Combined effect of trust, commitment and supplier development on buyer-supplier performance in textile industry

• Main Author: Rajput, Amer
• Format: Thesis
• Language: English
• Published: 2013
• Subjects: HD Industries. Land use. Labor
• Online Access: http://eprints.utm.my/id/eprint/38027/1/AmerRajputPFPPSM2013.pdf; http://eprints.utm.my/id/eprint/38027/

Large scale manufacturing organizations in developed and developing countries utilize supplier development practices to cope with increased competition and cost pressure. Understanding the effect of supplier development approaches on buyer-supplier performance remains a critical problem for these large scale manufacturing buying firms. There is a need to understand the effects of supplier development approaches combined with buying firm’s trust and commitment on the buyer-supplier performance in the textile industry of a developing country. This study investigates the effect of supplier development approaches on buyer-supplier performance, combined effects of buying firm’s trust with supplier development approaches on buyer-supplier performance, and combined effects of buying firm’s commitment with supplier development approaches on buyer-supplier performance. A research framework was developed by integrating indirect supplier development approach through goal-setting theory and influence strategy, direct supplier development approach through transaction cost theory and knowledge-based view on buyer-supplier performance, the moderation of buying firm’s trust on relationship of indirect and direct supplier development with buyer-supplier performance, and the moderation of buying firm’s commitment on relationship of indirect and direct supplier development with buyer-supplier performance. Regression analysis was performed on a cross-sectional data of 345 firms in the textile industry of Pakistan and the findings showed that the supplier development approaches were positively related to the improvement of buyer-supplier performance. Moreover, the buying firm’s trust and commitment positively moderated the relationship of supplier development approaches with buyer-supplier performance. The combined effects of buying firm’s trust and commitment with supplier development approaches resulted in the improvement of buyer-supplier performance. The findings are significant in order to understand the effect of supplier development approaches on buyer-supplier performance, and the combined effects of supplier development approaches with buying firm’s trust and commitment on buyer-supplier performance specifically in the context of the textile industry.