Effects of suppliers' trust and commitment on customer involvement

Purpose – The purpose of this paper is to investigate the relationships among suppliers’ trust and commitment, transaction-specific investment, switching cost, and customer involvement within the context of relational governance mechanism and the social exchange theory. Design/methodology/approach – The authors use survey data from 214 Chinese manufacturing firms and employ the structural equation model to verify the conceptual model. Findings – Relational governance benefits customer involvement. Transaction-specific investment mediates the relationship between trust and commitment of suppliers. Switching costs negatively moderate the relationship between suppliers’ trust and customer involvement, but positively moderate the relationship between suppliers’ commitment and customer involvement. Research limitations/implications – The authors focus on two key elements of relationship, namely, trust and commitment of suppliers, but neglect other relational factors, such as relational norms and interdependenc...

[1]  M. Cao,et al.  Supply chain collaboration: Impact on collaborative advantage and firm performance , 2011 .

[2]  S. Hart,et al.  Where to Now in New Product Development Research , 1992 .

[3]  R. Gulati.  Does Familiarity Breed Trust? The Implications of Repeated Ties for Contractual Choice in Alliances , 1995 .

[4]  Pascale G. Quester,et al.  A collaborative interest model of relational coordination and empirical results , 2005 .

[5]  Asli Yagmur Akbulut,et al.  The role of ERP tools in supply chain information sharing, cooperation, and cost optimization , 2005 .

[6]  L. James,et al.  Mediators, Moderators, and Tests for Mediation. , 1984 .

[7]  R. Shah,et al.  In union lies strength: Collaborative competence in new product development and its performance effects , 2009 .

[8]  Geert Duysters,et al.  Strategic groups and inter-firm networks in international high-tech industries. , 1995 .

[9]  K. Ruyter,et al.  Antecedents of commitment and trust in customer-supplier relationship in high technology markets. , 2001 .

[10]  P. Bentler,et al.  Cutoff criteria for fit indexes in covariance structure analysis : Conventional criteria versus new alternatives , 1999 .

[11]  James A. Narus,et al.  A Model of the Distributor's Perspective of Distributor-Manufacturer Working Relationships , 1984 .

[12]  Saeed Samiee,et al.  Supplier and customer exchange in international industrial markets: An integrative perspective , 2006 .

[13]  James A. Fitzsimmons,et al.  Consumer Participation and Productivity in Service Operations , 1985 .

[14]  Margaret A. White,et al.  Learning and Knowledge Transfer in Strategic Alliances: A Social Exchange View , 2005 .

[15]  Bing-Sheng Teng,et al.  Governance structure choice in strategic alliances , 2008 .

[16]  Barton A. Weitz,et al.  The Use of Pledges to Build and Sustain Commitment in , 1992 .

[17]  Douglas B. Grisaffe,et al.  Antecedents and consequences of customer value : testing an expanded framework , 1998 .

[18]  Carl Marcus Wallenburg,et al.  Governing for innovation in horizontal service cooperations , 2012 .

[19]  S. Hunt,et al.  The Commitment-Trust Theory of Relationship Marketing , 1994 .

[20]  J. Farley,et al.  Market-Focused Organizational Transformation in China , 2000 .

[21]  C. Rusbult.  Commitment and Satisfaction in Romantic Associations: A Test of the investment Model , 1980 .

[22]  Klaus Brockhoff,et al.  Customers' perspectives of involvement in new product development , 2003, Int. J. Technol. Manag..

[23]  Russel P. J. Kingshott.  The impact of psychological contracts upon trust and commitment within supplier–buyer relationships: A social exchange view , 2006 .

[24]  Daniel J. McAllister.  Affect- and Cognition-Based Trust as Foundations for Interpersonal Cooperation in Organizations , 1995 .

[25]  John C. Narver,et al.  The Effect of a Market Orientation on Business Profitability , 1990 .

[26]  Petra M. Bosch-Sijtsema,et al.  Cooperative Innovation Projects: Capabilities and Governance Mechanisms* , 2009 .

[27]  Thomas Ritter,et al.  Relationship-specific antecedents of customer involvement in new product development , 2003, Int. J. Technol. Manag..

[28]  Wayne D. Hoyer,et al.  Consumer Cocreation in New Product Development , 2010 .

[29]  L. Moutinho,et al.  The External Contingency and Internal Characteristic of Relationship Marketing , 2000 .

[30]  Dina Mansour-Cole,et al.  User involvement in innovation projects: Toward an information processing model , 1995 .

[31]  Wann-Yih Wu,et al.  The influencing factors of commitment and business integration on supply chain management , 2004, Ind. Manag. Data Syst..

[32]  S. Sprecher.  Investment model, equity, and social support determinants of relationship commitment. , 1988 .

[33]  Peter K. Mills,et al.  Motivating the client/employee system as a service production strategy. , 1983, Academy of management review. Academy of Management.

[34]  Thompson S. H. Teo,et al.  Consumer trust in e-commerce in the United States, Singapore and China , 2007 .

[35]  Jodie Conduit,et al.  Organisational Capabilities for Customer Participation in Health Care Service Innovation , 2014 .

[36]  J. H. Davis,et al.  An Integrative Model Of Organizational Trust , 1995 .

[37]  Robert P. Leone,et al.  Psychological Implications of Customer Participation in Co-Production , 2003 .

[38]  Sven A. Haugland,et al.  Marketing strategy and customer involvement in product development , 2011 .

[39]  K. Clark,et al.  Creating project plans to focus product development. , 1992, Harvard business review.

[40]  C. Adams,et al.  Differentiation through customer involvement in production or delivery , 1993 .

[41]  Morgan Swink,et al.  EFFECTS OF MARKETING-MANUFACTURING INTEGRATION ON NEW PRODUCT DEVELOPMENT TIME AND COMPETITIVE ADVANTAGE , 2007 .

[42]  Antonio K. W. Lau,et al.  Supplier and customer involvement on new product performance , 2011, Ind. Manag. Data Syst..

[43]  James A. Narus,et al.  A Model of Distributor Firm and Manufacturer Firm Working Partnerships , 1990 .

[44]  J. Rayport,et al.  Spark innovation through empathic design. , 1997, Harvard business review.

[45]  Richard Germain,et al.  Antecedents to Customer Involvement in Product Development:: Comparing US and Chinese Firms , 2004 .

[46]  F. Dwyer,et al.  Developing Buyer-Seller Relationships , 1987 .

[47]  Johann Füller,et al.  Avatar-based innovation: Using virtual worlds for real-world innovation , 2009 .

[48]  G. Hoetker,et al.  Choice and performance of governance mechanisms: matching alliance governance to asset type , 2009 .

[49]  Byron J. Finch.  Internet discussions as a source for consumer product customer involvement and quality information: an exploratory study , 1999 .

[50]  Joseph P. Cannon,et al.  Contracts, norms, and plural form governance , 2000 .

[51]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[52]  Petra Christmann.  Effects of “Best Practices” of Environmental Management on Cost Advantage: The Role of Complementary Assets , 2000 .

[53]  K. Lai,et al.  The impact of supplier integration on customer integration and new product performance: The mediating role of manufacturing flexibility under trust theory , 2014 .

[54]  S. Fournier,et al.  Rediscovering Satisfaction , 1999 .

[55]  K. Eisenhardt,et al.  PRODUCT DEVELOPMENT: PAST RESEARCH, PRESENT FINDINGS, AND FUTURE DIRECTIONS , 1995 .

[56]  Robert E. Spekman,et al.  Characteristics of partnership success: Partnership attributes, communication behavior, and conflict resolution techniques , 1994 .

[57]  Gang Zhao,et al.  Top management support, inter-organizational relationships and external involvement , 2014, Ind. Manag. Data Syst..

[58]  B. S. Sahay.  Understanding trust in supply chain relationships , 2003, Ind. Manag. Data Syst..

[59]  Arvind Parkhe.  “Messy” Research, Methodological Predispositions, and Theory Development in International Joint Ventures , 1993 .

[60]  Peter K. Mills,et al.  Clients as “Partial” Employees of Service Organizations: Role Development in Client Participation , 1986 .

[61]  G. C. Homans,et al.  Social Behavior as Exchange , 1958, American Journal of Sociology.

[62]  Barbara B. Flynn,et al.  The impact of power and relationship commitment on the integration between manufacturers and customers in a supply chain , 2008 .

[63]  Jungwoo Lee,et al.  A firm's post-adoption behavior: loyalty or switching costs? , 2014, Ind. Manag. Data Syst..

[64]  Hamieda Parker,et al.  Interfirm collaboration and the new product development process , 2000, Ind. Manag. Data Syst..

[65]  Mike Cohn,et al.  Agile Estimating and Planning , 2005 .

[66]  Jaideep Motwani,et al.  State and development of innovation networks: Evidence from the European vehicle sector , 2008 .

[67]  Alan C.B. Tse,et al.  CRM: conceptualization and scale development , 2005 .

[68]  Ru-Jen Lin,et al.  Customer relationship management and innovation capability: an empirical study , 2010, Ind. Manag. Data Syst..

[69]  David L. Mothersbaugh,et al.  Switching barriers and repurchase intentions in services , 2000 .

[70]  C. Voss,et al.  The impact of supply chain relationship quality on quality performance , 2005 .

[71]  James R. Brown,et al.  Managing Marketing Channel Opportunism: The Efficacy of Alternative Governance Mechanisms , 2000 .

[72]  K. Lai,et al.  “Black‐box” and “gray‐box” supplier integration in product development: Antecedents, consequences and the moderating role of firm size , 2007 .

[73]  Haiyang Li,et al.  When Does Trust Matter? Antecedents and Contingent Effects of Supervisee Trust on Performance in Selling New Products in China and the United States , 2002 .

[74]  Olivier Caya,et al.  Safeguarding mechanisms in a supply chain network , 2006, Ind. Manag. Data Syst..

[75]  Yadong Luo,et al.  Governing buyer–supplier relationships through transactional and relational mechanisms: Evidence from China , 2009 .

[76]  G. Shaw.  Policy Implications of Endogenous Growth Theory , 1992 .

[77]  E. Christou.  Web 2.0 and Customer Involvement in New Service Development: A Framework, Cases and Implications in Tourism , 2016 .

[78]  J. H. Davis,et al.  An integrative model of organizational trust, Academy of Management Review, : . , 1995 .

[79]  Yves L. Doz,et al.  Technology Partnerships between Larger and Smaller Firms: Some Critical Issues , 1987 .

[80]  Ely Laureano Paiva,et al.  Supply chain planning and trust: two sides of the same coin , 2014, Ind. Manag. Data Syst..

[81]  W. Bearden,et al.  Dependence, Trust, and Relational Behavior on the Part of Foreign Subsidiary Marketing Operations: Implications for Managing Global Marketing Operations , 2001 .

[82]  L. Hallén,et al.  Interfirm Adaptation in Business Relationships , 1991 .

[83]  Shu-Hua Chien,et al.  Supplier involvement and customer involvement effect on new product development success in the financial service industry , 2010 .

[84]  A. Haleem,et al.  Customer involvement in greening the supply chain: an interpretive structural modeling methodology , 2013 .

[85]  T. Burns,et al.  A Structural Theory of Social Exchange , 1973 .

[86]  Jan B. Heide,et al.  The Shadow Of The Future: Effects Of Anticipated Interaction And Frequency Of Contact On Buyer-Seller Cooperation , 1992 .

[87]  Ken G. Smith,et al.  Intra-and Interorganizational Cooperation : Toward a Research Agenda , 2007 .

[88]  S. Tamer Cavusgil,et al.  Enhancing alliance performance: The effects of contractual-based versus relational-based governance , 2006 .

[89]  I. Alam.  An exploratory investigation of user involvement in new service development , 2002 .

[90]  R. Handfield,et al.  Supplier integration into new product development: coordinating product, process and supply chain design , 2005 .

[91]  D. A. Kenny,et al.  The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. , 1986, Journal of personality and social psychology.

[92]  Joseph P. Cannon,et al.  An Examination of the Nature of Trust in Buyer–Seller Relationships: , 1997 .

[93]  C. Prahalad,et al.  The New Frontier of Experience Innovation , 2003 .

[94]  Preet S. Aulakh,et al.  Trust and Performance in Cross-Border Marketing Partnerships: A Behavioral Approach , 1996 .

[95]  C. Yu,et al.  Formal governance mechanisms, relational governance mechanisms, and transaction-specific investments in supplier–manufacturer relationships , 2006 .

[96]  Robert E. Spekman,et al.  A Strategic Approach to Managing Buyer‐Seller Relationships , 1991 .

[97]  D. A. Horne,et al.  Level of success inputs for service innovations in the same firm , 1995 .

[98]  Jan-Benedict E. M. Steenkamp,et al.  The Effects of Trust and Interdependence on Relationship Commitment , 1996 .

[99]  M. Pesaran,et al.  Testing for unit roots in heterogeneous panels , 2003 .

[100]  Richard Lee,et al.  Interactions and consequences of inertia and switching costs , 2012 .

[101]  B. Schlegelmilch,et al.  Drivers of Commitment and its Impact on Performance in Cross-Cultural Buyer-Seller Relationships: The Importer's Perspective , 2002 .

[102]  Andrew M. Farrell,et al.  Insufficient Discriminant Validity: A Comment on Bove, Pervan, Beatty and Shiu (2009) , 2008 .

[103]  Barbara B. Flynn,et al.  The impact of supply chain integration on performance: A contingency and configuration approach , 2010 .

[104]  L. Ngo,et al.  Innovation and business success: The mediating role of customer participation , 2013 .

[105]  R. Pieters,et al.  Beyond valence in customer dissatisfaction: A review and new findings on behavioral responses to regret and disappointment in failed services , 2004 .

[106]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[107]  S. Thomke.  R&D comes to services. Bank of America's pathbreaking experiments. , 2003, Harvard business review.

[108]  R. Calantone,et al.  Determinants of New Product Performance: A Review and Meta-Analysis , 1994 .

[109]  F. Dwyer,et al.  An Examination of Organizational Factors Influencing New Product Success in Internal and Alliance-Based Processes , 2000 .

[110]  L. O’Malley,et al.  Intimacy or Intrusion? The Privacy Dilemma For Relationship Marketing in Consumer Markets , 1997 .

[111]  B. Krishna Kumar,et al.  Performance analysis of an M/G/1 queueing system under Bernoulli vacation schedules with server setup and close down periods , 2013, Comput. Ind. Eng..

[112]  Jeffrey J. Reuer,et al.  Entrepreneurial alliances as contractual forms , 2003 .

[113]  T. Cheng,et al.  An empirical study of employee loyalty, service quality and firm performance in the service industry , 2010 .

[114]  A. Söllner,et al.  Asymmetrical Commitment in Business Relationships , 1999 .

[115]  G. Zaltman,et al.  Relationships between Providers and Users of Market Research: The Dynamics of Trust within and between Organizations , 1992 .

[116]  A. Scupola,et al.  Investigating issues and challenges for customer involvement in business services innovation , 2011 .

[117]  C. Agnew,et al.  Commitment and its theorized determinants: A meta–analysis of the Investment Model , 2003 .

[118]  Hamid Noori,et al.  Developing breakthrough products: challenges and options for market assessment , 1999 .

[119]  Todd R. Zenger,et al.  Do Formal Contracts and Relational Governance Function as Substitutes or Complements , 2002 .

[120]  E. Helpman.  Endogenous Macroeconomic Growth Theory , 1991 .

[121]  David Wilemon,et al.  Seller-buyer interactions during the commercialization of technological process innovations , 1996 .

[122]  Su-Chao Chang,et al.  Factors affecting user's online shopping behavior: Integrating the constraint-based and dedication-based relationship perspectives , 2011 .

[123]  Robert G. Cooper,et al.  The Dimensions of Industrial New Product Success and Failure , 1979 .

[124]  Satish Nambisan,et al.  DESIGNING VIRTUAL CUSTOMER ENVIRONMENTS FOR NEW PRODUCT DEVELOPMENT : TOWARD A THEORY , 2005 .

[125]  Robert W. Ruekert,et al.  Marketing's Interaction with Other Functional Units: A Conceptual Framework and Empirical Evidence , 1987 .

[126]  Stewart R. Miller,et al.  A conceptual framework of relational governance in foreign distributor relationships , 2002 .

[127]  T. Ambler,et al.  The Dark Side of Long-Term Relationships in Marketing Services , 1999 .

[128]  Makoto Matsuo,et al.  Customer orientation, conflict, and innovativeness in Japanese sales departments , 2006 .

[129]  Martin Müller,et al.  Reducing information technology-based transaction costs in supply chains , 2007, Ind. Manag. Data Syst..

[130]  Joseph P. Cannon,et al.  Building long-term orientation in buyer–supplier relationships: The moderating role of culture , 2010 .

[131]  Yadong Luo,et al.  Building Trust in Cross-Cultural Collaborations: Toward a Contingency Perspective: , 2002 .

[132]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[133]  Ali Yakhlef,et al.  Customer involvement in new service development: a conversational approach , 2004 .

[134]  Selin Sayek,et al.  FDI and Economic Growth : The Role of Local Financial Markets * , 2000 .

[135]  E. Anderson.  Cross-category variation in customer satisfaction and retention , 1994 .

[136]  G. C. Homans,et al.  Social Behavior: Its Elementary Forms. , 1975 .

[137]  A. Walter,et al.  Relationship-specific factors influencing supplier involvement in customer new product development , 2003 .

[138]  Judy K. Frels,et al.  Consumer switching costs: A typology, antecedents, and consequences , 2003 .

[139]  D. A. Kenny,et al.  Process Analysis , 1981 .

[140]  C. Fornell.  A National Customer Satisfaction Barometer: The Swedish Experience: , 1992 .

[141]  E. Anderson,et al.  The Antecedents and Consequences of Customer Satisfaction for Firms , 1993 .

[142]  Amjad Hadjikhani,et al.  Industrial relationships and the effects of different types of connections , 2009 .

[143]  Gregory T. Gundlach,et al.  The Structure of Commitment in Exchange , 1995 .