Justice served: Mitigating damaged trust stemming from supply chain disruptions

Abstract

This research examines the mitigation of damaged trust stemming from supplier-induced disruptions. We used the critical incident technique on 302 buying firms in China to capture two (one successful, one unsuccessful) supplier-induced disruptions (yielding a total of 604 incidents) to test our theorizing grounded in justice theory. We find evidence that different aspects of trust damage (ability, benevolence, and integrity) can be mitigated through the supplier's selective use of appropriate justice approaches (procedural, interactional, or distributive justice), which, in turn, foster relationship continuity intentions. Within this realm, we make a number of contributions. First, we find that procedural justice is the most effective mechanism (followed by distributive justice and interactional justice) to recoup the damage to buyers’ trust in the suppliers’ ability, benevolence, and integrity. Second, we find that mitigating damaged ability is the most powerful precursor (followed by recuperating damaged integrity) for locking in future business. Conversely, the mitigation of damaged benevolence is not found to affect future business intentions. Third, our post hoc results suggest that disruptions and consequent mitigation efforts pose relational threats as well as opportunities—yet the “double-edged” nature is affected by the “base” level of trust (i.e., the trust level prior to the disruption). Broadly, our study suggests that suppliers can overcome the negative relational repercussions of disruptions (that they caused) by employing well-developed, but nuanced, mitigation efforts and, in doing so, repair, solidify or even enhance the relationships.