Communication, trust, commitment, satisfaction and cooperation on buyer-supplier relationship

Abstract

Relationship marketing is essential for success in businesses. It provides sustainable competitive advantage along the marketing channel supply chain. Communication, trust, commitment, satisfaction and cooperation have received the highest level of scholarly attention in this field. These constructs are recognized as the buyer-seller relationship qualities success factors. However, previous studies have focused on these five constructs specifically communication, trust, satisfaction, commitment and cooperation separately or partially rather than studying them collectively. Thus, the present study fills literature gap by introducing a more comprehensive and holistic model on the inter-relationship of success factors and their mediation effect. Additionally, most of the previous studies in relationship marketing focuses on manufacturing industry and service sector on western marketing channel setting from the sellers’ perspectives. Consequently, the present study provides a better understanding of social exchange antecedent and consequences of Malaysian business-to-business retailing context from the buyers’ (retailer) perspectives. The current study also examines the decomposition of trust construct from the typology in psychology inclusive of earned trust, verifiable trust, calculative trust, reciprocal trust and blind trust. The study assists managerial decision in determining the priority construct for relationship performance improvement. Through a multi-stage sampling, the study was conducted on Malaysian merchandise retailers by evaluating relationship qualities with their key suppliers. 284 structured questionnaires were analyzed through Structural Equation Modelling-Partial Least Square with eleven of the fifteen hypotheses were supported. A key finding of the current study is that these five constructs are inter-related. Formal communication, which is regarded as the antecedent has a significant effect on crucial construct for relationship maintenance namely satisfaction and trust. Informal communication is a significant predictor for relationship continuity construct comprising of commitment and cooperation. Moreover, trust is an independent variable that significantly affects satisfaction, commitment and cooperation; while satisfaction has significantly influenced commitment and cooperation. Cooperation is significantly the outcomes of trust, satisfaction, and commitment. Also, out of five types of trust, only earned trust, reciprocal trust and blind trust are the precursors of overall trust with blind trust has the highest significant value. The results of the study also specify that satisfaction and commitment partially mediate the relationship between industrial buyer and seller. The key target construct for relationship performance improvement for commitment and cooperation is trust. Interestingly, blind trust is the essential constructs for trust, indicating the major potential for improvement. Hence, it becomes evident that another valuable finding of the current study is that trust is the utmost important consideration in the survival of strategic alliance. The results also suggest that although decision within a retailer-supplier relationship is made with profit in mind, the elements of culture pervade most dealings within Malaysian context; enabling the decision to be made on an interpersonal basis. Therefore, managers dealing with Malaysian retailers need to focus on the main objective of creating long-term cooperation through relational exchange apart from merely economic exchange. Future research should focus on other context such as different geographic location, industry and sectors, perspectives of business to consumer setting or the ideal circumstances of obtaining information from both sides of the inter-firm dyad.