The role of trust in supply chain governance

Purpose – The purpose of this paper is to provide and illustrate a framework for the role of governance mechanisms in information sharing among supply chain members. The importance of trust in governing interorganizational relationships is emphasized.Design/methodology/approach – Trust, bargaining power, and contract are three key constructs supporting the governance of information sharing and material flow coordination in supply chains. A conceptual framework showing how these governance mechanisms affect coordination and ultimately, supply chain performance is presented. Four types of trust – calculative, competence, integrity, and predictability – are thought to play an important role in determining the efficacy of information sharing. Three research questions are posed on the relationships among trust, bargaining power, contracts, and information sharing in supply chain coordination. These governance issues are shown to be key factors in the supply chain business model, as illustrated in a case study ...

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