Trust in buyer‐supplier relationships

Abstract

PurposeDespite the extensive body of research on the relationship between trust and performance in a supply chain environment, the concepts and the relationship between them has not been fully understood. The purpose of this paper is to develop a model that links the antecedents of trust, trust itself and firm outcome success.Design/methodology/approachA questionnaire survey was conducted to gather the data for this study. Statistical analysis included factor analysis with reliability and validity tests, and partial least square of structural equation modeling.FindingsThe data suggest that trust is built principally through supplier centric traditional performance metrics such as delivery reliability and product quality conformance. However, contrary to the extant literature, the people oriented trust enablers (e.g. personnel exchange, interpersonal contacts) have no bearing on the establishment of trust.Research limitations/implicationsThe research limitation is the relatively small sample size. However, this study can be perceived as a directional one for further research.Practical implicationsThe results can be used by the managers to improve their understanding on the relationship with other parties in the supply chain.Originality/valueThe significant value of this research can be retained by buying firm managers. The results are particularly important for them to improve their understanding in how they allocate time and resources in managing their supply chains and partner firms.