The impact of dependence and trust on supply chain integration
International Journal of Physical Distribution & Logistics Management
ISSN: 0960-0035
Article publication date: 2 August 2013
Abstract
Purpose
The purpose of this paper is to investigate the joint influence of dependence and trust in supply chain relationships on supply chain integration (SCI) and financial performance.
Design/methodology/approach
This study develops a dependence-trust-SCI-performance model and tests it using structural equation modeling based on empirical data collected from 617 manufacturers in China.
Findings
The results show that trust with customers/suppliers significantly influences SCI. Although dependence on customers/suppliers has no direct effect on SCI, it improves SCI indirectly through trust with customers/suppliers. Both supplier integration and customer integration significantly improve financial performance.
Practical implications
This study suggests that manufacturers should manage dependence and trust in supply chain relationships simultaneously to enable SCI. When there is high-level dependence on customers/suppliers, manufacturers should invest resources to develop trust with those customers/suppliers. Moreover, to achieve a better financial performance, manufacturers should integrate with both customers and suppliers.
Originality/value
This study contributes to the literature by providing empirical evidence regarding the direct effect of trust on SCI, and the indirect influence of dependence on SCI through trust. This extends extant knowledge regarding the joint impact of dependence and trust on SCI. Hence, both researchers and practitioners should pay attention to interdependence among different relationship management practices. Moreover, this study also empirically supports the argument that SCI improves firms ' financial performance.
Keywords
Acknowledgements
This research was supported by General Research Grant from the Hong Kong Research Grant Council (#CUHK455009), National Natural Science Foundation of China (#70902069), Natural Science Foundation of Shaanxi (#2010JQ9003) and Centre for Supply Chain Management & Logistics, Li & Fung Institute of Supply Chain Management & Logistics.
Citation
Zhang, M. and Huo, B. (2013), "The impact of dependence and trust on supply chain integration", International Journal of Physical Distribution & Logistics Management, Vol. 43 No. 7, pp. 544-563. https://doi.org/10.1108/IJPDLM-10-2011-0171
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited