Supply Chain Trust: A Two-Way Street?

Abstract

This research compares differences between customers´ and suppliers´ perceptions of the trustworthiness of their supply chain exchange partners and the implications for performance, applying the organizational behavior and marketing literature on trust to the supply chain context. A survey in the logistics sector in Brazil was used to collect data from two independent samples (customers and suppliers). Three alternative models of the antecedents of trustworthiness perceptions and the relationship between trust and performance were tested using multiple regression. This was followed by a panel session with logistics industry experts to discuss the results and their practical implications. We found that the ability of an exchange partner is important to both suppliers and customers in their perceptions of trustworthiness. In addition, customer integrity is important to suppliers, while supplier benevolence is important to customers. Trust is related to expectations about order accuracy, quality and cost by both suppliers and customers and to suppliers’ on-time delivery expectations. The findings support the contention of social exchange theory that, when there is a trusting relationship between exchange partners, there is heightened commitment to jointly held goals. They also support transaction cost economics theory by showing how trust forms an intangible transaction- specific asset that serves as a governance mechanism against opportunistic behavior. The findings provide a useful guideline for managers seeking to improve trust in their supply chain relationships. This paper extends interorganizational trust models showing that the relationship between trust and performance may not be applicable to customers and suppliers in the same manner.