisms driving collaboration dynamics and outcomes in contemporary business environments.
... In fact, much of the literature on interorganizational trust is divided, with different scholars locating the concept at different levels of analysis. Some view interorganizational trust as residing in the micro-level relationship between individual members of distinct organizations (Blois, 1999;Dyer & Chu, 2000), while others conceptualize it at the macro level, between one organization and another (Doney & Cannon, 1997;Sydow, 2006). To start overcoming this unfortunate micro/macro divide, scholars have noted that trust may be located at both the individual and organizational level and, as such, should be thought of as two distinct constructs that can coexist and be interrelated (e.g., Brattström & Faems, 2020;Lumineau & Schilke, 2018;Zaheer, McEvily, & Perrone, 1998). ...
... The purpose of this paper is to develop such a framework and help reduce conceptual ambiguity by advancing a context-dependent middle ground for conceptualizing interorganizational trust. We revisit the long-standing question of whether organizations can trust and be trusted (e.g., Doney & Cannon, 1997;Dyer & Chu, 2000;Zaheer et al., 1998) and reframe it to foreground the extent to which organizations have these capacities and the conditions that explain it. Acknowledging that interorganizational trust can, to varying degrees, exist at both the individual and organizational levels, we introduce to trust scholarship the notion of "organizational actorhood," which allows us to develop a contextual theory to explain the relative importance of these levels. ...
... Just as interorganizational trust can vary in terms of its bases (e.g., more calculative or more relational; Poppo et al., 2016;, it can also vary in terms of the involved organizations' actorhood. This insight helps build a bridge between those who emphasize the role of trust at the micro level between individual boundary spanners (e.g., Blois, 1999;Dyer & Chu, 2000) and those who describe it as a collective phenomenon (e.g., Doney & Cannon, 1997;Sydow, 2006). Our account underlines that there is no single truth when it comes to levels of analysis of interorganizational trust; both positions are valid, albeit to different degrees in different settings. ...
Trust represents a key social mechanism facilitating collaboration in interorganizational relationships. Yet, the concept of interorganizational trust is surrounded by substantial ambiguity, especially as it pertains to the levels of analysis at which it is located. Some scholars maintain that trust is an inherently individual-level phenomenon, whereas others insist that organizations constitute the central sources and referents of trust in interorganizational relationships. Our article addresses this controversy, aiming to reduce conceptual ambiguity and foster cumulative progress. Using a micro-sociological approach, we advance knowledge of the meaning and context-specific relevance of individual- vs. organizational-level trust. Specifically, we apply the notion of organizational actorhood to both the trustor and the trustee in an interorganizational relationship. We then build on micro-institutional and entitativity theory to offer a model of the antecedents of organizational actorhood that identifies a set of contextual conditions explaining the degree to which an organization rather than individuals within it constitutes the focal origin and target of trust. The contingent account we propose here helps bridge disparate traditions of scholarship on interorganizational trust by highlighting that trust can, but need not always, reside to a substantial extent at a supraindividual level of analysis.
... Management of relationships between a network of partners in a supply chain has become a real competitive advantage in many sectors (Dyer, 2000). For virtual developing a processbased approach, also called a cross-cutting, /systemic approach, the key word is the search for real integration between the customer and its suppliers, to the market-imposed goals of reducing development times and logistical response to customer demand. ...
... Managing relationships within a network of partners in a supply chain has become a significant factor in gaining a competitive advantage in numerous sectors (Dyer, 2000). For virtual enterprises adopting a process-based approach, also known as a cross-functional/systemic approach, the key is the pursuit of real integration between the customer and its suppliers, aiming to achieve market-imposed objectives of reducing development lead times and enhancing logistical responsiveness to customer demand. ...
In recent years, a wave of major changes have been observed in all the business processes of supply chain actors. From the shipper to the freight forwarder to the carrier and the driver, the entire supply chain ecosystem is currently undergoing an increased digital transformation and is opposed to processes that are less or more efficient.
This is mainly due to the advent of new innovative logistics information systems, in the form of collaborative platforms or applications that enable the dematerialization of e-mails or telephone calls. It is in this line that the digitalization of logistics activity has begun to impact business processes such as transport. This transversal approach combined with a process approach has led us to propose an innovative digital solution adapted to the transport sector and to each of its participants in the relational integration of the supply chain. It will allow the exploration through the testing of qualitative variables linking the different chosen theoretical constructs.
Keywords: SCM; Transportation; integration; relational; IS, collaborative digital platform
... Another factor that has been extensively studied and is central to IB scholarship is governance (e.g., Aulakh et al., 1996;Das & Teng, 1998;Dyer & Chu, 2000;Kownatzki et al., 2013;Nielsen & Nielsen, 2009). Studies investigating the impact of governance on trust have yielded mixed findings. ...
... These developments might influence the nature and understanding of communication and distance between parties. Given that communication and distance (e.g., Dyer & Chu, 2000;Zaheer & Zaheer, 2006) play an important role in the development of trust, changes in how parties communicate and interact might affect trust development in ways that IB scholars need to understand. ...
Trust between organizations has been recognized as crucial in international business (IB) and has attracted extensive research attention. Researchers have conceptualized and measured interorganizational trust in multiple ways, investigated numerous determinants and outcomes of interorganizational trust, and explored interorganizational trust in several types of international relationships across a range of country combinations using varied research methodologies. Our review aims to consolidate and advance this literature by focusing on (i) how interorganizational trust has been conceptualized in IB; (ii) how interorganizational trust has been operationalized in IB; (iii) what factors promote or hinder interorganizational trust in IB; (iv) what the outcomes are of interorganizational trust in IB; and (v) how interorganizational trust has been studied in IB. For each question, we analyze the literature and then provide recommendations and directions for future research. We aim to provide a solid grounding for future research that will keep this area theoretically sound, empirically robust, and phenomenologically relevant.
... Trust between international business partners facilitates network development and evokes positive emotions such as a sense of security in a situation of vulnerability; it can also help reduce uncertainty. Perceived trustworthiness can also reduce transaction costs and correlates with wider information-sharing (Child and Hsieh 2014;Dyer and Chu 2000). ...
... McKnight and Chervany (2001) identified four categories of trust characteristics, namely benevolence, integrity, competence, and predictability. By the same token, Dyer and Chu (2000) indicated that inter-firm trust is based on three interrelated components: reliability, fairness, and goodwill/benevolence. More recently, emphasized that trust is a foundational leadership concept: ...
This chapter explores how SME entrepreneurs engage in the pursuit of international opportunities, based on a qualitative interview study. Taking an international entrepreneurship perspective, the study identifies fundamental actions and interactions of SME entrepreneurs in the pursuit of international opportunities, and derives three essential and underlying roles they take on in the process. The study thereby contributes to an enhanced understanding of internationalization as an opportunity-driven process and conceptualizes the SME entrepreneur as a powerful agent within the process.
... There is no relationship between the duration of an inter-firm relationship and their level of trust (Gulati & Sytch, 2008). Trust and mistrust can co-exist as firms adjust their mutual expectations over time (Davis, 2016;Dyer & Chu, 2000;Saunders & Thornhill, 2004). Although situations of 'cooperation without trust' are possible in relationships that involve the exchange of physical resources as in buyer-supplier relations (MacDuffie & Helper, 2007), it is difficult to imagine 'collaboration without trust' in organizational ecosystems that involve the sharing of knowledge. ...
... Trust development among firms in horizontal networks is the process of indirect managerial influence, not hierarchical leadership. Trust development in inter-firm relations rarely takes the shape of a natural positive feedback loop, and calls for managerial intervention at the network level in order to continuously build, strengthen and sustain trust (Dyer & Chu, 2000;Ruangpermpool, Igel, & Siengthai, 2020;Sydow, 2006). However, inter-firm trust cannot be developed in the managerial top-down fashion. ...
This conceptual paper focuses on the importance of extending the collaborative dynamic capabilities (C-DCs) view and its emphasis on the boundary spanning strategic communities (SCs) from firm -centric to the network -centric perspective. The C-DC view is an original theoretical perspective that offers a good explanation of corporate-level transformations in the context of cross-sectoral convergence. Although the focus of prevailing research on large firms as cornerstones of SCs is valid, it does not fully capture the more complex dynamics that take in the horizontal networks of firms. We show that C-DC and SC theoretical perspectives can be adapted to the context of regional industrial clusters and contribute to their strategic renewal. The paper conceptualizes the different challenges and nature of leadership that prevail in SC-based firms networks. It also presents the different enabling aspects of collaborative DCs (with regard to trust building, co-specialization and capability synthesis) in firm- vs. network-centric environments.
... Furthermore, drawing on the theory of transaction cost economics (TCE), it can be argued that partnerships founded on mutual trust can decrease transaction costs by relying less on formal contracts and governance mechanisms [64]. For instance, inter-organizational trust may allow business partners to lean less on contractual agreements, leading to greater economic value for all participants in the operational channel [65]. A recent study found that integrating innovative supply chain assets from different partners involved in inter-organizational relationships can reduce costs [15]. ...
This research explores the interaction between inter-organizational trust, marketing channels, and market and financial performance (FP) in establishing sustainable global marketing channels using Industry 4.0 technologies. It is conducted within the relational exchange theory (RET) framework and transaction cost economics (TCE). The sample (N = 131) was collected through the marketing research firm Centiment. PLS-SEM and Necessary Condition Analysis (NCA) were utilized as statistical methods. All hypotheses except the relationship between marketing channel operational performance and FP were accepted. This research highlights the vital role of inter-organizational trust in enhancing operational efficiency, profitability, and sustainability. It finds that trust fosters collaboration in global distribution channels, improving performance across multiple dimensions. Specifically, trust positively impacts marketing channel operations, boosting market performance. Nevertheless, all exogenous constructs were essential—“must-have” conditions for the endogenous FP construct. Applying the novel NCA is distinctive, primarily as it demonstrates that the relationship between marketing channel operational performance and FP is a necessary “must-have” condition, despite the insignificant path coefficient between the constructs. This is a crucial finding, as further investment in marketing channel operational performance and other antecedents of FP may be futile if the necessary conditions have not been met.
... Third, by explaining the casual relationships among evolving trust, ex-ante opportunism, and ex-post opportunism, this study provides a deeper understanding of how trust building can mitigate opportunism throughout a buyer-supplier relationship. Buyer-supplier relationships evolve over time, becoming more or less cooperative, and trust, likewise, is dynamic can be nurtured or destroyed (Dyer and Chu, 2011;Jones and George, 1998). By considering the dynamic unfolding of interaction between trust and opportunism, this study clarifies how, why and when trust reduces or increases opportunistic behaviors, thereby addressing existing controversies regarding the role of trust in controlling opportunism. ...
Opportunism poses a significant challenge in business-to-business exchange relationships, particularly when companies aim for sustainable relationships. While trust is known to influence opportunism, its role across different stages of buyer-supplier relationships remains unclear in the existing literature. This study empirically investigates (1) the occurrence of opportunism before and after formal contract signing, specifically ex-ante and ex-post opportunism, and (2) the relational mechanisms for mitigating these types of opportunism. This study draws on transaction cost economics, contingency theory, and a process view of trust to explain the mechanism of how, when, and why trust influences opportunism throughout the different stages of a buyer-supplier relationship. An inductive theory-building approach through exploratory interviews methods was employed to address these theoretical issues. Data were collected through 25 semi-structured interviews conducted from April 2020 to November 2021 in both Japan and Vietnam. Our findings reveal the evolution of trust across different stages of buyer-supplier relationships: (1) in the initial stage, trust is formed by empirical evidence and relational assessment; (2) in the mature stage, trust is sustained by emotional connections and personal experiences. This dynamic interplay between trust and opportunism creates a powerful mechanism for mitigating opportunistic behavior. By understanding this process, managers can foster trust to safeguard against opportunism and build more collaborative and sustainable supplier relationships.
... Although multiple respondents per subsidiary would have been preferred (likely at the cost of a smaller overall sample), in line with other studies (e.g. Dyer and Chu, 2000), our respondents were from the top management level of the subsidiary and therefore knowledgeable to answer our questions. ...
Purpose
Although organizational identification has been recognized as crucial for multinational enterprises, its configurations regarding innovation performance at the subsidiary level have hitherto received scant attention. Accordingly, the purpose of this research is to identify the types of configurations in which organizational identification in foreign-owned subsidiaries leads to high innovation performance.
Design/methodology/approach
We base our research on social identity theory and the neo-configurational perspective to test our framework using survey data collected from subsidiaries located in Thailand and Vietnam.
Findings
Our results provide evidence that organizational identification serves as a glue that binds strong inter- and intra-organizational network relationships to drive innovation performance. While we find some variation in that pattern between the two host countries, it appears overall that the conditions of expatriates in top management and the geographic distance between home and host country only play a peripheral role. We identify the “integrated innovation driver” and “distant local hub” as two subsidiary archetypes that show how organizational identity can drive high innovation performance in subsidiaries.
Originality/value
This study is one of the first to empirically investigate the main complementing factors in the context of organizational identification and innovation in foreign-owned subsidiaries, which have previously predominantly been investigated in isolation of each other.
... In the strategic management and related literatures, trust/norms-based views of relational governance are usually associated with the shadow of the pastthat is, accumulated interactions that lead to the development of trust and the operation of shared norms of reciprocity (Dyer & Chu, 2000;Gulati, 1995;Ring & Van de Ven, 1994). 4 In contrast, incentive-based views of relational governance are associated with the shadow of the futurethat is, the expectation of future interactions that strengthen the threat of termination as a relational incentive tool (Lumineau & Oxley, 2012). ...
For many firms, designing governance structures for their inter-organizational relationships is a key strategic challenge. Strategic management and other management scholars have successfully applied concepts from sociology, economics, and organization theory to analyze this challenge. Despite their attention to the relational dimension of governance, however, these scholars have drawn very little from a stream of economics research that directly addresses relational governance and has become established in that field: namely, the economics of relational contracts. In this essay, we discuss what the economics of relational contracts can add to management studies of the governance of interorganizational relationships. We explain how the economics of relational contracts sheds light on the relative roles of, and interactions between, the shadow of the past and the shadow of the future in supporting interorganizational collaboration. In so doing, we suggest how economic models of relational contracts can radically change the interpretation of observations that management scholars have made about collaborative relationships they have studied. We also show how the economics of relational contracts literature can contribute to the extended debate about whether and when contracts are substitutes or complements for unwritten agreements. Finally, we discuss implications for the ways in which the economics of relational contracts can help us to better understand the governance of inter-organizational relationships.
... Scholars examining interorganizational trust have long debated whether this trust should be examined as an individual-level (e.g., Dyer & Chu, 2000;Gillespie & Dietz, 2009) or an organization-level phenomenon (e.g., Doney & Cannon, 1997;Schoorman, Mayer & Davis, 2007). Schilke and Lumineau (2023) engage with this fundamental debate by conceptualizing interorganizational trust in terms of a continuum of organizational actorhood (e.g., Coleman, 1974;King, Felin & Whetten, 2010). ...
... (www.preprints.org) | NOT PEER-REVIEWED | Posted: 11 July 2024 doi:10.20944/preprints202407.0849.v16 ...
This study explores the strategic importance of leveraging supplier relationships for competitive advantage in the e-commerce industry. Strong supplier relationships are crucial for enhancing operational efficiencies, cost management, quality assurance, innovation, sustainability, and overall supply chain resilience. Through collaborative partnerships, e-commerce companies can streamline logistics, reduce costs, ensure consistent product quality, and foster innovation through joint development initiatives. Ethical sourcing and sustainable practices play a pivotal role in supplier relationship management (SRM), aligning with consumer expectations and enhancing brand reputation. Advanced technologies such as AI, blockchain, and IoT further transform SRM practices by improving transparency, efficiency, and decision-making capabilities across the supply chain. The study also discusses challenges in managing global supplier relationships, emphasizing the importance of effective communication, cultural sensitivity, and strategic risk management. By addressing these challenges and nurturing trust-based relationships with suppliers, e-commerce firms can navigate market complexities and achieve sustainable growth. This research provides insights for e-commerce companies seeking to optimize their supplier relationships and maintain competitive advantage in a dynamic market environment.
... In Western countries, firms or plants prefer to look for their self-interest, and there is more emphasis on the customer side. Meanwhile, firms or plants in Eastern countries would concern with all parties' benefits and wealth and build trust to create a strong supplier network (Ralston et al., 1997;Dyer and Chu, 2000;Eisenbeiss et al., 2015). These differences might affect the FE process and subsequent product development. ...
... If one assumes it obtains a trust status with its partner, it is reasonable and to some extent nature to expect an equitable sharing of benefits and risks. Thus, it tends to minimize/prevent the partner's opportunistic behavior which in turn precipitates lowering both ex-ante and ex-post transaction costs (Williamson, 1985;Dyer and Chu, 2000;Chickland et al., 2012). ...
Survival of enterprise to some degree depends on how to manage transaction cost. It is more so in a highly competitive market with competitive products such as technology-based products. In economics, the theory of transaction costs is based on the assumption that people are influenced by competitive self-interest. Transaction cost economy which was developed by Williamson (1981) is based on uncertainty and unpredictability in the world. Asset specificity, organizations that enter into transactions find it expensive to leave them, inherent opportunistic behavior of individuals in an economic transaction making it harder for contractual agreements to be enforced fully after a long period of time. Although the transaction cost has been extensively discussed and used in supply chain management field, no economic theoretical arguments has been advanced as to how transaction cost help improving economic growth. This paper attempts to explain how transaction cost could add to economic growth.
... In general, businesses engage in inter-organizational connections abroad to reduce costs, establish selective alignment between host country risks and company control, and gain knowledge from their partners (Aguilera, 2011). The global market to multinational hierarchy spectrum encompasses a wide range of inter-organizational linkages, from supplier ties (Dyer & Chu, 2000) to multinational corporate groups (Colpan et al., 2010). ...
The paper studies strategic alliances and their role in international business. The importance of strategic alliances in the global economy has increased. Strategic drivers for interfirm co-operation between alliance partners are market growth, cost reduction, reducing risk, and access to knowledge. The author focuses on the advantages and disadvantages of strategic alliances. The challenges of managing international strategic alliances are also discussed. Ensuring the success of strategic alliances between international firms is more difficult due to alliance partners’ differences in national, organizational and professional culture. International strategic alliances are critically important to a firm success and coping with globalization, deregulation, and developments in information and transportation technology.
... Institutions prioritize the well-being of employees, while employees focus on institution's long-term intents and status to uphold its integrity in competitive environments (Chiva & Mallén, 2013). Trust represents the employees' confidence in organization's actions, ensuring the effectiveness and smooth functioning of activities aligned with organization's long-term commitment to success (Dyer & Chu, 2011). When trust is high, workers feel safe, valued, and respected, leading to increased job satisfaction, productivity, and collaboration. ...
The organization's performance is typically an amalgamation of a number of characteristics that, when combined together produce organization’s overall performance. Every organization strives to achieve its stated objectives while giving serious concern to its ability to preserve its existence and profitability over the long term. Organizational trust is considered as a crucial factor to enhance employees’ performance and in turn organizational performance. The present study aimed to investigate the association and cause-and-effect relationships of organizational trust with organizational performance among the faculty members in context of HEIs in southern regions of KP, Pakistan. The data was collected from respondents through close-ended questionnaire. 313 faculty members from HEIs were surveyed. Results revealed a significant association & cause-and-effect relationships amid organizational trust and organizational performance. At the end, some valuable recommendations to policymakers of HEIs are offered. Additionally, some suggestions for future researchers are also provided by the researchers on the bases of current study findings.
... From the network perspective, the highly embedded strong ties in high intensity would increase familiarity, mutual understanding, trust, reciprocity, and predictability among the colocators (Coleman, 1988;Dyer & Chu, 2000;Gargiulo & Benassi, 2000;Granovetter, 1985;Gulati, 1995). As Granovetter (1985: 450) articulates ''continuing economic relations often become overlaid with social content that carries strong expectations of trust and abstention from opportunism.'' ...
This study investigates types and performance implications of competitive colocation from a network perspective. Drawing on the literature of industrial organization, economic geography, and social network analysis, we introduce a new conceptualization of location choice and colocation as an inter-firm network relationship and advance a theoretical framework on the dimensions of competitive colocations and their implications on firm performance. We maintain that this new approach provides an integrative framework to better understand the types and performance implications of competitive colocation. We first introduce two distinct dimensions of a focal firm’s competitive colocation, intensity and diversity, along with which we develop a typology of a focal firm’s structural position in the competitive colocation network: simple colocation, multicountry colocation, and multifirm colocation. We test predictions of the theoretical framework with subsidiary location information of the firms listed in the Fortune Global 500. The results of empirical analyses corroborate the main thesis of the current study that the intensity and diversity of a focal firm’s competitive colocation individually and jointly influence firm performance. In addition, we find that, on average, multicountry colocation outperforms the other two types of colocation.
... Frequent, accurate and open communication among partners is viewed as a key factor in motivation (Giunipero, 1990). It may offer cues for interpreting partners' behavior and thus is an effective tool to develop trust between partners (Dyer and Chu, 2000). Generally, intense communication is critical for coordination actions and resolving disputes, as it assists in achieving and monitoring agreements and preventing misunderstandings (Anderson and Weitz, 1989). ...
This paper aims to investigate the effect of product complexity and communication quality on inter-organizational cost management (IOCM) and open book accounting (OBA) practices in buyer–supplier relationships in Malaysian manufacturing firms.
Design/methodology/approach
A questionnaire survey was administrated to CFOs or accounting managers of Malaysian suppliers. Exploratory factor analysis and Structural Equation Modeling procedures were applied to test convergent and discriminant validity of the measurement model and examine the relationships among the latent constructs in the structural model.
Findings
The results suggest that IOCM and OBA scales show acceptable reliability and validity. The findings also report that both product complexity and communication quality have a positive effect on IOCM and OBA in buyer–supplier relationships. However, the results suggest that IOCM does not influence OBA practice.
Research limitations/implications
Although IOCM and OBA constructs exhibited satisfactory reliability and validity, future research is required to refine and further validate these constructs. The data were only collected from the supplier’s perspective. Thus, future research is invited to benefit from matched data from both suppliers and buyers to generate additional insights on IOCM and OBA.
Practical implications
This study may assist suppliers and buyers in relationships by suggesting that complex products require the adoption of IOCM and OBA practices to reduce information asymmetries and manage costs. Furthermore, emphasizing quality of communication may enhance the implementation of these practices.
Originality/value
Theoretically, this study contributes to the academic stream of management accounting and cost management as it enhances an understanding of contributions introduced in prior literature on IOCM and OBA. It uses a complementary approach of transaction cost theory (TCT) and social exchange theory (SET) to explain the research model. Methodologically, the study validated scales for measuring IOCM and OBA in a new environment.
... Trust is one of the important elements in the SC partners' relationship as it facilitates collaborative processes, positively impacts stakeholders' satisfaction, commitment and loyalty and contributes to better performance of the whole chain (Han et al., 2021;Ferreira da Silva & Moro, 2021;Seebacher & Schüritz, 2017). Trust was recognized as a key reason for the worldwide success of Japanese auto manufacturers (Dyer & Chu, 2000) and examples of Volkswagen's plants in Brazil and Spain and Chrysler's Eurostar plant in Austria showed that trust was directly connected to the increase of Just-in-Time capabilities (Narasimhan & Nair, 2005). Lack of trust can prevent the exchange of accurate information between the parties, increase transactional costs and even hinder the process innovations in the Supply Chain (Panayides & Venus Lun, 2009;Sahay, 2003). ...
Blockchain technology offers substantial benefits to supply chains (SCs). Along with transparency and traceability and other undeniable advantages, blockchain technology enables smart contract integration. Blockchain and smart contracts are, however, not flawless and can create a new category of disputes. The recognition of these disputes by traditional legal institutions is questionable. This chapter presents the concept of blockchain arbitration that allows for smart contract and blockchain dispute settlement via a decentralized resolution platform. The chapter reveals that despite existing challenges, blockchain arbitration can enhance the resolution process in terms of flexibility, cost, and time reduction, increase trust among SC stakeholders, and boost overall SC performance.
... Trust is the foundation of social exchange and the link between interpersonal communication and social relations [54]. Trust refers to situations in which the trustor generates expected benefits based on the trustee's sincerity and reliability, and is willing to bear the risks or vulnerabilities brought by the trustee [55]. ...
Online communication is an effective solution to the social isolation of older adults that can result from attempts to avoid COVID-19 transmission, but they may not be familiar with virtual identities in online communication and struggle to develop trusting relationships. We address this dilemma in this study by using qualitative methods including semi-structured interviews. We employ the social exchange theory and trust transfer theory to develop a conceptual model from three perspectives: the characteristics of the trustor, those of the trustee, and their shared factors. We find that trust is moderated by social isolation and health concerns experienced by older adults during the pandemic and that outcomes associated with trust building include satisfaction, reliance, and loyalty. The findings enrich our understanding of the mental health of older adults and online interactions during the COVID-19 pandemic, and can be extended to similar contexts in which long-term isolation is necessary.
... The articles on strategic alliances mainly discussed the essentials for building relationships and networks within alliances, which are basically the strategies, culture, and trust involved (Adler & Graham, 1989;Kim & Hwang, 1992;Dyer & Chu, 2000;Johanson & Vahlne, 2009). Like the articles on the transfer of knowledge, these articles appeared in the second half of the time period reviewed. ...
Past studies have attempted to identify the domains of international business over specific periods of time. Most have used data sets for short time periods, providing a snapshot of the field for the period under review. This chapter reviews the research in the area of international business for the past five decades, with the objective of understanding the path that research has taken during that period in terms of research content, relevance, and methodology. While this understanding supports a proposal for a research agenda for the future, from the perspective of both content and methods in international business research, the impact of the pandemic may require a re-look at the trends that have been presented. The chapter addresses some of the potential changes in the trends in the research agenda that could occur due to the pandemic.
... The final selected factors are detailed in Table 1. Table 1 Selected factors of collaboration performance from literature review • Trust: Trust is defined as a state of mind and confidence in a partner's behaviour that tends to be acceptable and predictable (Dyer and Chu, 2010). Chin et al. (2008) suggest that high levels of trust reduce conflict, result in greater partner satisfaction, and improve cooperative behaviour. ...
... We believe that employees decide to share their concerns on workrelated issues by assessing the superiors' behavior and treatment of employees. According to social exchange theory, trust is a significant element of social exchange [11], and it lies at the heart of interpersonal relationships [12]. Thus, individuals may consider the trust factor when assessing superiors' behavior before sharing information. ...
The purpose of this paper is to test the role of trust in supervisors in mediating the link between paternalistic leadership styles and employee voice and to investigate the contingency role of self-efficacy on the relationship between trust in supervisors and employee voices. We designed the items using survey questionnaires that were assessed by prior studies and collected data from 485 highly skilled employees of manufacturing organizations. To assess the validity of the suggested hypotheses, we used a Baron and Kenny (1986) approach and conducted hierarchical regression analysis. The findings reveal that authoritarian leadership and moral leadership styles are significantly related to trust in supervisors, which explains the association between authoritarian leadership style, and moral leadership style and employee voice. However, the results suggest that trust in supervisors does not explain the association between benevolent leadership style and employee voice. Moreover, the findings reveal that self-efficacy moderates the link between trust in supervisors and employee voice. The originality of this work lies in the fact that this research is the first to test the mediating role of trust in supervisors in the relationship between paternalistic leadership styles and employee voice and the moderating role of self-efficacy on the association between trust in supervisors and employee voice.
... This area includes strategic alliance formation and relationships, business networks and outcomes of strategic alliances. Classical research in this area includes alliance stability (Celly et al. 1999), continuity (Dyer and Chu 2000), negotiation tactics (Rao and Schmidt 1998), value creation (Holm et al. 1999), network responsiveness (Zaheer and Zaheer 1997) and changes in knowledge structure (Chikudate 1999). Research on international strategic alliances has benefited from the application of organizational learning theory (Makino and Delios 1996;Parkhe 1993;Yan and Gray 1994) and by conceptualizing the strategic alliance as a learning race (Hamel 1991;Inkpen and Beamish 1997). ...
International Management is a vast and multidisciplinary research domain that is heavily influenced by several other disciplines, such as Economics, Organizational Theory and Strategic Management. Based on 28,973 research articles, this study aims to analyze the knowledge structure of the international management domain from 1920 to 2019. Using computational text-based topic modeling analysis, we trace the evolution of international management knowledge by examining the major academic topics/latent themes discussed in the field. The study also diachronically visualizes the variations in topic prevalence over time. Our methodology is akin to “inductive mapping” as it is neither biased by our position nor it is guided by assumptions related to the topics we expect to find. Results indicate the existence of a wide variety of important research foci in the domain of international management. These include, among others, strategic alliances formation, international entry modes, corporate social responsibility, cross-cultural consumer behavior, technological innovation and entrepreneurship. Results also show that some topics such as “financial risk and return on investment” and “corporate social responsibility” show a declining time trend, indicating that academic research focusing on such topics was more likely to be published early on and less so recently. On the other hand, other topics such as “Emerging (East) Asian nations” and “global mergers and acquisitions” show an increasing trend, indicating that more papers were published recently. Taken together, although our findings might reflect the breadth and depth of research in international management, they might also suggest that the bounds of this field are not well defined.
... They will, therefore, adjust their operations in dynamically competitive environments and customize that environment by committing resources to exploit uncertain opportunities (Mao et al., 2015). Moreover, considering the power asymmetry between buyer and subcontractor, initiatives taken by the buyer can strongly reinforce the reciprocal commitment of the weaker subcontractor (Dyer and Chu, 2000;Jean et al., 2012;Kang et al., 2009). These routines can, therefore, motivate subcontractors to invest in new ideas, new methods of operation and new ways of doing things to keep up with the buyer's requirements (Inemek and Matthyssens, 2013). ...
Purpose
This paper aims to contribute to international business research by providing an integrative framework of the factors determining the learning process of outsourcing companies in developing countries.
Design/methodology/approach
A systematic review of the literature was performed with an analysis of 84 articles published in peer-reviewed academic journals, published between 2000 and 2020.
Findings
The results show that the different factors should be seen as complementary and not mutually exclusive. It is the interaction between macro and micro factors that jointly shape the learning of developing country subcontractors. Moreover, the results of the analysis show that many existing studies have not been based on specific theoretical frameworks.
Research limitations/implications
This study develops a roadmap of the current state of research on the determinants of learning among developing country subcontractors and offers suggestions to guide future research. The authors conclude with a call for methodological advancement and theory development on the topic.
Originality/value
To the best of the authors’ knowledge, this study proposes the first comprehensive review of the literature on the factors determining the learning of subcontractors in developing countries. The authors have tried to provide an integrative analytical framework to discuss what has been known and what needs to be known in this regard.
... In this regard, employees that perceive high levels of POS are more likely to reciprocate the organization with positive attitudes such as higher levels of commitment (Eisenberger et al., 1986). Social exchange relationships are also determined by some unwritten rules, which are based on trust (Dyer and Chu, 2011). As relationships in organizations are based on trustworthiness, trust is crucial in establishing social exchange (Nunkoo and Ramkissoon, 2012). ...
The most important mission of universities is the production of highly skilled manpower and research outputs. In this context, the ability of universities to implement these missions is directly related to their human resources. Academics are the most important intellectual capital of universities, and the support they receive from the universities they work for plays a critical role in the realization of this objective. Organizational trust is also vital for successful relations and collaboration to share research and teaching ideas and address problems in universities. Both of these have an impact on their scientific activities, as well as motivation to work and commitment. Therefore, drawing on the social exchange theory, the aim of this study was to examine the effects of young academics’ perceived organizational support and organizational trust on their organizational commitment behaviour. The sample comprised 305 young academics in Turkey. This study showed that perceived organizational support and organizational trust have a significant and positive impact on affective and normative commitment. However, trust in managers has a significant and negative impact on continuance commitment.
Keywords: perceived organizational support (POS), organizational trust, organizational commitment, social exchange theory, young academics
... New ventures frequently form cooperative agreements with universities, other firms, and government lab, and use license to leverage their resources or jointly develop and market new products. Although strategic alliances are subject to trust, contractual, and rent appropriation issues, cooperative alliances have shown to lead to the generation of new competence and higher performance (Dyer and Chu 2000;Dyer and Singh 1998). ...
Internationalization is an important strategic option for new ventures by providing growth opportunities. This study firstly examines how founding team, alliances and license strategy influence new venture internationalization, and then explores whether new venture internationalization affects its performance. Using panel data of 4,928 new ventures between 2007 and 2009 from the Kauffman Firm Survey, the study finds that the number of active founders and foreign founders, alliances with university and other firms, and license-out strategy are positively related to new venture internationalization. More importantly, it is found that new venture internationalization helps increase revenues. This finding advances a better understanding of why many new ventures go international in their early stage though facing various resource constraints.
... Though Dyer and Chu (2000) reported that higher trust in alliances leads to lower transaction costs, greater information sharing, and superior performance, firms are successful in creating value only if partners develop an effective system of sharing knowledge and absorbing new knowledge (Vasudeva and Anand, 2011). Moreover, a firm loses its competitive advantage if its resources and capabilities are imitated by competitors; in a similar vein, consumers also lose distinctiveness of their products to competitors (Dyer et al., 2018) if they disclose the name of the suppliers or spread positive words about them. ...
The extant literature analysing the impact of value co-creation on consumers' need for differentiated products is sparse, so the present study examines the role of consumers' need for differentiation in relating value co-creation with consumers' word-of-mouth to foster competitive advantage. Specifically, we investigate the effects of innovation differentiation and market differentiation on micro businesses' abilities to co-create value and generate positive word-of-mouth, which ultimately helps them sustain their revenues. We collect data from a sample of 196 female consumers who participated in the co-creation process used in the micro businesses to design trendy apparel. We use structural equation modelling to test the hypotheses. Having a strong desire for differentiation in their dresses, these consumers invest their resources and capabilities in designing their own apparel. The results show that value co-creation not only leads to consumers’ need for differentiated products (enabling the differentiation strategy), but also results in negative word-of-mouth. More particularly, value co-creation leads to differentiated offerings but consumers desirous of possessing unique products do not spread positive words about the professional designer. As a result, sustaining economic development in emerging economies dominated by micro and small businesses is still a big challenge.
This qualitative study explores collaborative supplier relationships within the context of e-commerce, aiming to uncover the dynamics, challenges, strategies, impacts, and future trends shaping these partnerships. Through thematic analysis of interviews with e-commerce platform managers, supplier representatives, and industry experts, the study identifies three primary types of relationships: transactional, relational, and strategic. Critical factors influencing these relationships include trust, effective communication, technological integration, and regulatory compliance. Challenges such as information asymmetry, cultural differences, logistical complexities, and competitive pressures are examined, alongside strategies for enhancing collaboration, including clear communication protocols, performance evaluations, and technological advancements. The findings highlight the significant impact of collaborative supplier relationships on business performance, including cost efficiencies, supply chain resilience, innovation capacity, customer satisfaction, and market competitiveness. Looking forward, trends in digital transformation, sustainability initiatives, global supply chain networks, resilience-building strategies, and industry collaboration are discussed as shaping the future landscape of e-commerce partnerships. Embracing these trends presents opportunities for organizations to innovate, adapt, and sustain growth in the competitive digital marketplace.
Purpose
The vulnerability of customers to malware attacks through weak supplier links has prompted a need for collaboration as a strategic alternative in improving supply chain cybersecurity (SCC). Current studies overlook the fact that the effectiveness of cybersecurity strategies is dependent on the form of interfirm relationship mechanisms within which supply chain digital assets are embedded. This paper analyses the association between interfirm collaborative cybersecurity management capabilities (ICCMC) and cybersecurity parameters across a supply chain and proposes an agenda for future research.
Design/methodology/approach
A systematic literature review (SLR) is conducted, employing text mining software to analyse content extracted from 137 scholarly articles on SCC from January 2013 to January 2022.
Findings
The co-occurrence analysis strongly confirms the potential of ICCMC to reinforce SCC. Furthermore, we establish that relational factors could have multiple roles: as antecedents for ICCMC, and as factors that directly affect SCC parameters. The analysis reveals knowledge gaps in SCC theory grounding, including a fragmented and sparse representation of SCC parameters and the potential presence of an omitted variable – SCC – that could improve subsequent testing of causal relationships for theory development.
Originality/value
The paper’s contribution is at the intersection of interfirm collaboration and mandating cybersecurity requirements across a supply chain. Our paper contributes to closing a social-technical gap by introducing social aspects such as the Relational View and the importance of developing ICCMC to reinforce SCC. We offer a method for testing co-occurrences in SLRs, a comprehensive definition of SCC, and a framework with propositions for future research on increasing the effectiveness of collaborative cybersecurity management. We position collaboration as a necessary condition for the transition from cybersecurity of a firm to cybersecurity across a supply chain, and its ecosystem.
The nature of informal networks in various societies, and particularly whether they recede or tend to persist over time, has long been a subject of discussion in international business studies. However, empirical research on trust in network-oriented societies, where individuals typically maintain somewhat different relationships with their in-group, out-group, and non-specified others, remains limited. Drawing on insights from informal network research and intergroup contact theory to model trust relationships in network societies, 882 respondents from three network societies-China, Russia, and South Korea-were surveyed, and confirmatory factor and path analyses applied. The results suggest that as network importance increases, both in-group trust and out-group trust also increase. Individuals who more commonly draw upon out-group trust ties attach less importance to in-group trust ties. Increases in non-specific trust, however, are associated with increases in both in-group and out-group trust, pointing towards the boundary spanning function of non-specific trust. Consequently, rather than finding a clear indication of whether informal networks persist or recede, ambivalent trust relationships were observed. This calls for a reexamination of the conventional 'either/or' perspective on the nature of informal networks. This network heterogeneity can be attributed to individuals, especially in developing network societies, utilizing a 'both/and' approach to trust and networking, and yielding more economic opportunities.
This study aims to clarify, reaffirm, and extend empirical bases for the long-established claims of the relationship between Weberian bureaucracy and growth. Using the same dataset while taking issue with the core assumptions and methodologies of the seminal paper by Evans and Rauch (1999), this paper takes more seriously the multiple micro-level causal paths and the logically prior conditions of state-society relationship that activate the positive relationship between Weberian bureaucratic traits and national-level growth. Most of the test results confirm that (1) meritocratic recruitment system based on formal exam and higher educational credentials, (2) long-term career ladder based on internal promotions and length tenure, and (3) competitive salary relative to private sectors had robust positive effect on economic growth. However, the bureaucratic level of autonomy with regards to policy formulation had the moderation effect, serving as a precondition for such effects to exist in the first place.
Résumé
Cette recherche examine l’effet de la confiance, la collaboration, le partage d’informations
entre les partenaires logistiques et l’engagement sur la performance des services logistiques
externalisés. Pour mesurer cet effet, les données ont été collectées auprès d’un échantillon
d’entreprises opérant dans le secteur automobile et les équipementiers installées dans les
zones de Tanger Free Zone, Tanger Automative City et à Melloussa. Les méthodes des
équations structurelles avec l’approche des moindres carrés partiels ont été mobilisées en
prenant soin de tenir compte des erreurs systématiques et des erreurs aléatoires. L’estimation
du modèle structurel montre que le partage d’informations et la collaboration ont plus d’effet
sur la performance. Ce résultat met en exergue l’importance du concept de coopétition dans
les chaînes logistiques qui sont devenues de plus en plus globales.
Abstract
This research examines the effect of trust, collaboration, information sharing and commitment
on the performance of outsourced logistics services. Data were collected from a sample of
companies operating in the automotive sector located in the Tangier Free Zone, Tangier
Automative City and Melloussa. Structural equation methods with a partial least squares
approach were used, taking into account both systematic and random errors. The estimation of
the structural model shows that information sharing and collaboration have a greater effect on
performance. This result highlights the importance of the concept of coopetition in supply
chains, which are becoming increasingly global.
The purpose of this study is to empirically evaluate the direct and interaction effects of formal and relational control mechanisms on franchisor performance. The causes of performance in franchise networks have been overlooked. Therefore, this article juxtaposes the influence of authoritative, contractual, and relational mechanisms on network performance depending on whether franchisors participate in unilateral or mutual decision making with their franchisees. Using primary data from Germany and Switzerland, it is found that both mechanisms of contractual and relational control enhance the profitability and efficiency of franchise networks either when used individually or in combination, while authoritative control diminishes performance, and that its negative performance effect is strengthened with more contractual control, but positively moderated by relational control.
Drawing on the transaction cost analysis perspective, this study examines how three types of exchange risks influence performance in exporter-importer exchange relationships. These risks include cultural distance, which gives rise to behavioral uncertainty and its associated measurement problem; market turbulence, a dimension of environmental uncertainty that gives rise to an adaptation problem; and transaction-specific assets, representing a safeguarding problem. The conceptual model assesses how an informal governance mechanism, inter-organizational trust, responds to these three exchange risks and, in doing so, fosters relational and export performance. Based on a structural equation model conducted in PLS, our findings indicate that cultural distance relates positively to inter-organizational trust, and market turbulence positively relates to exporter-specific assets. Exporter-specific assets and inter-organizational trust were found to have a reciprocal relationship. This research also confirms the mediating role of relational performance concerning the effects of exporter-specific assets and inter-organizational trust on financial export performance.
The main goal of this research is to test the association between trust in institutions—e.g., police, law courts, property rights, government regulations, and public and private organizations—and entrepreneurial internationalization. The longitudinal analysis uses data obtained from the Global Entrepreneurship Monitor (GEM), the Heritage Foundation Index of Economic Freedom (IEF), World Bank Worldwide Governance Indicators (WGI), and World Development Indicators (WDI) for a sample of 88 countries during 2013-2018. Using factor analysis and panel data techniques that control for potential endogeneity, institutional trust is found to be significantly correlated with internationalization; however, this result is only valid for small and medium-sized enterprises (SMEs) in developing countries. Therefore, entrepreneurs from developing economies have to overcome the lack of institutional trust to successfully carry out their internationalization process.
Purpose
Although trust and distrust as distinct phenomena are of increasing interest to operations and supply chain management (OSCM) scholars, they have been inconsistently conceptualized and there is a lack of evidence regarding the distinctiveness of their respective antecedents. This study, therefore, focuses on one of the most widely accepted dimensions of trust, benevolence, to help more fully analyse (supplier) trust and distrust (in a buyer) and explore the effects of relational norms and structural power as specific antecedents.
Design/methodology/approach
The study employed a scenario-based role-playing experimental method. The proposed hypotheses were tested using structural equation modelling.
Findings
The results that while relational norms increase supplier trust, power asymmetry can simultaneously generate supplier distrust, support the coexistence of supplier trust and distrust in a buyer–supplier relationship.
Originality/value
This study is one of the first to explore the antecedents of supplier trust and distrust in a buyer. It demonstrates that supplier trust and distrust can coexist when the relationship is characterized by relational norms and asymmetrical power. This opens important questions for future trust–distrust research.
Purpose
This study aims to contribute to the context of electronic trust (e-trust) research with an emphasis on the determination of tourists’ e-trust in hotel websites. This research used social exchange theory to elaborate how perceived attributes of a hotel website influence purchase behaviour of tourists. This area is often neglected because most studies focus on website users’ adoption or acceptance of other service industries. It is expected that trust-generating mechanisms have different impacts on the e-trust level in the hospitality services.
Design/methodology/approach
A comprehensive literature review identified the major antecedents and outcomes of e-trust. Data was collected from an online survey and 586 usable questionnaires were achieved. Structural equation modelling was used to examine the hypothesized model.
Findings
The results of this study demonstrated that the more tourists perceive influences positively, the more they are possibly to trust in hotel website. Findings revealed that perceptions about the attributes of hotel website, including security, privacy, usefulness, ease of use and compatibility are the main antecedents of trust in hotel website, which, in turn, lead to actual usage of the website for booking online.
Originality/value
This study is based on a large sample of tourists and broadens the understanding of e-trust in hotel websites by considering factors rarely discussed in prior tourism and hospitality literature.
In this study, we examine the relationship between contract types, institutional distance and operational performance in the context of cross-border trade in the LNG industry. Drawing on the buyer-supplier long-term relationships literature, we argue for a negative link between short-term contractual agreements and operational performance. Further, drawing insights from institutional theory we contend that a high level of formal and informal institutional distance between the origin (i.e., supplier) and destination (i.e., buyer) countries reduces operational performance. We also argue that formal and informal institutional distance mitigates the negative effect of short-term contracts on operational performance. Finally, we draw on the role of ‘asymmetry in distance’ by examining the direct and moderating effect of both the relevance and direction of formal institutional distance. We test our assumptions using LNG global trade flows from 39 source countries to 44 destination countries over the 2008-2017 period (a total of 17,447 shipments). Our study extends our knowledge on the operational performance implications of buyer-supplier relationships and stresses the important role formal and informal institutional distance plays as a direct and moderating effect on this relationship.
International purchasing and supply management (PSM) teams have long faced the visibility and understandability challenges of managing geographically dispersed and culturally distant suppliers. Problems arising from inadequate monitoring and control over suppliers can be attributed to geographical and cultural distance, capability gaps, weak institutions, and supply market dynamism. With transaction costs theory as our lens, we examine how international geographically and culturally distant purchasing and supply management (PSM) teams control emerging economy suppliers with formal management controls. We use interview survey data on 339 international customer-Chinese supplier relationships using supplier perceptions of the extent to which performance measurement and monitoring practices are used by their primary customer in the purchase reorder decision and control. The results demonstrate that the cultural and, to a lesser extent, geographical distance between the customer and the supplier is associated with more extensive use of formal management controls. Also, we find the relationship between geographical or cultural distance and the importance of performance measurement is strengthened for suppliers of complex components.
This paper aims to generate thoughts on the traits that denote the trustworthiness of a leader. Drawing upon in-depth interviews with five international Chief Executive Officers and Managing Directors of successful international firms, we will share the experiences and insights gained about their trusted leaders in order to find common ground in the traits of trustworthiness in a leader.A number of competencies were found to be important foundations and are necessary prerequisites for a leader to successfully build up trust. The traits that make the difference between just being a competent leader and being a trusted leader can be defined under an ethical dimension (integrity and honesty) and a relational dimension (benevolence and caring). Highly trusted leaders are equipped with an intelligence quotient, a moral quotient, and an emotional quotient. Assessments and judgments as to whether or not leaders are trustworthy are constantly made both explicitly and implicitly by the people surrounding them. The presence of all three above quotients has to be proven to be genuine and consistent; trustworthiness does not come from a first impression, nor does it come from a gut feeling; it has to be earned and built upon over time.KeywordsTrusted leadersTrustworthiness traitsCompetenciesIntegrityBenevolenceMoral
Both scholars and practitioners highlight the critical role of mutual trust in cross-border technology business relationships. Yet the alliance literature has overlooked the role of emotions and cultural intelligence in developing mutual trust. In a cross-sectional survey of 210 technology business relationships, we find that both a partner's expressing and evoking emotional states are positively associated with mutual trust. We also observe that while interaction with cultural intelligence strengthens the relationship of expressing emotional states with mutual trust, awareness of cultural intelligence weakens it. In addition, awareness of cultural intelligence positively moderates the link between evoking emotional states and mutual trust but negatively conditions the link between expressing emotional states and mutual trust. These findings highlight the importance of emotions as organizational capabilities that can help create an exchange environment characterized by open communication and confidence that partners will meet agreed-on obligations.
Purpose
The purpose of this paper is to explore the interactive effects of employee job autonomy and trust on the relationship between psychological contract fulfilment and work behaviour in international non-governmental organisations.
Design/methodology/approach
Data were collected from 279 employees of international non-governmental organisations (INGOs) with over 10 years of working experience in the INGO industry in Ghana. A questionnaire comprising 27 items pertaining to the study constructs was administered. The reliability of the instrument was verified through item analyses. An exploratory factor analysis was conducted to establish the instrument’s construct validity. The study hypotheses were tested and competing models were compared using multiple hierarchical regression.
Findings
All scales were found to have acceptable reliability estimates. A confirmatory factor analysis established that the manifest variables met the required model fit thresholds and that the latter were empirically distinct. This established the scales' construct validity. The results of the multiple hierarchical regression procedures indicated that a significant number of the study hypotheses could be accepted as statistically significant. A number of moderators were also significant. Specifically, psychological contract fulfilment (PCF) was found to have a positive relationship with organisational citizenship behaviour (OCB). The results also showed a positive relationship between job autonomy and in-role employee performance (IRP) and OCB. There was a positive relationship between both the IRP and OCB. Interestingly, employee job autonomy moderated the positive relationship between PCF and OCB.
Originality/value
This research is among the first of its kind to examine the variables of PCF, work behaviour, employee job autonomy and trust towards the organisation among INGO employees in Ghana. Additionally, the study provides a novel lens to understand the underlying interaction mechanisms through which employee job autonomy moderates the positive relationship between PCF and in-role employee performance. To the best of our knowledge, this study will be the first to combine PCF, trust, employee job autonomy, in-role employee performance and organisational citizenship behaviour in one study. This study confirms and extends the work of Turnley et al. (2003) by including trust and employee job autonomy as key constructs in a social exchange relationship, drawing from the social exchange theory.
Purpose
This study aims to explore the antecedents and consequences of reliance and its relationship with trust in the context of business-to-business (B2B) branding. The study also explores the above relationships in various B2B contexts.
Design/methodology/approach
Survey data of 135 respondents from different B2B firms was analyzed, and the proposed theoretical model was validated using partial least square structural equation modeling technique followed by multigroup analysis.
Findings
The results suggest that commitment, management capability and innovation capability are positively related with reliance, while trust acts as mediator between commitment–reliance relationships. Moreover, while both reliance and trust lead to B2B brand image, reliance has higher relationship strength. Furthermore, reliance mediates the trust–brand image relationship too.
Research limitations/implications
The paper contributes to the literature of reliance and its role in B2B brand image by providing newer insights about the antecedents and consequences of reliance and its relationship with trust.
Practical implications
The findings provide managers with key insights for creating B2B brand image using reliance and trust by focusing on capabilities and commitment.
Originality/value
To the best of the authors’ knowledge, this is one of the few papers in B2B marketing which focuses on the antecedents of reliance and relative importance of trust and reliance.
A conceptual challenge in exploring the role of trust in interorganizational exchange is translating an inherently individual-level concept-trust-to the organizational-level outcome of performance. We define interpersonal and interorganizational trust as distinct constructs and draw on theories of interorganizational relations to derive a model of exchange performance. Specifically, we investigate the role of trust in interfirm exchange at two levels of analysis and assess its effects on negotiation costs, conflict, and ultimately performance. Propositions were tested with data from a sample of 107 buyer-supplier interfirm relationships in the electrical equipment manufacturing industry using a structural equation model. The results indicate that interpersonal and interorganizational trust are related but distinct constructs, and play different roles in affecting negotiation processes and exchange performance. Further, the hypotheses linking trust to performance receive some support, although the precise nature of the link is somewhat different than initially proposed. Overall, the results show that trust in interorganizational exchange relations clearly matters.
Evaluating organizations according to an efficiency criterion would make it possible to predict the form organizations will take under certain conditions. Organization theory has not developed such a criterion because it has lacked a conceptual scheme capable of describing organizational efficiency in sufficiently microsopic terms. The transactions cost approach provides such a framework because it allows us to identify the conditions which give rise to the costs of mediating exchanges between individuals: goal incongruence and performance ambiguity. Different combinations of these causes distinguish three basic mechanisms of mediation or control: markets, which are efficient when performance ambiguity is low and goal incongruence is high; bureaucracies, which are efficient when both goal incongruence and performance ambiguity are moderately high; and clans, which are efficient when goal incongruence is low and performance ambiguity is high.
Why are firms sometimes more efficient than markets at organizing transactions? Why are most transactions arrayed neither at the pure “market” nor at the pure “hierarchy” end of the continuum, but rather in the “swollen middle,” incorporating features of both “market” and “hierarchy”? Why don't firms make greater use of price incentives? This paper addresses these three questions by developing a model of the choice of institution.
One key building block is the distinction between organizing methods (hierarchy and the price system) and institutions (firms and markets). Hierarchy and the price system are two distinct methods for organizing transactions, each with particular costs and benefits. Markets and firms are institutions which use one or both of these methods. Although markets predominantly use prices and firms rely principally on hierarchy, there is not a one-to-one correspondence between prices and markets or between hierarchy and firms. Indeed, the paper argues that it is generally more efficient to use a mix of both methods than to specialize in either.
The paper focuses on the enforcement properties of prices and hierarchy. Hierarchy controls individuals directly by constraining their behavior (by imposing behavior constraints) while prices do it indirectly by measuring their outputs (through price constraints). Under hierarchy, individuals receive a salary to do as told, while self-employed individuals governed by the price system are rewarded on the basis of their output. Each system has its own biases: using prices maximizes effort (minimizes shirking) but incites individuals to inflate the price and/or reduce the quality of their output. (It encourages cheating.) Relying on hierarchy results in the opposite bias: under hierarchy individuals are not paid in function of their output, but instead are rewarded for following directives. They have, thus, strong incentives to minimize effort (to shirk) unless properly supervised, but, being paid a fixed sum to follow orders, they have few incentives to cheat. Hence the price system experiences low shirking, but potentially high cheating costs, while hierarchy faces low cheating but high shirking costs.
Organizing costs are the sum of shirking and cheating costs. Any given transaction will be organized by the mix of price and hierarchy (i.e., by the mix of price and behavior constraints) that minimizes organizing costs. A transaction will be organized within a firm if the reduction in cheating costs achieved by replacing price constraints by behavior constraints exceeds the resulting increase in shirking costs and by the market in the opposite case.
The paper shows that cheating and shirking costs increase more than proportionately as one concentrates in either pure price or behavior constraints. Hence using a mix of both methods generally minimizes the sum of cheating and shirking costs. This explains why most transactions exhibit features of both markets and hierarchy. The paper shows clearly the tradeoff involved between price and behavior constraints. It explains the costs and benefits of using two types of price incentives in firms, piecework and profit centers, and predicts when they will be used.
Japanese industrial firms have developed a system of subcontracting with suppliers that has played a major role in their world-wide success. This book explores the historical evolution of subcontracting in Japan and analyses it in current practice. It develops a theory of ‘strategic dualism’ that after nearly six decades of evolution is a new mode of contractual relations, based on principles of problem-solving collaborative manufacturing. This new form of contractual relations is supported by a range of institutional arrangements that drive prime contractors and subcontractors towards continuous improvement in product quality and cost reduction. It argues that this system is possible in a range of cultures different from Japan.
New Institutional Economics is a new way to look at how organizations function. Rather than seeing the firm as a “black box”, Williamson shows how decision makers respond to economic factors WITHIN the firm—what he calls “transaction cost economics” (TCE). In this series of studies, Williamson shows how complexity expands in organizations because of bounded rationality and opportunism; that is the “bad news” of his message. The “good news” is that individuals within organizations become perceptive of resulting hazards they may and do encounter, and are adept at fashioning their organizations to cope creatively with difficult situations. This creativity accounts for diversity among organizations, in which governance structures are adapted to firm—or industry-specific hazards.
This book is not another parable of Japan's economic success; it provides rich and systematic descriptions of Japanese microeconomic institutions and interprets their work in terms familiar to Western economists. A systematic, in-depth analysis of Japanese institutions of this kind has never been available before. In making his comparative analysis of the Japanese system, Professor Aoki critically examines conventional notions about the microstructure of the market economy that have strongly shaped and influenced economists' approach to industrial organization (e.g., hierarchy as the alternative to the market, the firm as a propery of the stockholders, and market-oriented incentive contracts). While these notions may constitute an appropriate foundation for the analysis of the highly market-oriented Western economies, the author has found that a more complete understanding of the Japanese economy requires us to broaden such 'specific' notions. At one level, therefore, this book may be regarded as a provocative exercise in comparative industrial organization and the theory of the firm. To the extent that this approach is convincing, the book suggests a reordering of focus and emphasis in these studies.
Four streams of inquiry and interpretation are merged in a study of the evolution and emergence of Japan's 200 leading industrial firms during the twentieth century. First, the book is a study of how the industrial institutions of modern Japan appeared and matured. Second, it looks at the basic forms of social interaction and economic organization in Japan. Third, the book is a development study of how circumstances of rapid technical and economic change have shaped the Japanese business system. Finally, it is a study of how Japanese managers have responded to and shaped those circumstances. The fourfold synthesis offers a model of industrial development and organization under conditions of late development and private initiative that falls somewhere between the capitalist development state and free market economy models.
Transaction cost theorists have generally neglected to consider the implications that the invisible hand of the market mechanism can have for the risk of opportunism. In the long run, the invisible hand deletes actors whose behaviors are habitually opportunistic. Consequently, as markets move toward the state of competitive equilibrium, the risk of opportunism will be low, even for transactions supported by specific asset investments. Therefore, in many contexts the transaction cost rationale for internalization has been overstated.
In this discussion I shall make some general remarks about how I now understand the conception of justice that I have called ‘justice as fairness’ (presented in my book A Theory of Justice).1 I do this because it may seem that this conception depends on philosophical claims I should like to avoid, for example, claims to universal truth, or claims about the essential nature and identity of persons. My aim is to explain why it does not. I shall first discuss what I regard as the task of political philosophy at the present time and then briefly survey how the basic intuitive ideas drawn upon in justice as fairness are combined into a political conception of justice for a constitutional democracy. Doing this will bring out how and why this conception of justice avoids certain philosophical and metaphysical claims. Briefly, the idea is that in a constitutional democracy the public conception of justice should be, so far as possible, independent of controversial philosophical and religious doctrines. Thus, to formulate such a conception, we apply the principle of toleration to philosophy itself: the public conception of justice is to be political, not metaphysical. Hence the title.
The 1994 Special Research Forum on Intra- and Interorganizational Cooperation is dedicated to the proposition that issues of cooperation are fundamental to management success and of increasing importance in today's complex business world. After briefly reviewing the domain of cooperation, we use the content of the articles submitted for this special issue as a sample of current questions and research on cooperation and examine these studies relative to the domain. After introducing the work published here, we identify a set of questions pertinent to future research on cooperation.
Transaction cost theorists have generally neglected to consider the implications that the invisible hand of the market mechanism can have for the risk of opportunism. In the long run, the invisible hand deletes actors whose behaviors are habitually opportunistic. Consequently, as markets move toward the state of competitive equilibrium, the risk of opportunism will be low, even for transactions supported by specific asset investments. Therefore, in many contexts the transaction cost rationale for internalization has been overstated.
We analyze the organization of keiretsu networks in the Japanese economy using data on the top 50 financial firms and 200 industrial corporations. Control relations between pairs of firms are modeled as a function of bilateral exchange relations and other firm- and dyad-level covariates in accordance with resource dependence and transaction cost theory. Firms with financial and commercial connections develop quasi-administrative ties through cross-shareholding and director transfers. Keiretsu networks have two sides: (1) horizontal relationships of mutual support and defense among large, established firms as indicated by reciprocity of control and exchange, homophily among "big-six" affiliates, and symmetry in the effects of purchase/supply transactions on control; (2) vertical structures of asymmetric exchange and control between financial firms and industrial firms, large firms and small firms, and "big-six" firms versus independent companies.
Interpersonal trust is an aspect of close relationships which has been virtually ignored in social scientific research despite its importance as perceived by intimate partners and several family theorists. This article describes the development, validation, and correlates of the Dyadic Trust Scale, a tool designed for such research. It is unidimensional, reliable, relatively free from response biases, and purposely designed to be consistent with conceptualizations of trust from various perspectives. Dyadic trust proved to be associated with love and with intimacy of self-disclosure, especially for longer married partners. It varied by level of commitment, being lowest for ex-partners and highest for those engaged and living together, for newlyweds, and for those married over 20 years. Partners reciprocated trust more than either love or depth of self-disclosure. Future research could fruitfully relate dyadic trust to such issues as personal growth in relationships, resolving interpersonal conflict, and developing close relationships subsequent to separation or divorce.
The manner in which the concept of reciprocity is implicated in functional theory is explored, enabling a reanalysis of the concepts of "survival" and "exploitation." The need to distinguish between the concepts of complementarity and reciprocity is stressed. Distinctions are also drawn between (1) reciprocity as a pattern of mutually contingent exchange of gratifications, (2) the existential or folk belief in reciprocity, and (3) the generalized moral norm of reciprocity. Reciprocity as a moral norm is analyzed; it is hypothesized that it is one of the universal "principal components" of moral codes. As Westermarck states, "To requite a benefit, or to be grateful to him who bestows it, is probably everywhere, at least under certain circumstances, regarded as a duty. This is a subject which in the present connection calls for special consideration." Ways in which the norm of reciprocity is implicated in the maintenance of stable social systems are examined.
With the publication of his best-selling books "Competitive Strategy (1980) and "Competitive Advantage (1985), Michael E. Porter of the Harvard Business School established himself as the world's leading authority on competitive advantage. Now, at a time when economic performance rather than military might will be the index of national strength, Porter builds on the seminal ideas of his earlier works to explore what makes a nation's firms and industries competitive in global markets and propels a whole nation's economy. In so doing, he presents a brilliant new paradigm which, in addition to its practical applications, may well supplant the 200-year-old concept of "comparative advantage" in economic analysis of international competitiveness. To write this important new work, Porter and his associates conducted in-country research in ten leading nations, closely studying the patterns of industry success as well as the company strategies and national policies that achieved it. The nations are Britain, Denmark, Germany, Italy, Japan, Korea, Singapore, Sweden, Switzerland, and the United States. The three leading industrial powers are included, as well as other nations intentionally varied in size, government policy toward industry, social philosophy, and geography. Porter's research identifies the fundamental determinants of national competitive advantage in an industry, and how they work together as a system. He explains the important phenomenon of "clustering," in which related groups of successful firms and industries emerge in one nation to gain leading positions in the world market. Among the over 100 industries examined are the German chemical and printing industries, Swisstextile equipment and pharmaceuticals, Swedish mining equipment and truck manufacturing, Italian fabric and home appliances, and American computer software and movies. Building on his theory of national advantage in industries and clusters, Porter identifies the stages of competitive development through which entire national economies advance and decline. Porter's finding are rich in implications for both firms and governments. He describes how a company can tap and extend its nation's advantages in international competition. He provides a blueprint for government policy to enhance national competitive advantage and also outlines the agendas in the years ahead for the nations studied. This is a work which will become the standard for all further discussions of global competition and the sources of the new wealth of nations.
This study of automotive transaction relationships in the U.S.A. and Japan offers data which
indicate that transaction costs do not necessarily increase with an increase in relationship-specific
investments. We empirically examine the conditions under which transactors can simultaneously
achieve the twin benefits of high asset specificity and low transaction costs. This is possible
because the different safeguards which can be employed to control opportunism have different
set-up costs and result in different transaction costs over different time horizons. We examine
in detail the practices of Japanese firms which result in effective interfirm collaboration.
Three types of trust in economic exchanges are identified: weak form trust, semi-strong form trust, and strong form trust. It is shown that weak form trust can only be a source of competitive advantage when competitors invest in unnecessary and expensive governance mechanisms. Semi-strong form trust can be a source of competitive advantage when competitors have differential exchange governance skills and abilities, and when these skills and abilities are costly to imitate. The conditions under which strong form trust can be a source of competitive advantage are also identified. Implications of this analysis for theoretical and empirical work in strategic management are discussed.
Japan’s economic success since World War II has been striking. Modern Japan was the first major industrial economy to emerge from outside the Western tradition. Economically devastated in 1945, by 1990 Japan had the world’s second largest economy and a GDP per head 20 percent greater than that of the United States. In this paper it is argued that one reason for Japan’s success is that the costs of achieving cooperation and specialization are lower in Japan than in the West. Cooperation and specialization have been acknowledged to have a beneficial impact upon productivity ever since Adam Smith wrote about cooperative specialization in the context of the division of labor. Modern economic theory, however, suggest that in a world of self-interested individuals the costs of achieving cooperation and specialization are substantial. In this paper it is argued that the cultural value system that Japan has inherited from its preindustrial past, and particularly the Tokugawa period, helps facilitate cooperation between individuals and encourages them to undertake productivity-enhancing investments in specialization. This lowers the costs of achieving cooperative specialization. In turn, the lower costs of achieving cooperative specialization have helped Japanese enterprises adopt practices such as self-managing work teams and long-term supplier relations that are consistent with obtaining a productivity-based competitive advantage in the world economy.
This empirical study suggests that Japanese competitive advantage in complex-product industries is at least partly due to differences in value chain governance and interfirm asset co-specialization. Comparative data are offered which indicate that U.S. firms rely largely on markets and hierarchies to facilitate exchange, whereas Japanese firms rely largely on "hybrid" governance or alliances. The empirical findings suggest that Japanese automotive firms (value chains) have been able to achieve a competitive advantage over their U.S. counterparts by effectively using hybrid/alliance governance for three primary reasons: (1) Japanese automotive value chains are characterized by greater interfirm asset co-specialization than U.S. chains. In particular, greater human asset co-specialization between firms results in superior coordination, information sharing, and learning which is critical in complex-product industries, (2) hybrids/alliances as employed by Japanese automakers realize virtually all of the advantages of hierarchy (e.g., asset co-specialization) without the disadvantages (e.g., loss of market discipline, loss of flexibility, higher labor costs), and (3) Japanese automotive value chains incur lower transaction costs than U.S. value chains. Thus, alliances, as structured in Japan, simultaneously realize the benefits of decentralization and competition without sacrificing economies of scale, coordination, or co-specialization of assets. These findings support transaction cost theories which suggest that effectively aligning governance structures with transactions will result in efficiency advantages. However, inconsistent with extant transaction cost theory, findings from this study suggest that: (1) hybrid governance may be more efficient than hierarchical governance under conditions of uncertainty, and (2) transaction costs do not necessarily increase with an increase in asset specificity.
This article focuses on the predominance of obligated relational contracting in Japanese business. Consumer goods markets are highly competitive in Japan, but trade in intermediates, by contrast, is for the most part conducted within long-term trading relations in which goodwill give-and-take is expected to temper the pursuit of self-interest. Cultural preferences explain the unusual predominance of these relations in Japan, but they are in fact more common in Western economies than textbooks usually recognize. The growth of relational contracting in labour markets especially is, indeed, at the root of the rigidities supposedly responsible for contemporary stagflation. Japan shows that to sweep away these rigidities and give markets back their pristine vigor is not the only prescription for a cure of stagflation. The Japanese economy more than adequately compensates for the loss of allocative efficiency by achieving high levels of other kinds of efficiency. Relational contracts are just a way of trading off the short term loss involved in sacrificing a price advantage, against the insurance. As for relational contracting between enterprises, there are three things to be said. First, the relative security of such relations encourages investment in supplying firms. Second, the relationships of trust and mutual dependency make more for a rapid flow of information. Third, a by-product of the system is a general emphasis on quality.
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The authors develop a theoretical extension to the basic transaction cost model by combining insights from dependence theory with the TCA approach. They introduce offsetting investments as a means of safeguarding the specific assets of small firms in conventional channels. The traditional TCA safeguards are insufficient here, because vertical integration is not feasible for the small firm at risk and long-term contractual protection is not present in conventional channels. Data from 199 manufacturers' agencies support the theoretical predictions. Agencies with more specific assets invested in their relationship with a principal attempted to bond themselves more closely to their accounts to safeguard those assets. Such bonding efforts resulted in a lower level of dependence on the principal because the agencies were better able to replace the principal if necessary. Also, their financial performance was improved when dependence was reduced, provided levels of specific investments were relatively high.
A model of distributor firm and manufacturer firm working partnerships is presented and is assessed empirically on a sample of distributor firms and a sample of manufacturer firms. A multiple-informant research method is employed. Support is found for a number of the hypothesized construct relations and, in both manufacturer firm and distributor firm models, for the respecification of cooperation as an antecedent rather than a consequence of trust. Some implications for marketing practice are discussed briefly.
Maintaining robust cooperation in interfirm strategic alliances poses special problems. Such relationships have received growing attention in recent research grounded in game theory, which has suggested that some alliance structures are inherently more likely than others to be associated with high opportunity to cheat, high behavioral uncertainty, and poor stability, longevity, and performance. The present study merged these theoretical insights with the logic of transaction cost economics in a general model of alliance structuring and tested it with data from ill interfirm alliances. Findings generally supported the model and hypotheses, suggesting the need for a greater focus on game theoretic structural dimensions and institutional responses to perceived opportunism in the study of voluntary interfirm cooperation.
Ten conditions of trust were suggested by 84 interviews of managers, and two previous studies of managerial trust. Statements made in the interviews and the studies were used to develop a content theory of trust conditions and derive scales measuring them. The scales were generated with an iterative procedure using a total of 1531 management students. The scales were assessed for homogeneity, reliability, and validity with several samples: 180 managers and 173 of their subordinates, 111 machine operators, and four different samples of management students (n = 380, n = 129, n = 290, and n = 132). Construct validity was supported by showing that the scale measures behaved as hypothesized with respect to measures of other variables, a manipulation of expectations, and the reciprocity of trust in vertical dyads.