Influence of power asymmetry, commitment and trust on sme retailers’ performance
Abstract
The purpose of this study is to analyze the effect of power asymmetry, commitment and trust to business performance. In a business relation, the role of power asymmetry, commitment and trust are importance to maintain the quality of a relationship. Business performance is an important factor to decide whether a business relation should be continued or terminated. We conducted a survey with traditional SME retailers in Indonesia as the respondents, which were obtained through purposive sampling methods. This study involved 245 SME retailers who have business relation with modern companies as their supplier. We adopted Morgan and Hunt’s (1994) model of relationship marketing for business to business in order to analyze the relationship among companies in business network. The result shows that power asymmetry, commitment and trust have significant, positive effects on business performance. The implication of this study is: power asymmetry between modern companies and SME potentially accelerates their performance, while commitment and trust will provide firm foundation for the companies involved in the business relation. In overall, power asymmetry has impact for firm with lack of bargaining position in business relation, thus instead of being exploited, SME retailers can increase their business performance due to partner’s pressure and demand to their performance.
Keyword : power asymmetry, commitment, trust, business performance
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Buuren NT (2017) Understanding the effects of power asymmetry on a start ups’s innovation performance. IBA Bachelor Thesis, October 6th 2017. Enchede. The Netherlands.
Ejdys J (2018) Building technology trust In ICT Application At A University. International Journal of Emerging Markets 13 (5): 980-997. https://doi.org/10.1108/IJoEM-07-2017-0234
Fullerton G (2005) The impact of brand commitment on loyalty to retail service brands. Canadian Journal of Administrative Science 22: 97-110. https://doi.org/10.1111/j.1936-4490.2005.tb00712.x
Giannakis M (2007) Performance measurement of supplier re-lationships. Supply Chain; An International Journal 12 (6): 400-411. https://doi.org/10.1108/13598540710826335
Gronroos, Ch (1994) From marketing mix to relationship marketing: Towards a paradigm shift in marketing. Ma-nagement Decision 32 (2): 4-20. https://doi.org/10.1108/ 00251749410054774
Hingley M K (2005) Power imbalance in UK agri food sup-ply channels: Learning to live with the supermarkets? Journal of Marketing Management 21: 63-68. https://doi.org/10.1362/0267257053166758
Kim K (2000) On interfirm power, channel climate and solida-rity in industrial distributor-supplier dyads. Journal of The Academy of Marketing Science 28 (3): 388-405. https://doi.org/10.1177/0092070300283007
Kwon IWG, Suh T (2005) Trust, commitment and relations-hips in supply chain management; A path analysis.Supply Chain Management 10 (1): 26-33. https://doi.org/10.1108/ 13598540510578351
Lau GT, Lee SH (2000) Consumer’s trust in a brand and the link to brand loyalty. Journal of Market Focused Management 4: 341-370. https://doi.org/10.1023/A:1009886520142
Maloni M, Benton WC (2000) Power influences in the supply chain. Journal of Business Logistics 21 (1): 49-73.
Morgan RM, Hunt SD (1994) The commitment-trust theory of relationship marketing. Journal of Marketing 58 (3): 20-38. https://doi.org/10.1177/002224299405800302
Porter ME (1980) Competitive strategy. New York: The Free Press.
Ramaseshan B, Leslie CY, Pae JH (2006) Power, satisfaction and relationship commitment in Chinese store-tenant relationship and their impact on performance. Journal of Retailing 82 (1): 63-70. https://doi.org/10.1016/j.jretai.2005.11.004,/a>
Ratnasingam P (2000) The influence of power on trading partner trust in electronic commerce. Internet Research: Electronic Networking Applications and Policy 10 (1): 56-62. https://doi.org/10.1108/EUM0000000005316
Rosli MM, Sidek S (2013) The impact of innovation on the per-formance of small and medium manufacturing enterprise: Evidence from Malaysia. Journal of Innovation Manage-ment in Small & Medium Enterprise 20: 16. https://doi.org/10.5171/2013.885666
Rufin R, Molina CM (2015) Moderating effects of familiarity and experience in the relationship of trust with it antecedents and consequences. E Service Journal 9 (3): 19-42. https://doi.org/10.2979/eservicej.9.3.19
Ryciuk U (2017) Identification of factors related to trust formation in construction supply chains. 7th International Conference on Engineering, Project, and Production Management. Pro-cedia Engineering 182: 627-634. https://doi.org/10.1016/j.proeng.2017.03.168
Ryu S, Soonhong M, Nobuhide Z (2008) The moderating role of trust in manufacturer-supplier relationships. Journal of Business & Industrial Marketing 23 (1): 48-58. https://doi.org/10.1108/08858620810841489
Sahadev S (2008) Economic satisfaction and relationship com-mitment in channels: The moderating role of environmental uncertainty, collaborative communication and coordination strategy. European Journal of Marketing 42 (1): 178-195. https://doi.org/10.1108/03090560810840961
Spekman RE, Carraway R (2006) Making the transition to colla-borative buyer-seller relationship: An emerging framework. Industrial Marketing Management 35: 10-19. https://doi.org/10.1016/j.indmarman.2005.07.002
Srinivasan R, Moorman Ch (2005) Strategic firm commitments and rewards for customer relationship management in on-line retailing. Journal of Marketing 69: 193-200. https://doi.org/10.1509/jmkg.2005.69.4.193
Suvanto H (2012) Constructing a typology of trust in asymme-trical food business relations. British Food Journal 114 (7): 926-943. https://doi.org/10.1108/00070701211241536 a>
Vesna ZM, Makovec B (2004) Values, trust, and commitment in bu-siness-to-business relations. International Marketing Review 21 (2): 202-215. https://doi.org/10.1108/02651330410531402
Viitaharju L, Merja L (2012) Antecedents of trust in asymmetri-cal business relations; Differing perceptions between food producers and retailers. Marketing Intelligence and Planning 30 (5): 567-587. https://doi.org/10.1108/02634501211251061
Wu W-Y, Chiag Ch-Y, Wu Y-J, Tu H-J (2004) The influencing factors of commitment and business integration on supply chain management. Industrial Management & Data Systems 104 (4): 322-333. https://doi.org/10.1108/02635570410530739