Essay On Buyer And Supplier Relationship

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Chapter 2 Literature Review 2.0 Introduction This chapter deals with literature review on the study variables in a buyer-supplier relationship. And focus on how trust, adaptation, commitment, communication and cooperation been selected as variables that will affect buyer’s satisfaction level. 2.1 Buyer-supplier relationship Buyer-supplier relationship established since human beings started to trade goods and services. The relationship developed naturally over time after buyer and supplier developed trust and friendship which was supported by quality of product and services (Wilson. D.T, 1995). The relational development is accelerated as firms attempt to improve their relationship to achieve company goals. At the same time, the expectations in the performance have increased, and this has making the satisfactory relationship became more difficult. As pointed by Parsons A.L (2002), there was increasing dependent on the relationship and customers is demanding to receive high standard of products and services for them to sustain the business in the intense manufacturing environment. Besides, Xu et al. (2008) has highlighted that supplier is developing a long-term relationship with their crucial suppliers to increase the competitiveness and to establish an effective and efficient supply chain. Trend (2005) also mentioned that work closely in partnership with suppliers is the only way to survive in today’s competitive business environment. 2.2 Trust Trust is among the most frequently cited dimensions of C relationships in the literature and has been defined as “the firm’s belief that another company will perform actions that will result in positive actions for the firm, as well as not take unexpected actions that would resu... ... middle of paper ... ...orms in the relationship because both parties are working together toward mutual goal of satisfaction (Siguaw et al., 1998). Previous researchers have shown that there is a positive relationship between cooperation and satisfaction (e.g. Mallen, 1963; Dwyer, 1980; Schmitz Whipple and Gentry, 2000). The cooperative efforts of channel members should results in greater trust, commitment, channel efficiency and the achievement goals, thus leading to higher levels of satisfaction. (Jonsson and Zineldin, 2003). Cooperation increases mutual perceived economic and psychological satisfaction (Geykens et al., 1998; Cannon and Perrault, 1999; Parsons, 2002; Cambra and Polo, 2007) and improve the buyer-supplier bonding. Therefore, I propose H5. Cooperation between the firm and its supplier has a positive influence on the level of satisfaction perceived by industrial buyer.

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