Exploratory Modeling Of Buyer-Supplier Relationship And Trust

Contribution to the field

The aim of the author is to study the model of the relationships of the buyers and suppliers. The paper also shows the exploratory modelling of how the trust impacts the relationship between the buyers and the suppliers.  The author used the concepts of the supply chain management. The data used in the report is 164 dyads of the sellers and buyers which is used as a sample from the cross section of industries which takes into account both private and public organizations. The organizations have been selected from the membership database of the Purchasing Management Association of Canada.  The purchasing manager was used as the key respondent of the buyer and in case of the suppliers, it was the account manager. By using the technique of partial least square method , the predictive power of the path analytical model of the relationship between the buyers and the suppliers can be constructed simultaneously. The report also suggests that there is a presence of huge level of inter organizational cooperative behaviours.  The author at first provides a background of the cooperative behaviours, trust and performance of the relationships of different buyers and suppliers.  Then the outline of the conceptual model is being discussed along with the hypothesized relationship which is implicit in the path of the model. The results of the PLS test models are then been discussed. Though the author tried to cover all the parts of the study but there was absence of some parts like as the observations of the dyad was not longitudinal, it lacked the understanding of the time used for building of trust. Also, there were presence of many contingent variables that could not be included in the model with the given survey design and size of the sample.

It has been found out that there is absence of any kind of correlation that is present between the level of trust of the supplier and its satisfaction. On the other hand, high level of trust from the buyers help the suppliers to perform better.  The model also found out that development of the flexible arrangements, sharing of the strategic plans, willingness to alter the condition with the expectation to suit unanticipated situations were considered as the most prevalent sources of better performance. However, when joint responsibility is developed by the buyers and suppliers in case of problem solving does not seem to have much impact on the buyer’s assessment of outcomes. As the model states that the most important factor of the buyer’s satisfaction is the performance of the suppliers, therefore it can be said that the authors aim to show the relationship between the supplier and buyer has been achieved. It has also been found out that the performance assessment of the relationship of the seller is related to the level of shared planning. The report also showed that the joint responsibility is not at all related to the satisfaction of the buyer or the assessment of the relationship’s performance although it was expected that the joint responsibility would have a positive relation between the suppliers and the buyers.

Approach used and the review of the report

The approach that is made in the report is mainly based on the4 analytical framework. The report analyses the theory. The modelling technique that is used in the report is the partial least square modelling technique because it is usually used for testing the strength of the individual component relationship instead of finding the overall fit of the proposed model. Therefore, PLS is one of the useful models which is used for predictive purposes in cases when the theory is not being fully developed. The results which comes out after regression is valid as the technique of PLS had been used. The value of R² for joint responsibility is shown as 0.277and for the flexibility in arrangement it is known to have 0.288. although it has been found out that all the cooperative behaviours do not have a significant relationship to the outcomes of the buyer’s assessment.  The regression shows that the planning that is shared is loaded o performance and its flexibility in arrangement have a significant impact on both satisfaction and performance. Although he joint responsibility did not showed any kind of significant effect. The buyer’s satisfaction of R² of 0.436 was driven both by flexibility of arrangement and through performance assessment. Therefore, it can be said that the shared planning and the flexibility in arrangement were highly related to the assessment of the outcomes of the buyers. The author also examines the cooperative behaviours were related to anyone performance dimension as opposed by the buyer’s assessment of performance. The model also states that the major determinant of the satisfaction of the satisfaction of the buyer is the performance of the supplier.  The satisfaction of the purchasing manager is dependent on some relationship aspect which is generally not reflected in the report. The research therefore, specifically highlights the importance of trust building with suppliers with buyers plan to the level of scope along with the cooperative activity. It also showed that with the rise in cooperative behaviour there is an increase in the satisfaction of the buyer firms.  The evidence used for showing the results is quite effective in supporting the arguments. The conclusion that has been drawn is that the generalized finding is much in contrast with the exemplar industries such as an automotive field or on such industries which is used for research design purposes. The supplier involvement which leads to positive outcomes is the function of the trust of the buyer’s firm. However, there were presence of some limitations in the cross-sectional study of the concept. As the observations used for the 164 dyads were not longitudinal and so there was a lack of understanding. As the mail survey methodology is used there was an absence of an access for rich interaction of the events that helps in producing perceptions in the score of the measures. The third limitation was that there was presence of many con6tingent variables tat cannot be put into the model with the given practicalities survey instrument size and design. The study also showed a surprising result that the joint responsibility does not appear to be related to the buyer’s satisfaction . The cross-sectional sample which is used in the report takes into account a wide variety of industries. There is also presence of other situations which shows the contingent nature of the cooperation of buyer and supplier. Though the cross-sectional data shows that high level of trust is associated with the presence of the cooperative behaviours although it cannot show how the relationships changes with time. The study shows that the median age of the relationship between the buyers and suppliers were found to be more than five years. As it was claimed that the trust building moves matures as its ages, however it has been found out that there was present of no significant difference in the result of new relationship and the old relationship. The result can be present because the level of trust might be already established. An arrangement which is highly cooperative which is present between the buyers and the sellers.

Conclusion

Therefore, the interplay of the cooperative behaviour and the trust development cannot be established through this data.

Conclusion:

Further research can be done using a case study approach that is longitudinal in nature to show the pattern of trust and cooperation over time. The style of writing is quite simple and is suitable for academic experts. There is also presence of several other antecedents which is used for successful promotion of the cooperative behaviours. On of the factors is the belief of the supplier in the likelihood of the successful promotion of the cooperative behaviour which had a small impact on the amount of buyer supplier activity developed. The author intended to write the report mainly for academia. However, the study in the end shows developing the trust of the supplier is not only the factor that affects the cooperative behaviour of the suppliers.

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