When do formal control and trust matter? A context-based analysis of the effects on marketing channel relationships in China

Formal control and trust are two typical governance mechanisms employed to safeguard business transactions. Yet the effectiveness of each mechanism for firm relationship outcomes remains unclear. Some relevant literature suggests that formal control and trust simultaneously can help secure transactions, whereas other research argues the two control mechanisms can substitute for each other. This study applies social embeddedness theory and differentiates strong tie from weak tie relationships. In so doing, it reveals the role of strong versus weak social ties in leading to parallel conclusions about the relationship between formal control and trust and their effects on relationship outcomes. On the basis of empirical tests in a Chinese marketing channels context, this study finds that the joint effects of formal control and trust on governing transactions depends on the relational tie that the focal partners share. Specifically, formal control and trust complement each other only in weak tie relations. On the basis of this new perspective, the authors offer theoretical and managerial implications for managing interfirm governance mechanisms in transitional economies such as China.     

Using influence strategies to advance supplier delivery flexibility: The moderating roles of trust and shared vision

This study explores trust and shared vision moderate the relationship between the manufacturer's influence strategies and supplier delivery flexibility. The major components of this study are based on reviews of marketing research that focus on influence strategies and literature regarding supply chain flexibility. The results show that the request strategy has a negative effect on supplier delivery flexibility. The model predicts that trust and shared vision have an asymmetrical effect across recommendations, information exchange, and promises influence strategies. When the relationship contains a highly shared vision, a manufacturer's use of the recommendation influence strongly promotes supplier delivery flexibility, whereas the use of a promise strategy depresses supplier delivery flexibility. In contrast, an information exchange strategy will have a negative effect, but the promise strategy will have a positive effect on supplier delivery flexibility when trust is high. This paper contributes to guidelines for management on how to align their suppliers for delivery flexibility to respond quickly to customer demands.     

Power symmetry and the development of trust in interdependent relationships: The mediating role of goal congruence

Power in business-to-business relationships has been a core theme in industrial marketing research. However, diverging approaches have been used to study power resulting in inconsistent empirical findings. In this paper we explore the complexities of establishing, nurturing and sustaining cooperative relations, investigating the interplay between power symmetry, trust and goal congruence. We draw on the narrative approach in research to understand interorganizational relationships as shared meanings and how these evolve over time. We study two cases where organizations seek to achieve seamless interorganizational relationships but find themselves engaged in rather antagonistic or unpredictable positions. We show how goal congruence mediates the relationship between power symmetry or asymmetry, and the respective development of trust within organizational structures, processes and formal roles. We make a contribution to business-to-business marketing literature by showing that goal congruence becomes a prerequisite for the development of trust, irrespective of whether symmetrical power dependence predominates. We discuss how this novel insight may inform the strategies for developing interorganizational relationship in practice.     

The changing importance of affective trust and cognitive trust across the relationship lifecycle: A study of business-to-business relationships

The purpose of this paper is to examine affective trust and cognitive trust and their effects on business relationship outcomes. Within a relationship marketing framework, the influence of affective trust and cognitive trust on the success of business relationships at the early and mature phases of the relationship lifecycle is examined. Both affective and cognitive forms of trust are demonstrated to be multidimensional constructs that indirectly influence relationship performance via the mediating variables commitment and liking.The development and use of five elements of trust to explain relationship performance extends existing understanding of relationship marketing. By combining five elements of trust (three cognitive and two affective) and testing them in two different relationship lifecycle phases, insights are generated into how a relationship can succeed. The model tested in this paper highlights the importance of affective trust in the early phase and cognitive trust in the mature phase of the relationship lifecycle. Further, the mediating roles of commitment and liking between trust and relationship performance are also developed. Hence, the research increases understanding of how relationships evolve, in particular the role of affective trust and cognitive trust in influencing relationship performance.The context of this research is business-to-business relationships in small and medium enterprises. A survey of 458 businesses people is used to evaluate both the early and mature relationship lifecycle phases. The data are analysed with structural equation modelling where the basic structural model testing is extended with multigroup analysis.     

Managing supplier-retailer relationships: From institutional and task environment perspectives

This study develops an integrated model of managing channel relationships that involves task and institutional environment perspectives. Using survey data from automobile dealers in China, the authors provide empirical evidence to demonstrate the utility of the legitimacy-based institutional environment perspective in clarifying channel relationship issues, which have been considered mostly only from an economic efficiency-based task environment approach. As the institutional environment perspective's factors, imposition asymmetry and bypassing have indirect impacts on trust in supplier and the level of conflict in a channel relationship. As the task environment standpoint's factors, explicit contracts and supplier's transaction-specific investments (TSIs) are posited to have direct effects on trust in supplier and the level of conflict, however, the hypothesized relationship between supplier's TSIs and the level of conflict is not supported. The results also indicate both building a retailer's trust in its supplier and lowering the level of conflict lead to improved relationship performance.     

Marketing strategy and the efficacy of procedural justice: The mid-level marketing manager in industrial service firms

A principal challenge confronting the senior marketing team in B2B firms is how to ensure that the marketing strategies they develop are implemented effectively. The literature indicates that mid-level marketing managers' perceptions of the procedural justice within the firm may be critical in this respect. However, there has been little empirical research on this issue. The authors develop and test a conceptual model of the key drivers and consequences of marketing managers' procedural justice perceptions. The findings show that if mid-level marketing managers trust their senior marketing colleagues and simultaneously operate within moderately organic structures, then procedural justice will thrive. A consequence of this is more effective implementation of marketing strategy which, in turn, leads to increased market performance.     

Exploring the impact of trust and relational embeddedness in e-marketplaces: An empirical study in Taiwan

B2B transaction is a rapid growth section within e-commerce. However, despite the increase in the number of B2B transactions, only a few e-marketplaces have successfully attracted a large number of buyers and sellers. The purpose of this study is to investigate the underpinning forces that influence the organizational decision to adopt e-marketplaces and to improve competitiveness through continuous participation in e-marketplaces. This study applies the technology acceptance model, relational embeddedness, and the trust theory to explore the impact of perceived ease of use, perceived usefulness, and relational embeddedness on trust associated with e-marketplace providers. This study further tests the impact of relational embeddedness and trust on relationship performance in the context of e-marketplaces. Based on 284 active buyers and sellers in well-known public e-marketplaces, the empirical findings suggest that perceived ease of use positively influences perceived usefulness of e-marketplaces; perceived ease of use influences user trust of e-marketplaces via perceived usefulness; and relational embeddedness leads to enhanced trust in e-marketplace providers, which subsequently leads to better relationship performance. Both relational embeddedness and trust also influence relationship performance directly. This research reveals the importance of perceived usefulness and relational embeddedness on trust associated with e-marketplace providers.     

The impact of trust and contract on innovation performance: The moderating role of environmental uncertainty

Research into two important control mechanisms for managing the supply chain relationship - contracts and trust - is on the rise. However, our understanding of how they influence innovation in a firm remains rather unclear. Thus, the primary objective of this study is to examine the individual and interactive effects of contracts and trust on firms' innovation performance and the contingent effects of environmental uncertainty on those relationships in China. The empirical results from a survey of Chinese manufacturing firms indicate that there is a positive relationship between trust and firms' innovation performance, an inverted U-shaped relationship between the use of contracts and firms' innovation performance, and that contracts and trust are substitutes. Moreover, we find that environmental uncertainty enhances the effects of trust, but does not influence the impact of contracts on innovation performance.     

Adding co-creation as an antecedent condition leading to trust in business-to-business relationships

Trust enjoys wide acceptance among scholars as a key facilitator of inter-organisational relationship development, and successful relationship development demands an understanding of what drives the propensity to trust between organisations within both cognitive and affective dimensions of trust. The six most salient antecedents of trust within contemporary trust literature have been identified as satisfaction, communication, competence, shared values, benevolence and integrity. This research suggests that co-creation is also an important antecedent of trust in business-to-business relationships. Co-creation is described here as the active participation, interactions and collaboration of the buyer and seller and other actors in the marketing exchange to develop a deeper understanding of the customer problem solving context.The relative strength of the cognitive and affective aspects of trust antecedents, the moderating influence of business experience and seniority on the relationship between significant antecedents and trust is also explored. The analysis uses statistical tools and then probes deeper using fuzzy-set qualitative comparative analysis (fsQCA).     

Relationship keyness: The underlying concept for different forms of key relationship management

For companies, relationships with external actors may constitute intangible assets. Many firms have put in place key account management programs in order to pay sufficient attention to strategically important customers and the marketing literature has studied such programs. However, a company's relationship portfolio also comprises relationships with other types of actors. The objective of this paper is to show that - across the different types of external relationships a company may develop - some relationships have more importance than others and, hence, are key. The authors argue that, as a consequence, the keyness of certain relationships has led to the emergence of approaches which can be referred to as key relationship management. For this purpose, the authors first present empirical material on the management of relationships between companies and their partners in strategic alliances from the French IT sector. They then discuss the concept of keyness as well as the common characteristics of different forms of key relationship management such as key account management, key supplier management and strategic alliance management.     

The determinants of relational governance and performance: How to manage business relationships?

It is the aim of this study to assess the influence of the determinants of the transaction, dyadic, and business environment level on relational governance and ultimately performance. We build an integrated framework for relationship management drawing from literature of transaction cost economics, marketing channels, and business networks. Dutch suppliers of potted plant and flower products (N=174) provided data for the empirical analysis. Our results show that joint planning, one of the constructs of relational governance, is positively influenced by interorganizational trust, information obtained from the network, physical transaction-specific investments (TSIs), and by fixed lines as the exchange mode. Joint problem solving, the other construct of the governance, is solely influenced by the two dimensions of trust. These two constructs of relational governance effect positively our performance measures. Managers should consider carefully each of the determinants of relational governance for the management of a relationship. As shown in our study, the success is dependent on some of the determinants of the three analytical levels of our integrated framework.     

An investigation into commitment in non-Western industrial marketing relationships

This paper reports an investigation into the antecedents of commitment in non-Western industrial marketing relationships. The authors draw the antecedents from extant literature and posit that commitment is related to trust (integrity and reliability), communication quality, conflict, and similarity (social, ethnic, and economic). It is further argued that trust mediates the effects of communication, conflict, and similarity on commitment. As an extension, the authors examine the moderating effects of normative contracts (an implicit understanding of roles and responsibilities) on the construct interrelationships. The hypotheses are tested using data collected from approximately 150 industrial marketing relationships sampled from overseas Chinese firms. The results generally support the authors' framework; however, the mediating hypotheses are not supported. There is evidence of systematic differences in the effects of the studied antecedents on commitment and trust. Furthermore, a multigroup analysis provides evidence of significant moderating effects due to contracting mode. The study provides new insights into the theory and practice of industrial marketing.     

Customer identification: The missing link between relationship quality and supplier performance

Maintaining good relationship quality (RQ) with customers is crucial for supplier firms to remain competitive. Yet, empirical evidence linking RQ with supplier-firm performance remains inexplicably vague. Drawing on social identity theory and the relationship marketing literature, this study therefore examines the role of customer identification—a customer firm's sense of shared connection with a supplier organization—in bridging the gap between RQ and outcomes beneficial to the supplier firm. A study involving 389 CEOs and directors of Australian firms finds that customer identification mediates the effects of affective RQ-dimensions (i.e., benevolent trust and affective commitment) on customers' willingness-to-pay premium price (WTP) and positive word-of-mouth (WOM) behaviors. Further, the mediating effect of customer identification is moderated by organizational distance and supplier's relationship-specific investments (RSI), such that the indirect effects are stronger when the organizational distance between the supplier and customer firm is low and supplier's RSIs are high. Moreover, while cognitive RQ has direct effects on WTP, its influence on WOM is mediated by customer identification. By identifying the role of customer identification in facilitating the link between RQ and supplier-firm performance, our findings provide valuable insights for supplier firms to optimize their relationship marketing efforts.     

Is the theory of trust and commitment in marketing relationships incomplete?

Trust and commitment are central to the relational mediators model of relationship marketing. Extant research suggests that trust enhances commitment, as a trusted partner is so highly valued that a channel member will invest in the relationship and put forth efforts to maintain that relationship. This study re-examines the causality between trust and commitment by comparing alternative models across three datasets (including the seminal Morgan and Hunt 1994 data). The results indicate that while trust enhances commitment, commitment can also erode trust. Several viable, theoretically-driven explanations for this negative effect are discussed, and propositions are developed for future research.     

Measuring inter-organizational trust—a critical review of the empirical research in 1990-2003

This study reviews empirical research on inter-organizational trust. Since the early 1990s, researchers on inter-organizational relationships have consistently argued that mutual trust is an essential factor of relationship quality and performance. The purpose of the study was to evaluate the advancements and setbacks in current empirical research in terms of measuring inter-organizational trust. This paper analyzes the theoretical approach, the conceptualization and operationalization, and the measurement issues covered in studies on inter-organizational trust conducted from 1990 to 2003. Although trust has emerged as an important factor in inter-organizational relationships, there are still major conceptual and methodological challenges to be met in studying this complex concept. The results show major inconsistencies in conceptualization, operationalization, and measurement of trust. The paper concludes with suggestions for further empirical research.     

Conflict between engineers and marketers: the experience of German engineers

An effective interface between engineering and marketing is considered to be vital for the successful development and commercialization of new products. Studies in the US, Japan and the UK have, however, identified that conflict between engineers and marketers can act as a barrier to effective cooperation. This study aims to further our understanding in this important area by studying conflict between engineers and marketers, from the engineer's perspective, in German companies. This study has found that German engineers recognize the importance of trust, good understanding, common knowledge, integration and teamwork in building a good relationship with marketers. Although the levels of integration between the two functions and the quality of the relationship were found to be relatively low, so too was the level of perceived conflict. The main sources of conflict between German engineers and their marketing colleagues are differences in education and training and different goals and priorities. Both managers and educators of engineers and marketers need to understand how the differences in education and training influence the relationship, and to develop courses, which will help the two functions to become more sensitive to each other's needs.     

Improving Marketing's Contribution to New Product Development

In many firms, the marketing department plays a minor role in new product development (NPD). However, recent research demonstrates that marketing capabilities more strongly influence firm performance than other areas such as research and development. This finding underscores the importance of identifying relevant capabilities that can improve the position of marketing within the NPD process as part of the quest to improve innovation performance. However, thus far, it has remained unclear precisely how the marketing department can increase its influence on NPD to enhance a firm's innovation performance. The results of this study demonstrate that the relationship between marketing capabilities and innovation performance is generally mediated by the decision influence of marketing on NPD. In particular, both marketing research quality and the ability to translate customer needs into product characteristics serve to increase marketing's influence on NPD. This increased influence, in turn, positively contributes to overall firm innovation performance. Hence, these results show that in addition to having the appropriate marketing capabilities, the marketing department must achieve a status in which these capabilities can translate into performance implications.     

CEO transformational leadership and firm performance: A moderated mediation model of TMT trust climate and environmental dynamism

This study examines the role of top management team (TMT) trust climate in the relationship between CEO transformational leadership (TFL) and firm performance under dynamic environments. The research results based on a sample collected from firms in Vietnam show that TMT trust climate is a key mediator which can convert CEO TFL into better performance outcomes. Moderated-mediation analyses further reveal that the mediating effect of TMT trust climate is more significant in less dynamic environments. Our study contributes to the TFL theory by identifying a critical mechanism that intervenes in the relationship between CEO-level TFL and firm performance. We reveal how CEOs exert leadership influence on subsequent TMT dynamics and performance outcomes by navigating external environments. Moreover, our study offers insights with regard to the trust theory by uncovering TMT-level intragroup trust as a mediator, and thus complements most of prior examinations that focus on the moderating role of trust in workplace team contexts.     

Industrial relationships and the effects of different types of connections

Emphasizing the primary and secondary functions in business networks, this paper is based on the presumption that the primary function of the focal dyadic relationship is connected to business, political, ancillary and competitive relationships, i.e. what has been denoted as the secondary function. The question is how these secondary functions affect the primary function. The conceptual view developed for the focal dyadic relationship is founded on the two key relationship concepts of trust and commitment. The empirical study is based on a survey of 353 firms and their most important customer relationships. The analysis examines nine hypotheses through a structural model in LISREL. Conclusions from the statistical test show the heterogeneity in the impacts of these different types of connections on trust and commitment. Knowledge of the impact of these connections can aid the further understanding of relationship connections and also assist business firms in developing strategies towards these units.     

The role of supplier performance in building customer trust and loyalty: A cross-country examination

Building trust in buyer–seller relationships is a focal issue in relationship marketing. However, there are mixed results concerning the performance outcomes of trust. Also, no attention has been given to linking supplier performance aspects to the development of trusting relationships. In this study we propose a conceptual model of supplier performance drivers and customer loyalty consequences of trust in supplier–organizational customer relationships. We test the model relationships using data from three different countries, namely, France, Hungary, and the U.K., in an effort to assess the extent to which the development and outcomes of trust are consistent across different countries. The results suggest that supplier performance in product quality and sales service quality is conducive to trust building across all three countries. Supplier performance in technical repair service support enhances trust in the market contexts of France and Hungary, but has no significant effect in the case of the U.K. Nonetheless, supplier performance in complaint handling has a positive effect on trust in the U.K. and French contexts, but no link is established in the context of Hungary. Further, the results show that trust enhances customer loyalty across all countries. Moreover, we find that firm size negatively moderates the trust–loyalty relationship in all the countries, with this link being not significant among larger firms in France and Hungary. The results have important theoretical and practical implications for international relationship marketing.