International Buyer Research Articles

Untangling the trust–control nexus in international buyer–supplier exchange relationships: An investigation of the changing world regarding relationship length

Control and trust are the primary governance mechanisms buying organizations rely upon to organize and maintain their collaborative exchange relationships with foreign suppliers. But the question of how control and trust interrelate and should be pursued seems entangled and practical advice remains largely elusive. Based on empirical data on 212 recently- and long-established buyer-supplier exchange relationships in the textile industry, we test the relationship between three practices of interorganizational control (output, process, and normative controls), two dimensions of interorganizational trust (competence and goodwill trust), and relationship performance. Using structural equation modelling, we demonstrate the value of controls for building and validating trust to depend as much on the specific control practice deployed and dimension of trust observed, as on the temporal stage of the exchange relationship. Moreover, we reveal distinct performance effects of the different control practices and dimensions of trust. Herewith, this study allows for a comprehensive understanding of the trust-control nexus in collaborative exchange relationships between buyers and their foreign suppliers. Addressing managers, we reveal how normative controls can be used to build trust and promote performance at the start of the relationship, whereas output controls need time to reach their full potential. Process controls, in turn, are found to have adverse effects.

Contract Specificity, Contract Violation, and Relationship Performance in International Buyer–Supplier Relationships

This work examines contractual governance in international buyer–supplier relationships by investigating the linkages between contract specificity, contract violation, and relationship performance as well as the roles of contract monitoring and a country's institutional factors (i.e., country business risk and country globalization). The findings, based on a survey of international buyer–supplier relationships, provide new insights into a contract specificity → contract violation → relationship performance model. For example, the results indicate that contract specificity is not directly related to contract violation but, rather, that country-level factors moderate the effectiveness of contract specificity (i.e., contract specificity is more effective in suppressing an international buyer's contract violation if the buyer is from a country characterized by low business risk or high country globalization). The results also demonstrate that contract monitoring can mitigate the negative association between contract violation and relationship performance.

Kathy Douglas, RN, MHA

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Cross-Sectional Pilot Study to Monitor the Availability, Dispensed Prices, and Affordability of Opioids Around the Globe

ContextOpioids are essential medicines. The World Health Organization and Health Action International monitor the price of essential medicines. However, their surveys do not include opioids, and there is no information on their affordability. ObjectivesTo provide information on access to pain treatment, as measured by the availability and dispensed price of five opioids in 13 formulations, and the affordability of oral immediate-release (IR) morphine. MethodsThe International Association for Hospice and Palliative Care members were distributed by their countries' Gross National Income (GNI) level using the World Bank categories, i.e., high income country (HIC), upper middle income country (UMIC), lower middle income country (LMIC), low income country (LIC), and randomized. A total of 10 participants were selected from each (n=40) domain. Participants were asked to identify a pharmacy located closest to a public facility that provides diagnosis/treatment for life-threatening conditions and report the lowest dispensed price of the smallest selling unit and strength of each formulation. Availability and median (Me) price were calculated for each. Affordability and percentage of international buyer price (IBP) were calculated for morphine oral solid IR. ResultsA total of 30 participants from 26 countries (response rate=75%) responded. Significant correlation was found between availability and GNI (range: 65–68% [HIC and LIC]; R=0.781; P<0.0001). Injectable and morphine oral solid sustained release (SR) were the most available (59% and 55%). Methadone (oral) was the least expensive (Me=0.5) followed by fentanyl (transdermal; Me=2.2). The Me price for morphine oral solid IR and ratios between dispensed and IBP were lower in HIC than in LMIC (price=0.03 vs. 0.16; ratio=2.23 vs. 0.03). Affordability for morphine oral solid IR was five days (Me=0.1; range=29–0.25). ConclusionPatients in LMIC and LIC have limited access to opioids, and there are subsidies in place for more expensive medications and formulations in all GNI levels, but not for morphine oral solid IR. Additional research is necessary to identify the reasons behind these findings.

Bangladesh: A Labor Paradox

Bangladesh: A Labor Paradox

International buyer behaviour–commitment relationship: An investigation of the empirical link in importing

Drawing on the resource-based view (RBV) of the firm this article examines relationships between knowledge, trust, communication, volatility and sustainable competitive advantage as the exogenous and endogenous variables with importer commitment as the dependent variable. The primary data was gathered from a survey of 224 commercial and industrial firms, headquartered in Bangladesh, coming from a wide cross section of industries. Statistical analysis was carried out using Structural Equation Modelling via AMOS. The study's key findings revealed that all exogenous/endogenous variables had a significant impact on importer commitment. That is, knowledge, trust, communication, volatility and sustainable competitive advantage had a significant direct impact on importer commitment. Additionally, cultural similarity, communication, volatility and supplier opportunism all had a significant indirect impact on importer commitment. This finding makes a significant contribution to the relational side of the RBV.

The Dynamics and Governance of Tongxiang Sweater Cluster Based on GVC

Tongxiang sweater cluster is considered as a dichotomy driven fashion value chain, for it is driven by, not only the local own brand, but also the international brand buyer. Every link of Tongxiang sweater cluster value chain is analyzed in this paper. Buyer only needs monitoring the supplier which produces some standardization of sweater, because sweater is a kind of standardization of product. The governance of global value chain consists of markets, relational value chains, captive value chains, hierarchy, and the last, modular value chains, to which Tongxiang sweater cluster belongs.

Transaction Cost Economics in International Marketing: A Review and Suggestions for the Future

Transaction cost economics (TCE) has received much attention in the international marketing literature over the past 25 years. Many key issues in international marketing have been examined through the lens of TCE, including entry mode choice, the governance of international distribution channels, propensity to franchise, international pricing control, and the governance of international buyer–supplier relationships. The author presents a review and analysis of 43 empirical TCE international marketing studies from 1987 to the present day. The results from this review and analysis indicate that the extant international marketing TCE studies demonstrate some support for the TCE propositions. In addition to these findings, the author also notes some key measurement issues, issues involving the dominance of U.S.-based studies, and some data equivalence issues. He builds on the results of the analysis to lay out important future research directions in the TCE international marketing domain.

Governance mechanisms in domestic and international buyer–supplier relationships: An empirical study

Governance mechanisms are a key element of business relationships. However, little is known about the possible differences between their uses in domestic versus international business relationships. Drawing on empirical data, we investigate three issues. First, we compare the use of five governance mechanisms (contracts, value-creating norms, value-claiming norms, specific investments, and trust) in purely domestic relationships as opposed to relationships with an international component. We also investigate whether customer satisfaction and commitment differ in these two settings. Second, we extend the model of Palmatier, Dant, and Grewal (2007) by adding two distinct types of governance norms—value-claiming norms and value-creating norms—and analyze the interrelationship between the five governance mechanisms as well as their impacts on business customer satisfaction and commitment. Finally, we analyze the moderating role of internationality on relationships between governance mechanisms and customer commitment. Data from a survey of 296 companies support most of the hypothesized relationships.

Textile Dyeing Industries in Bangladesh for Sustainable Development

The textile dyeing and washing industry plays an important role in the economical growth as well as the environmental sectors of Bangladesh. The textile dyeing industries has been condemned as being one of the world's most offenders in terms of pollution. There are many dyeing industries in Bangladesh which are mainly located at Gazipur and Narayanganj industrial area. This study was aimed at the dyeing industries to assess the present situation of environmental impacts arising from the activities of dyeing industries in Bangladesh. This was done by analyzing numerous data obtained from different laboratory test concerning a range of water quality parameters of Bangladesh. Important water quality parameters like pH, turbidity, TSS, BOD, COD and presence of metals were measured by testing samples. The samples were collected from effluent water of a renowned and international buyer recognized industry named UNIQUE Washing and Dyeing industry Limited in Gazipur. The results show that all the water quality parameters are within the permissible limits. Though the water test report shows no vulnerable change in water quality for this particular industry, but the overall EIA report shows the highest negative impact on physico-ecological environment. The human interest related factors make the total EIV positive.

Drivers and outcomes of importer adaptation in international buyer–seller relationships

Notwithstanding the growing literature on international buyer–seller relationships, limited attention has been given to the crucial role of adaptation in enhancing relationship performance, especially from the standpoint of the importer. This article reports the findings of a study, conducted among 167 British importers, focusing on the factors that drive their adaptation in the working relationship with Western European or U.S. export manufacturers, as well as its resulting performance outcomes. It was revealed that trust positively affects commitment and cooperation, while communication positively influences cooperation but has no effect on commitment. Both commitment and cooperation subsequently lead to importer adaptation. It was also found that adaptive importers tend to be more conducive to effective and efficient relationship outcomes. Finally, the study confirmed that both the links between adaptation and relationship effectiveness and adaptation and relationship efficiency are moderated by both the level of dependence on and distance from the exporter.

Formal control and social control in domestic and international buyer–supplier relationships

Focusing on long-term buyer–supplier relationships, this article addresses two questions: (1) What are the antecedents that lead to the adoption of formal control, social control, or both? (2) What is the nature of the relationship between formal control and social control - are they substitutes or complements? We develop a model to investigate the impact of the length of cooperation and institutionalization on the use of control mechanisms. Further, we argue that in China, formal control and social control may be substitutes in domestic buyer–supplier relationships, but they may be complements in international relationships. Survey data collected nationwide with executives in 380 domestic and 200 international buyer–supplier relationships in China are used to test our hypotheses.

Developing successful trust-based international exchange relationships

Trust is a central construct in relationship marketing. Yet the literature provides mixed empirical evidence on the trust–performance linkage. Also, there is limited research on how to build trusting international buyer–seller relations. We develop a comprehensive model integrating performance-enhancing mechanisms and antecedent processes of trust in import–export relationships. Our survey results from importers trading with overseas manufacturers suggest that existing levels of trust have a positive effect on relationship performance outcomes achieved 1 year later. Importantly, trust takes on greater importance in enhancing performance under conditions of high interdependence, whereas in circumstances of low interdependence trust has no discernible effect. The findings also indicate that interfirm psychic distance, internal uncertainty, and exporter transaction-specific assets and opportunism are related to importer trust. Implications for academics and practitioners are addressed.

Safeguarding investments and creation of transaction value in asymmetric international subcontracting relationships: The role of relationship learning and relational capital

This study examines how suppliers who do not have bargaining power to protect relationship-specific investments (RSIs) can use safeguarding mechanisms to create transaction value in the context of asymmetric international subcontracting partnerships. From a supplier perspective, two different types of bilateral safeguarding mechanisms, relationship learning and relational capital, play discrete roles in the process of creating transaction value. Drawing on a resource-based view (RBV) of the firm, this study proposes that RSIs (a firm's resources), can enhance relationship learning (capabilities), which in turn, facilitates dyadic capability enhancing (joint competitive advantage). In addition, from a social capital perspective, relational capital facilitates relationship learning and strengthens the positive relationship between RSIs and relationship learning. Relationship learning plays the key role, and acts as the catalyst in transforming RSIs and relational capital into dyadic capability enhancing. The hypotheses are tested using data from a survey of 118 Taiwanese supplier–international buyer relationships in information technology industries. The study finds that relationship learning mediates the relationship between RSIs and dyadic capability enhancing, and that relational capital moderates the relationship between RSIs and relationship learning.

Expectations of Working Relationships in International Buyer–Seller Relationships: Development of a Relationship Continuum Scale

This study is an attempt to develop a scale to measure expectations of buyer–seller working relationships on a cross-cultural basis in the hospitality industry. The focus is on North American and Asian hotel salespeople. The scale development drew from previous research in guanxi relationships, purchasing, and selling strategies. While the results did not support a reliable unidimensional scale that could distinguish between transactional and collaborative working relationships, the methodology did create a framework for further scale development.

The role of functional conflict in international buyer–seller relationships: Implications for industrial exporters

In their attempt to compete successfully in foreign markets, exporting firms must comprehend the decision-making and attitude of their overseas customers. Yet, there is a noticeable lack of research dealing with the import behavior of the firm. Focusing on import distributor firms trading with export manufacturers of industrial products, this study investigates the role of functional conflict in importer–exporter relationships. Results indicate that functional conflict is related positively to exporter cultural sensitivity and asset specificity and negatively to exporter opportunism. More importantly, importers' future purchase intentions are associated negatively with opportunism and positively with asset specificity and functional conflict. Theoretical and managerial implications of the findings are discussed along with suggestions for future research.

International supply relationships and non-financial performance—A comparison of U.S. and German practices

Despite the fact that the international trade of goods continues to steadily increase, international supply management for manufacturing still represents a largely under-researched topic. These omissions in the extant literature include a lack of focus upon the factors affecting the performance outcomes of international sourcing. This article examines the antecedents of the supply management performance of international buyer–supplier relationships. It does so from the perspective of the buying organization. The authors develop an integrative framework based on game theory and exchange theory, and linked with the resource dependence approach and transaction cost theory. Specifically, the relationships between four constructs are examined: the multi-dimensional construct of uncertainty, the game-theoretical construct of the shadow of the future, the exchange-theoretical construct of social bonding, and supply management performance. Based on large-scale surveys with supply managers, the framework is tested in a cross-national study in the U.S. and in Germany.

The effect of successful trade show attendance on future show interest: exploring Japanese attendee perspectives of domestic and offshore international events

Examines the attendance objectives of Japanese visitors for both a domestic (Japanese) and offshore (US) trade show, and explores the relationship between a successful trade show visit and future attendance intentions. Results suggest that attendees maintain very similar goals for international show attendance regardless of the show’s geographical location, but conceptualize successful trade show participation differently. Also demonstrates that successfully achieving different types of attendee objectives significantly increases attendees’ interest levels in future attendance at each of the two shows examined. Success in seeing products and trends at the domestic show was found to affect future show interest significantly. Whereas at the offshore US show, successful supplier interaction only affects interest when combined with seeing products and trends and gathering buying process information. These findings have strong implications for researchers investigating the relatively under‐studied issues of international buyer behavior at trade shows and practitioners involved in the organization of and exhibition at international events.

The Impact of Vertical Coordination on Ex Post Transaction Costs in Domestic and International Buyer–Seller Relationships

Even though the transaction costs framework has evolved considerably in the past decade, there is still only modest empirical knowledge about the governance performance implications of the theory. This article focuses on the governance performance of vertical coordination in relationships between manufacturing firms. On the basis of transaction cost analysis and related works in international marketing, the authors examine the impact of asset specificity and vertical coordination on ex post transaction costs in domestic and international buyer–seller relationships. In accordance with current literature in international marketing, performance measurement problems are expected to be more evident in international business trade than in domestic business-to-business relationships. The empirical findings show that under conditions with substantial asset specificity, vertical coordination reduces ex post transaction significantly more in international buyer–seller relationships than in domestic channel dyads.

The Negotiation Process as a Predictor of Relationship Outcomes in International Buyer–Supplier Arrangements

Both the negotiation process and relationship building are integral to successful long-term business relationships. This paper combines the quest for reliable relationship measures with the findings of the negotiation literature in determining the extent to which negotiation process variables are predictors of past, present, and future relationship outcomes. In particular, the study examines the negotiation-relationship link in the context of international supplier relationships. The results of the empirical analysis indicate that purchasing departments tend to perceive a better past and present relationship when they can work independently with technical information provided by other departments. A better future relationship is correlated with senior management involvement and customer meetings.