Personal and organizational level relationships in relational exchanges in supply chains – a bottom-up model

Abstract

Purpose This paper aims to examine how trust and communication at the personal level relationships conform to trust and communication at the organizational level relationships and which role do the two different level relationships play in influencing firms’ commitment, performance and propensity to stay in long-term relationships. Design/methodology/approach A face-to-face questionnaire study was conducted using a sample of 209 in Mainland China companies, which were surveyed in nine exhibitions. The data were analyzed using structural equation modeling. Findings The results support the bottom-up effect of interpersonal trust and communication on inter-organizational trust and communication. Interorganizational trust has a more powerful total effect on firm commitment. Interpersonal communication has a more powerful total effect on inter-organizational trust and communication and firms’ operational performance. Interpersonal communication, inter-organizational trust and communication have comparably high impacts on firms’ propensity to stay in long-term relationships. Research limitations/implications This paper selects Mainland China as the research context and targets a single boundary spanner in each respondent firm to evaluate both the interpersonal and inter-organizational relationships. A cross-sectional approach was used. Practical implications This paper suggests that business people should pay attention to the role of human factors in a firm’s relational exchanges with SC partners and effectively use the positive effects of these factors to create relationship-building benefits. Originality/value This paper conducts cross-level research, which has been called for in recently published inter-organizational literature. It develops and provides empirical evidence for a bottom-up model from interpersonal relationships to inter-organizational relationships and identifies their impacts on organizational outcomes simultaneously.