Operationalizing Trust,Reliance, and Dependence in Business Relationships: Responding to the Ongoing Naming and Cross-Level Problems

Purpose: This article is to test the proposition that the 3 conceptually related constructs of trust, reliance, and dependence are distinct from each other and to test the proposition that the quality of business relationships can be measured with a formative index incorporating trust and reliance.

Methodology/Approach: The authors' propositions are tested with a survey sample of 221 firms in the U.K. construction industry. Exploratory and confirmatory factor analyses are used to analyze the survey data.

Findings: The independence of the 3 focal constructs of trust, reliance, and dependence is confirmed. The formative index is found suitable for evaluating the level of relationship quality in which reliance carries more significant weight than trust.

Research Implications: The separation of the overall construct of “trust” into trust at interpersonal level and reliance at interorganizational level, as found in this study, overcomes the problem existing in past studies that researchers rarely specify at which level trust operates. The clear conceptual distinction between reliance and dependence as found in this study implies that although both operate at the organizational level, they do not have overlapping boundaries. The finding that reliance is a more important impact factor than trust in constructing the formative index supports the notions that reliance is a necessary and sufficient condition for developing sustainable business relationships, and trust is an insufficient condition to sustain an ongoing business relationship.

Practical Implications: Reliance sets the keynote of the business relationship. In contrast, trust as the interpersonal variable only acts as the facilitator to create a favorable social environment. Nevertheless, both trust and reliance have a significant and positive weight in the relationship quality index formed. This means that a business relationship with high levels of both trust and reliance is particularly resilient and stable and is the most successful and desirable one which is frequently oriented toward the long run.

Originality/Value/Contribution: The confirmation of the difference between trust and reliance makes an important contribution to the study of trust in business to business marketing by showing that what has traditionally been treated as theoverall construct of trust can and should be regarded as being made up of two separate constructs: interpersonal trust and interorganizational reliance. The difference between reliance and dependence as an additional finding makes another important contribution by providing conceptual clarity of the two constructs and confirming that there is no overlapping boundary between them. The formative index and the relative importance of its components are another important contribution of this study.     

Trust as a Mediator of Channel Power

Abstract

Thriving longterm channel relationships require trust. Previous empirical work and metaanalysis have emphasized the central role of trust but its potential as a mediator of power has not been tested empirically. A model is proposed that hypothesizes a central, mediating effect for trust between power constructs (power asymmetry, coercive and noncoercive application of power) and key behavioral and attitudinal relationship outcomes (conflict, cooperation and satisfaction). The model is tested on a large sample (N = 887) in a single channel where there is a variable, but generally asymmetric, power relationship between principal and agent, as exists in many franchise and agency channels. Trust was not affected directly by the level of power asymmetry, but rather the way power was used, either coercively or noncoercively raised or lowered trust. Trust was found to mediate the impact of the way power is used on the agent's perception of cooperation, satisfaction, and conflict, emphasizing the pivotal role of trust in understanding the behavioral aspects of channel behavior.     

The Precursor Role of Cooperation,Coordination, and Relationship Assets in a Relationship Model

ABSTRACT

Purpose: The primary purpose of this study is to test the importance of activity-oriented precursors in a relationship model. This study supports the theoretical view that firms create trust and knowledge through activities and these activities make a commitment decision less risky (Johanson & Vahlne, 2009). The secondary purpose of this study is to collect and examine data from interorganizational relationships in both Sweden and the United States. By including data from two countries, results will be more generalizable. Results can also lead to several managerial implications.

Methodology/approach: This study focuses on a sample of distributors from both the United States and Sweden. One hundred sixty-one usable surveys were returned from the U.S. survey, for a response rate of 27%. One hundred twenty-four usable surveys were returned from the Swedish survey, for a response rate of 21%. The PLS-SEM method was used to examine the model’s constructs.

Findings: Similar to past research results show that trust and commitment have a direct positive influence on satisfaction, and that trust also has a direct positive influence on commitment. However, this study uniquely supports four out of six newly tested hypotheses. Both cooperation and relationship assets have a direct positive influence on commitment. Cooperation has a direct positive influence on trust and commitment. Relationship assets have a direct negative influence on trust but a direct positive influence on commitment. Surprisingly, two hypotheses were not supported: Coordination did not have a significant relationship with either trust or commitment.

Research implications: Managers who want to achieve a satisfactory relationship based on trust and commitment need to prioritize their attention toward cooperation. They should also be aware that participation in joint activities (i.e., coordination and relationship investments) does not guarantee higher levels of trust or commitment in the relationship. It is the quality of the joint activities and the how dependent firms are on each other and not just participation in joint activities that are likely to create higher levels of trust or commitment. The quality of coordination and manageable levels of dependence may counteract the higher costs associated with joint activities compared to the costs associated with cooperation. Managers may be wise to not make major commitments to other firms unless high quality joint activities have created knowledge and trust between firms. Originality/value/contribution: The model adds the joint activity-oriented antecedents associated with collaboration which is essential to a successful relationship. Because of the high failure rate of collaboration may be due to cooperation and coordination failures and because these two constructs are underspecified in interorganizational research, this study is unique in examining activity-oriented antecedents in a trust/commitment model of relationship satisfaction in a cross-cultural context (i.e., with U.S. and Swedish samples).     

Commitment and Trust in Cross-National Channel Relationships

Abstract

Cross-national channel relationships are becoming increasingly important, so it is time for research in the channels literature to continue beyond a focus of channel relationships within a single country or channel design for market entry. The author presents a model of commitment in cross-national manufacturer-distributor relationshipsthat extends the commitment-trust theory of relationship marketing by incorporating four constructs conceptualized to represent the influence of a firm's current and prospective partners on the focal relationship: resource transferability-to partner; resource transferabil-ity-from partner; resource particularity-adaptation and resource particularity-consumption. Data collected from 143 U.S. manufacturers, 106 Mexican manufacturers, and 97 Mexican distributors show that the model generalizes across this national boundary. In particular, a similar influence of mutuality on trust and trust on commitment was observed for both manufacturers and distributors. The influence of resource transferability, particularity on the relationship, was also observed. The findings provide strong support for extending the commitment-trust theory to aid the study and management of cross-national channel relationships.     

Insights into Closeness of Relationship as Determinant of Trust Within Marketing Channels

Abstract

This article explores the role of closeness of relationship between channel members. Closeness is put forward as a genuine variable in channel relationships, as part of the processes that take place in marketing channel dyad interactions. Advances in theory of channel relationships are proposed by a deeper theoretical development of the concept “closeness of relationship” from a multidisciplinary approach by stressing its relevance and by proposing a definition of closeness of relationship. Several features and ideas about closeness are proposed, such as the link between closeness of relationship and type of marketing relationship. Content validity is assessed to distinguish closeness from related constructs before exploring and operationalizing such a concept. The relationship between closeness and trust is explored by proposing actions to increase trust and assessing it empirically. An exploratory research is performed in the Spanish computer sector, testing relationships between a set of closeness components and trust between channel members. Results show that there are two factors underlying the construct closeness: interdependence and communication. However, only communication variables are significantly related to trust. Several conclusions and research propositions relevant for marketing theory and practice are presented.     

A Chinese/American Comparison of the Universality of Trust as an Applied Conceptual Tool in Wholesaler Selection Decisions

Abstract

This study provided an assessment of the value of American measures of trust, as used for selecting wholesalers for the channel of distribution, in measuring trust in a foreign (Thai-Chinese) setting. The study provided evidence that American measures of trust may not have merit in other cultures, particularly those which exhibit important differences from that in the United States. Various moderating variables were analyzed in the study, as to their relationship to trust, in an international setting.     

Do ethics drive value co-creation on digital sharing economy platforms?

PurposeSharing economy is surging and so are the consumers’ ethical concerns regarding such platforms. The current study examines the antecedents of consumers’ intention to co-create value that include consumers’ ethical perceptions constructs (i.e. privacy, security, fulfillment/reliability, shared value, service recover, and non-deception) and relationship quality constructs (trust, satisfaction, commitment), focusing on the digital sharing economy platforms.MethodologySurvey method was applied to gather data from n=348 consumers at digital sharing economy platforms. Structural equation modelling technique through Amos version 24. was employed in order to further analyze the data.FindingsResults reveal that consumers’ ethical perceptions as a second order construct comprising of privacy, security, fulfillment/reliability, service recovery, and shared value does not influence consumers’ intention to co-create value. However, relationship quality as a second order construct including commitment trust and satisfaction influences consumers’ intention to co-create value. Furthermore, relationship quality serves as strong full mediator between consumers’ ethical perceptions and their intention to co-create value.OriginalityThe studies on drawing relationships between value co-creation and relationship quality constructs have been popular yet to the authors’ surprise; seldom any studies have been conducted in examining the role of ethical perceptions in the settings of digital sharing economy platforms. Therefore, the current study closes this gap.     

Determinants of Supplier Willingness to Invest in Supporting a Manufacturer's Line

Abstract

This study examines the significance of supplier's expectation of continuity of its relationship with a manufacturer, perception of manufacturer's reputation, trust in manufacturer's credibility, trust in manufacturer's benevolence, and dependence on manufacturer as determinants of its willingness to invest in supporting a manufacturer's line. Data collected from Malaysian and Korean auto suppliers indicate that expectation of continuity of relationship, manufacturer reputation, and trust in manufacturer's credibility are significant determinants of supplier willingness to invest, while supplier dependence and trust in manufacturer's benevolence are not.     

Theoretical perspectives of supplier–buyer long-term relationships in India

Purpose: The purposes of this study are to investigate changing Indian supplier–buyer relationships and to propose an effective conceptual model using theoretically developed constructs such as power, performance, satisfaction (economic and noneconomic), conflict (economic and noneconomic), trust, cooperation, switching cost, and commitment

Methodology/approach: This study is focused on supplier–buyer relationships among Indian companies in the processed/packaged (not fresh) food business. All of the measures for the constructs were developed for and empirically tested in previous studies. Confirmatory factor analysis and path analysis were used to test the conceptual model.

Findings: First, Indian suppliers’ power sources and performance significantly influence satisfaction and conflict. Second, satisfaction and conflict are significantly related to cooperation, trust, and switching cost. Third, cooperation and trust have a significant impact on commitment.

Research implication: One of the unique aspects of the study is to analyze the differential effects of satisfaction and conflict in India. Using dichotomized (economic and noneconomic) constructs, the ways in which Indian buyers’ economic satisfaction, noneconomic satisfaction, economic conflict, and noneconomic conflict are related to other relationship constructs (power sources, performance, cooperation, trust, switching costs, and commitment) are investigated.

Originality/value/contribution: For global companies, a key requirement for success is how to develop and sustain long-term relationships with local companies. This study suggests practical and information for successful marketing strategies to establish long-term supplier–buyer relationships in India.     

An alternative perspective on relationships,loyalty and future store choice

Abstract

The purpose of this research was to provide an alternative perspective for retailers to develop relationships and loyalty. This study suggests that traditional trust and commitment theories are somewhat imperfect in predicting future store choice. Through path modelling, we introduce two additional constructs of store functional loyalty and relationship worth. These constructs together with commitment are powerful predictors of future store choice. Furthermore, the study examines the antecedents of relationships, loyalty and future store choice. We conclude with new insights and practical suggestions for retailers to build relationships, loyalty and influence customers' future store choice.     

The Impact of Involvement,Perceived Moral Intensity,and Satisfaction upon Trust in Non-Profit Relational Contexts: Processes and Outcomes

ABSTRACT

This study applies the basic concepts of relationship marketing, including involvement, knowledge, moral intensity, satisfaction and trust in the non-profit environment, specifically in a university setting. These relational concepts are employed in the development of a relational model used in an exploratory investigation. Results indicate significant relationships between the constructs, emphasizing the importance of relationship management for non-profit and public sector entities. Results, managerial implications and research implications are included.     

Brand Loyalty Versus Store Loyalty: Consumers’ Role in Determining Dependence Structure of Supplier–Retailer Dyads

Purpose: This article aims to integrate consumers into a channel dependence framework and explores the influence of consumers’ brand loyalty and store loyalty on the dependence structure within the supplier–retailer relationship. It also examines effects of the dependence structure on perceived conflict.

Methodology/approach: The authors test the proposed triadic relationship model among department store, supplier, and consumer by collecting matched data from both retailers and consumers in a Chinese retailing channel of sports and leisure apparel. Polynomial regression in conjunction with a response surface analysis (RSA) approach is used to test the hypotheses.

Findings: The results indicate that consumers’ brand loyalty positively affects retailer’s dependence on supplier, while consumers’ store loyalty positively affects supplier’s dependence on retailer. In addition, the retailer’s dependence is higher when consumers’ brand loyalty is higher than store loyalty; the supplier’s dependence is higher when consumers’ store loyalty is higher than brand loyalty; and the retailer’s dependence increases with the increase of both consumers’ brand and store loyalty when consumers’ brand and store loyalty are equal. Moreover, supplier’s dependence has a negative linear effect on retailer’s perceived conflict, whereas retailer’s dependence has an inverted U-shape effect on perceived conflict. A retailer would perceive more conflict when the retailer is relatively more dependent on the supplier; but the symmetrical interdependence has no significant effect on retailer perceived conflict.

Research implications: Researchers are encouraged to explore channel behaviors from a network perspective. Consumers, in particular, should be included in research frameworks related to channel dependence and behaviors. Suggestions for further research on the effects of dependence on the conflict are also proposed.

Originality/value/contribution: This study goes beyond the dyadic paradigm by integrating consumers into the framework of the channel dependence structure. It develops and tests a mechanism of consumers’ brand and store loyalty influencing dependence structure within a supplier–retailer dyad. It also enriches the literature of channel conflict by exploring the effects of retailer and supplier unilateral dependence on retailer perceived conflict with RSA methods.

Practical implications: The article provides several insightful implications for managers in understanding and managing interdependence structure in business-to-business marketing, especially in supplier–retailer relationships.     

Effect of Customers' and Suppliers' Perceptions of the Market Orientation of Manufacturing Firms on Channel Relationships and Financial Performance

ABSTRACT

This study is designed to investigate the effect of customers' and suppliers' perceptions of the market orientation of manufacturing firms on customers' and suppliers' trust in, cooperative norms in, and satisfaction with the relationship with the manufacturing firm. The findings from a sample of 72 matched sets of suppliers, manufacturing firms and customers in industrial channels in the Netherlands reveal that the perceived market orientation of manufacturing firms engaged in channel partnerships has a positive influence on customers' and suppliers' levels of trust in, cooperative norms in, and satisfaction with the relationship. This study further investigates the effect of the customers' and suppliers' trust in, cooperative norms in, and satisfaction with the relationship on the financial performance of the manufacturing firm. The results reveal that customers' and suppliers' cooperative norms in the relationship positively influence the manufacturing firm's financial performance. Customer's and supplier's trust in and satisfaction with the relationship have no effect on the manufacturing firm's financial performance.     

When Does Relational Exchange Matters? Social Bond,Trust and Satisfaction

Purpose: The extant literature on business-to-business relationship has shown that trust, relationship duration, and social bond are the key drivers of relationship satisfaction. Notwithstanding, studies on the examination of when and why these variables translate into successful relationship are still scarce and need further exploration. This research investigates the conditions under which trust and social bonds influence satisfaction in a business-to-business relationship.

Design/methodology/approach: The data were collected from 159 footwear producers using a structured questionnaire. Four hypotheses were developed and tested using hierarchical multiple regression.

Findings: The authors found support for all hypotheses. Social bonds and longevity are crucial in enhancing supplier relationship satisfaction. Likewise, the role of social bonds in inducing supplier satisfaction heightens over time. However, the positive association between exchange partner trustworthiness and supplier satisfaction works well only in high degree of dependence situation.

Research limitations/implications: The study was based on the report on monadic data and cross-sectional design. Future research should adopt longitudinal design to overcome the shortcomings.

Theoretical implications: This study advances the social exchange theory (SET) by elucidating the condition in which social bonds and trust fail to produce relationship satisfaction. Social bonds fail to enhance relationship satisfaction at the beginning of the relationship. Moreover, trust alone cannot be good enough to boost relationship satisfaction in a lose dependence context.

Managerial implications: This study acclaimed a relationship-driven approach as the best choice for those firms who aspire to build a good relationship with their exchange partner. Managers should understand how and when to develop a strong social relationship with their trading partners, and recognize the situations in which to deal with honest and fair business partners in an exchange relationship.

Originality/Contribution: This is one of the very few studies, which have been conducted to investigate the conditions under which the relational variable influences satisfaction in a business-to-business relationships context. It expanded the boundary of the current literature as it investigated the moderating role of relationship duration and dependence in the relationship between relational constructs and relationship satisfaction.     

Effective Ethical Response

Abstract

Given the need to protect channel investments, including market share and brand equity, channel members have every reason to be certain that their activities are viewed as both ethical and socially responsible by channel stakeholders. On a landscape littered with ethical and social responsibility failures, perceptions of ethical behavior and socially responsible conduct are especially important to creating and maintaining the trust necessary to ensure long-term satisfying exchange relationships. Efficient Ethical Response (EER) uses tools from the study of ethical decision making and corporate social responsibility to efficiently help channel members conduct business so that their activities are far less likely to attract unfavorable attention and concern from channel stakeholders.     

Communication in Marketing Channels

Abstract

In terms of the political economy framework, Mohr, Fisher, and Nevin (1996) have shed light on the issue of how the internal economic structure and processes respectively moderate the effects of channel communication. However, the question of whether and how the internal sociopolitical structure and processes respectively moderate the effects of channel communication has not been empirically investigated. To complement Mohr, Fisher, and Nevin's (1996) work and address the above research question, this study examines how power structure (symmetrical or asymmetrical) and relationalism (relational versus discrete) respectively affect the marginaleffects of communication on trust and perceived performance in channels of distribution. It was found that power symmetry enhances the positive effects of communication, while relationalism undermines them. Theoretical and managerial implications were drawn from these findings.     

Marketing channel relationships in China: A review and integration with an institution-based perspective

Because marketing channel research is predominantly conducted in the Western world, marketing channel theories and practices may not be generalizable to Chinese markets. Despite the rapid growth of Chinese economies and their increasing importance to the global economy, our understanding of marketing channels in China is limited. This research reviews and integrates studies of marketing channels in the Chinese context. From an institution-based perspective, we develop a set of propositions focusing on issues such as guanxi, trust and dependence. We explore the impact of Chinese institutional environments (regulatory, normative and cultural) on marketing channels. Lastly, we offer suggestions to help firms adapt their channel operations to Chinese markets.     

Formation of Reputation in Business Markets

ABSTRACT

Purpose: This study adopts a relational perspective on reputation. We investigate how relationship characteristics impact a customer’s judgment of supplier reputation. We include characteristics at both the interfirm and interpersonal levels, and we additionally link these characteristics to interfirm trust in order to explore similarities and differences between reputation and interfirm trust.

Methodology/approach: A survey was conducted among firms in the Norwegian offshore oil and gas industry. We assessed the measurement model and tested the hypotheses by applying LISREL.

Findings: The results show that the customer’s dependence on the supplier, common knowledge, and interpersonal trust are positively related to reputation, while opportunism is negatively related to reputation. Reputation is positively linked to interfirm trust, and both reputation and interfirm trust impact the customer’s satisfaction with the supplier.

Research implications: This study sheds light on the role of relational mechanisms in reputation formation. It suggests that reputation primarily consists of cognitive components, while interfirm trust consists of more affective components. Reputation is an important factor in developing interfirm trust.

Practical implications: This study underscores the importance of a firm’s core relationships to customers for developing its reputation. Managers need to carefully develop their relationships to customers in such a way that these relationships are consistent with and confirm the reputation they want to build.

Originality/value: The study supports the view that relational characteristics play important roles in the formation of reputation in business markets.     

The Mediating Role of Communication in Interorganizational Channels

Abstract

The overall objective of this article is to examine the impact of interorganizational channel bureaucratic structure on boundary interpersonal trust. The authors present a model where the bureaucratic structure (viz., formalization, participation and centralization) influences interpersonal communication, which functions as a mediator determining the level of interpersonal trust in the supply chain. The authors conceptualize communication as a multidimensional construct, reflective of both instrumental and social communications. The empirical study, conducted in a farm equipment supply chain, indicates that formalization and participation facilitate whereas centralization inhibits communication, which in turn enhances interpersonal trust. Theoretical and managerial implications as well as directions for further research are discussed at the end of the paper.     

Multilevel trust in international marketing of healthcare services: A five-country comparative study

PurposeThis research aims to increase understanding on how multilevel trust is developed as well as how trust levels are interconnected and influence international marketing strategy for healthcare services.Design/Methodology/ApproachA comparative case study approach was applied with Elekta, a Swedish firm, operating in Brazil, the Philippines, China, Russia, and Hong Kong.FindingsThe research culminated in a multilevel trust (MLT) model comprised of three levels relating to individuals, company performance, and context.Research implications/limitationsThis study offers a context-based multilevel trust model from a process perspective focusing on healthcare. This model can be tested in other service sectors.Practical implicationsManagers should consider multilevel trust to boost relationships and achieve local acceptance.Originality/ValueThis research contributes to trust theory by constructing a context-based multilevel trust model for international healthcare marketing.