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

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Authors
Ryu, Sungmin
Issue Date
2005-12
Publisher
College of Business Administration (경영대학)
Citation
Seoul Journal of Business, Vol.11 No.2, pp. 1-28
Keywords
environmental uncertaintyperformance
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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