22-10-2016, 10:37 AM
Reputation, trust and suppliercommitment: the case of shipping company/seaport
relations
1460446415-trust2.pdf (Size: 326.94 KB / Downloads: 6)
Abstract Relationships between a supplier's corporate reputation, trust in the supplier,
co-operation, buyer commitment, and willingness to undertake relationship-specific
investments were examined in the context of interactions between three UK seaports and
a sample of 144 of their customer shipping firms. It emerged that the model proposed by
the International Marketing and Purchasing Group performed well as a predictor of
supplier/purchaser relationships within this sector. Seaports' corporate reputations (as
measured by the Fortune reputation index) significantly affected shippers' desires for
close relationships with particular ports, and acted as a quasi-moderator of the impact of
supplier trust on closeness. Reputation, moreover, constituted a pure moderator vis-aÁ-vis
the influences of trust on commitment and on relationship-specific investments and
adaptations of business systems. Additionally reputation modified the effects of
experience (i.e. the period for which a shipper had been doing business with a specific
port) on trust.
Introduction
This paper examines the role of corporate reputation as an antecedent of
buyer-seller closeness, buyer commitment and relationship-specific
adaptations of business systems and equipment in the context of the model
developed by the International Marketing and Purchasing Group (IMPG)
(see Turnbull et al. (1996) for a review of studies conducted by the IMPG
and other interested parties). According to the IMPG, industrial buyer-seller
partnerships commonly undergo an evolutionary process wherein the
partners learn from experience, resolve uncertainties, become closer, and
eventually commit themselves to a long-term relationship (Turnbull, 1990).
Thereafter, each side consciously attempts to benefit from the other's
resources and capabilities. Examples of the processes through which the
latter might occur include the exchange of important technical and
commercial information, joint problem solving, and the development of
personal contacts between executives in the partner firms. Eventually each
company becomes willing to adapt to the other's needs, even to the extent
that equipment and procedures are modified to suit the requirements of the
other party (Nielson, 1998).
``Closeness'' of this nature allegedly enhances the stability, predictability
and longevity of relationships, so that ``customers are often reluctant to
change their sources of supply and . . . there is a surprising degree of stability
and durability in dealings with suppliers'' (Turnbull et al., 1996, p. 44).
Further reasons for close and long-lasting relationships could include risk
aversion, high switching costs, source loyalty, and ``market concentration
resulting in a few powerful players'' (Turnbull et al., 1996, p. 44). Also, it is
frequently the case that a very small number of people in the buying and
supplying firms are actually involved in a transaction. These individuals
interact and build up confidential, complex and enduring relationships.
Hence, norms of behaviour emerge and a certain ``atmosphere'' surrounds
negotiations, meetings, and other communications. ``Commitment'' in this
model refers to the belief that a relationship will continue into the future
(Nielson, 1998). It can be measured both in terms of an intention to continue
the relationship and a willingness to make relationship-specific investments
in it (Pels, 1992). A relationship-specific asset is an adaptation of a product,
plant, piece of equipment or operating procedure that is in some way
dedicated to the partner and which cannot easily be redeployed. High ``asset
specificity''
(i.e. the situation where an asset cannot be put to alternative uses) creates
long-term bilateral interdependence: firms become ``locked into'' a
relationship.