SHERP

The Influence of Interfirm Trust on Monitoring and Performance in Uncertain Environments

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Authors
Ryu, Sungmin
Issue Date
2005
Publisher
College of Business Administration (경영대학)
Citation
Seoul Journal of Business Vol11(2): 1~28(2005)
Keywords
environmental uncertainty; performance
Abstract
An important question for manufacturers is the extent to which
control over the suppliers should be maintained when the interaction
occurs in an uncertain environment. It is proposed in this paper that
the level of trust(high and low) affect the manufacturer’s level of
monitoring and perceived supplier performance in uncertain
environments. The empirical results from US manufacturers indicate
the following: 1) When the trustworthiness of exchange partners is
questionable, manufacturers tend to increase the level of monitoring
over the supplier as they feel environmental uncertainty. On the other
hand, those who place a high level of trust in a partner may need to rely
on monitoring to a lesser extent regardless of environmental
uncertainty. 2) Supplier performance, as perceived by manufacturers, is
negatively associated with environmental uncertainty when a
manufacturer’s trust in its supplier is low, but it has no relationship
with environmental uncertainty when there is high trust.
ISSN
1226-9816
Language
English
URI
http://hdl.handle.net/10371/1833
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College of Business Administration/Business School (경영대학/대학원)Dept. of Business Administration (경영학과)Seoul Journal of BusinessSeoul Journal of Business Volume 11, Number 1/2 (2005)
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