Trust in buyer-supplier collaboration – The importance of personal relationships
Tuppi, Hanna (2016)
Tuppi, Hanna
2016
Kuvaus
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Tiivistelmä
Buyer-supplier collaborations are getting more important in today’s business word where many companies focus on their core activities while outsourcing the non-core ones. Developing long-term stable relationships with key suppliers is one of the key success factors for managing a supply chain. Trust has a major role in these collaborative relationships; it, for example, eases the communication, reduces needs for monitoring, and increases efficiency. This research examines how individuals who work with buyer or supplier companies perceive trust in these collaborative relationships, and how the personal relationships they have developed affect the trust building between the companies involved in a business relationship.
There are different types of buyer – supplier relationships, which typically arise through several phases where trust grows from a cognitive-based to an affection-based type. Trust is part of the social capital which is created in the collaborative relationships; it eases the collaboration and enables several benefits from the relationship. Individuals can have a significant impact on the relationship in the execution phase after companies have agreed on the purpose of the collaboration.
Empirical data from a Finnish company was collected while using a single-case research method. The case company has been involved in long-term relationships with its leading suppliers as well as with biggest customers. Therefore, these relationships give an interesting background for the present study. Eleven persons were interviewed face to face, using an open interview method called laddering. Empirical data was analysed using cognitive mapping and content analyses.
It was found that individuals give high importance to trust in buyer-supplier collaboration. Trust makes the collaboration smoother, gives confidence in the partners’ actions and predictability for future, making individual’s work more efficient and pleasant. Trust also positively affects the whole supply chain performance. Indeed, personal relationships are seen as the base for trust building between the collaborative companies. It was also revealed that both the personal relationships and the related trust that is built in these relationships are necessary for collaboration, especially for information sharing, overall work efficiency, and individual’s work satisfaction in buyer-supplier relationships.
There are different types of buyer – supplier relationships, which typically arise through several phases where trust grows from a cognitive-based to an affection-based type. Trust is part of the social capital which is created in the collaborative relationships; it eases the collaboration and enables several benefits from the relationship. Individuals can have a significant impact on the relationship in the execution phase after companies have agreed on the purpose of the collaboration.
Empirical data from a Finnish company was collected while using a single-case research method. The case company has been involved in long-term relationships with its leading suppliers as well as with biggest customers. Therefore, these relationships give an interesting background for the present study. Eleven persons were interviewed face to face, using an open interview method called laddering. Empirical data was analysed using cognitive mapping and content analyses.
It was found that individuals give high importance to trust in buyer-supplier collaboration. Trust makes the collaboration smoother, gives confidence in the partners’ actions and predictability for future, making individual’s work more efficient and pleasant. Trust also positively affects the whole supply chain performance. Indeed, personal relationships are seen as the base for trust building between the collaborative companies. It was also revealed that both the personal relationships and the related trust that is built in these relationships are necessary for collaboration, especially for information sharing, overall work efficiency, and individual’s work satisfaction in buyer-supplier relationships.