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Building Trust
In order to know whether the participants have a similar understanding regarding the meaning of trust, we firstly told a definition of trust to the participants. All of them agreed upon Anderson and Weitz’s (1989) definition that argue trust as one party’s belief that its needs will be fulfilled in the future by actions undertaken by other parties. With this aligned, we proceed and asked the participants the open questions to understand how trust can be built. All respondents identified trust as a critical element in a business relationship.
The participants argued that “trust is an important factor to start a mutual cooperation” and “…without trust it is hard to establish a positive relationship and good performance”. Furthermore, one of the Husqvarna’s values is to seek the customer’s perspective in all activities; with this goal set, participants really care about what product they will offer to their customers. According to them, the company relies on its providers and the existence of trust in a buyer-supplier relationship is an important element to ensure high levels of quality. According to a participant, “…the quality that the suppliers deliver is an indicator that we can trust or not in this relationship”.
For the interviewees, trust is a dynamic element that changes over time. According to the participants, the level of trust can increase over time if there is no conflict in the relationship. Another reason for developing trust was highlighted by a participant “…information quality and respect lead to high levels of trust”. Furthermore, a participant added that “Trust can be developed by honoring the agreements and respecting the contracts which were established at the beginning of the relationship. These variables can be measured by establishing KPIs before signing contracts”.
When it comes to trust deterioration, participants mentioned that trust can decrease if the supplier misuses the information or not comply with the requirements. All the respondents argued that it is important to promise only what you can perform, otherwise the level of trust will decline. A participant argued that “From my perspective trust can be directly impacted if the supplier misuses the information given in confidence or fails to confirm terms.” and “Trust decreases if the supplier does not meet specifications, delivery dates, and lead times”.
In addition, a participant also argued that “Ineffective communication reduces the level of trust because it creates misunderstandings and possible problems”. According to the participants, when they start a relationship with new suppliers the level of trust can be influenced by the supplier’s reputation in the market. According to them, this factor can influence the whole trust-building process. A participant told that “If we have a relationship with a supplier, it is because we trust its services”. This is due to the fact that all suppliers must comply with the company’s mandatory requirements and sign a supplier contract to be qualified for a relationship with Husqvarna. According to a participant “In order to start a relationship, our high-quality standards must be fulfilled by our suppliers. The supplier’s performance demonstrates wether they can deliver what was promised and this is tracked by us”.
Building Relationship Commitment
Our chosen definition of commitment based on Moore (1998) “relationship commitment is an effort to maintain an ongoing relationship and ensure that it continues indefinitely” was given to participants and it was agreed by all of them. However, a participant extended the definition and emphasized the following “…commitment supports a long-term strategy and allow the partnership to be strong which leads to innovation and improvements”.
A participant mentioned relationship commitment as an important variable to ensure an effective supply chain “Supplier commits to different aspects such as price, lead times, availability and flexibility. As a manufacturing company, we completely depend on our supply chain, and the first steps of it are out of our hands”. Respondents also mentioned in their answers that trust is as an important factor to develop relationship commitment. A participant mentioned that the supplier value plays an important role in relationship commitment “The corporate values that guide the suppliers can influence the relationship commitment. The future of the relationship depends on each company values and priorities of each organization. Some suppliers are more active and it shows that they are engaged in the process”.
1. Introduction
1.1. Background .
1.2. Problem Statement
1.3. Purpose ..
2. Literature Review.
2.1. Introduction to Supply Chain.
2.2. Buyer-Supplier Relationships
2.3. Critical Elements of Buyer-Supplier Relationships
2.4. Power in Supply Chain relationships
3. Methodology .
3.1. Research design
3.2. Research approach
3.3. Case Study
3.4. Selection of Case Companies
3.5. Data Collection
3.6. Analysis of the empirical material
3.7. Trustworthiness
3.8. Issues of Ethics
4. Empirical findings
4.1. Husqvarna Group
4.2. Beslag & Metall AB .
4.3. Cross-Case Analysis
5. Analysis .
5.1. Trust and commitment .
5.2. Building Trust
5.3. Building Relationship Commitment .
5.4. Influence of Power on Trust .
5.5. Influence of Power on Commitment
6. Conclusion
References
Appendix
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Power, Trust, and Commitment in buyer-supplier relationships Satisfaction: MASTER THESIS WITHIN: General Management NUMBER OF CREDITS: 15 PROGRAMME OF STUDY: Engineering Management
