|
Article Excerpt
[ILLUSTRATION OMITTED]
Introduction
Exchanges between organizations are often treated by scholars as discrete events in which individual entities are characterized as rational, calculating, and self-interested, with exchange behaviors unaffected by social relations (e.g., Frenzen and Davis, 1990). One of the basic assumptions is that parties of an exchange relationship will act opportunistically without regard for their exchange partners whenever they can further themselves or their organizations by so doing (John, 1984).
Despite the one-time prevalence of this view, closer, deeper inter-organizational relationships (i.e., distribution channel relationships) are receiving increasing attention by both practitioners and leading marketing scholars (e.g., Gundlach and Murphy, 1993; Welch, 2006). Among the most frequently examined variables that affect the development of such relationships are trust (e.g., Bakker et al., 2006; Wang, 2006) and commitment (e.g., Anderson and Weitz, 1992; Lehtonen, 2006; Tummala et al., 2006). Understanding the important roles of trust and commitment in distribution channels is crucial in understanding channel relationships. However, we still have only a superficial knowledge of the complexities and subtleties of trust and commitment in these relationships.
Blau (1964) contends that a major function of exchange is the creation of trust within and between organizations. Trust is viewed by some as social capital that gains value as it deepens between two business partners (e.g., Bakker et al., 2006). Some research even suggests that trust in a channel relationship increases channel performance (Child et al., 2003; Lin et al., 2005). Morgan and Hunt (1994) suggest that trust must be present in a channel relationship before commitment can be developed, and more recent research concurs with these findings (e.g., Kilburn et al., 2006; MacMillan et al., 2005). Supporting this relationship, Moorman et al. (1992) suggest that trust is a major determinant of commitment.
Like trust, commitment is an essential ingredient for successful distribution channel relationships (Lehtonen, 2006; Tummala et al., 2006). Committed partners are willing to invest in valuable assets specific to an exchange, demonstrating that they can be relied upon to perform essential functions in the future (Anderson and Weitz, 1992). Indeed, the concept of commitment is becoming a focal point in explaining marketing even as the very nature of marketing moves further away from the transactional view of exchange and toward the concept of relationship marketing (Gundlach et al., 1995). Commitment, like trust, is reciprocal in nature (Anderson and Weitz, 1992; Gundlach et al., 1995). Commitment is also a complex variable composed of more than one dimension (Ozag, 2006).
Therefore, this study includes multiple dimensions of both trust and commitment in a trust-commitment cycle and assesses the relationship between them. This examination uses data from relationships between manufacturers and distributors in distribution channels. Though previous work has explored the dimensions of these variables and other work has examined the relationship between trust and commitment, no previous research has done both.
Literature Review
Morgan and Hunt (1994) suggest that trust and commitment should be important to understanding close, long-term marketing relationships. These concepts are key for three reasons. First, they encourage managers to work at preserving relationship investments by cooperating more closely with exchange partners. Second, they encourage managers to seek long-term benefits by staying with existing channel partners instead of being attracted to short-term profits. Finally, trust and commitment encourage managers to be more willing to take high-risk actions because they believe their partners will not act opportunistically. In summary, trust and commitment lead directly to cooperative behaviors that are conducive to relationship maintenance within a marketing channel.
Trust is a prerequisite for the development of commitment between two channel partners. In addition, the commitment of one channel partner (i.e., the buyer) will enhance the other partner's (i.e., the seller) trust in that partner (i.e., the buyer).
* Trust
Trust is an essential ingredient in cooperation and agreement between two parties (e.g., Lee and Dawes, 2005; Wang, 2006). It is important in exchange relationships because it leads to constructive dialogue and cooperative problem solving (Pruitt, 1981). Thus, it plays a critical role in the development of long-term relationships because short-term inequities are inevitable in any relationship (Wilding and Humphries, 2006). At this most basic level, one party must act before the other party, and therefore, must rely on the other party to honor its obligations (Kronman, 1985). Consequently, any type of coordination between parties leave them open to exploitation.
Similarly, through trust, channel partners develop confidence that, over the long-term, short-term inequities will be corrected to yield a long-term benefit (Wang, 2006). In addition, mutual, or reciprocal, trust is more likely than one-way trust (Burgess and Huston, 1983). Since trust is a multidimensional concept, all dimensions must be considered when attempting to define it (McAllister, 1995).
Dispositional trust. Interpersonal trust is a basic feature of all social situations that demand cooperation and interdependence. Whether loaning money, forming a car pool, or visiting a physician, individuals must decide whether the risk of becoming vulnerable and dependent is worth the risk involved. This element of risk is the foundation of dispositional trust. The predilection of individuals and organizations to trust is known as dispositional trust. When individuals or organizations choose trusting over not trusting a vast majority of the time, they have a high level of dispositional trust. Though dispositional trust held by an organization, such as a business firm, operates similarly to dispositional trust in individuals, this idea of an organization's predisposition to trust has been almost totally neglected in business academic literature (Lewin, 2003).
With the ever-increasing reliance on interorganizational relationships to become competitive, firms face the "trust or not to trust" choice with increasing frequency. Firms might tend to be risk-averse or conservative; in other words, they may be unwilling to put their fate in the hands of another firm. This loss of control can be a disincentive to trust. Also, firms may just have a tradition of not trusting. In these cases, the firms would have low dispositional trust. In order for a distribution relationship between firms to deepen (for firms to even consider relying on one another), the participants must at least be moderately predisposed to trust. Based on this discussion, dispositional trust in the...
|
