Critical Review: Buyer-Supplier Relationship, Trust and Performance

This report presents a critical review of a study examining the relationships between buyers and suppliers, focusing on the impact of trust on performance within a supply chain management context. The research utilizes data from 164 buyer-supplier dyads, employing the partial least square method to model the relationship. Key findings highlight the significance of cooperative behaviors, shared planning, and flexible arrangements in driving performance and buyer satisfaction. The review also identifies limitations, such as the cross-sectional nature of the data and the absence of longitudinal observations, which restricts the understanding of trust development over time. The study concludes that while supplier performance is a major determinant of buyer satisfaction, joint responsibility doesn't significantly impact buyer outcomes. The review suggests that future research should adopt a longitudinal case study approach to further explore the interplay between trust and cooperation in buyer-supplier relationships. The report also examines the limitations of the study, including the lack of longitudinal data and the inability to incorporate all relevant contingent variables, as well as the absence of a correlation between supplier trust and satisfaction.

Critical review
Name of the student
Name of the university
Author note

Contribution to the field
The aim of the author is to study the model of the relationships of the buyers and
suppliers. The paper also shows the exploratory modelling of how the trust impacts the
relationship between the buyers and the suppliers. The author used the concepts of the supply
chain management. The data used in the report is 164 dyads of the sellers and buyers which is
used as a sample from the cross section of industries which takes into account both private
and public organizations. The organizations have been selected from the membership
database of the Purchasing Management Association of Canada. The purchasing manager
was used as the key respondent of the buyer and in case of the suppliers, it was the account
manager. By using the technique of partial least square method , the predictive power of the
path analytical model of the relationship between the buyers and the suppliers can be
constructed simultaneously. The report also suggests that there is a presence of huge level of
inter organizational cooperative behaviours. The author at first provides a background of the
cooperative behaviours, trust and performance of the relationships of different buyers and
suppliers. Then the outline of the conceptual model is being discussed along with the
hypothesized relationship which is implicit in the path of the model. The results of the PLS
test models are then been discussed. Though the author tried to cover all the parts of the study
but there was absence of some parts like as the observations of the dyad was not longitudinal,
it lacked the understanding of the time used for building of trust. Also, there were presence of
many contingent variables that could not be included in the model with the given survey
design and size of the sample.
It has been found out that there is absence of any kind of correlation that is present
between the level of trust of the supplier and its satisfaction. On the other hand, high level of
trust from the buyers help the suppliers to perform better. The model also found out that
development of the flexible arrangements, sharing of the strategic plans, willingness to alter

the condition with the expectation to suit unanticipated situations were considered as the most
prevalent sources of better performance. However, when joint responsibility is developed by
the buyers and suppliers in case of problem solving does not seem to have much impact on
the buyer’s assessment of outcomes. As the model states that the most important factor of the
buyer’s satisfaction is the performance of the suppliers, therefore it can be said that the
authors aim to show the relationship between the supplier and buyer has been achieved. It has
also been found out that the performance assessment of the relationship of the seller is related
to the level of shared planning. The report also showed that the joint responsibility is not at
all related to the satisfaction of the buyer or the assessment of the relationship’s performance
although it was expected that the joint responsibility would have a positive relation between
the suppliers and the buyers.
Approach used and the review of the report
The approach that is made in the report is mainly based on the4 analytical framework.
The report analyses the theory. The modelling technique that is used in the report is the
partial least square modelling technique because it is usually used for testing the strength of
the individual component relationship instead of finding the overall fit of the proposed model.
Therefore, PLS is one of the useful models which is used for predictive purposes in cases
when the theory is not being fully developed. The results which comes out after regression is
valid as the technique of PLS had been used. The value of R2 for joint responsibility is shown
as 0.277and for the flexibility in arrangement it is known to have 0.288. although it has been
found out that all the cooperative behaviours do not have a significant relationship to the
outcomes of the buyer’s assessment. The regression shows that the planning that is shared is
loaded o performance and its flexibility in arrangement have a significant impact on both
satisfaction and performance. Although he joint responsibility did not showed any kind of
significant effect. The buyer’s satisfaction of R2 of 0.436 was driven both by flexibility of

arrangement and through performance assessment. Therefore, it can be said that the shared
planning and the flexibility in arrangement were highly related to the assessment of the
outcomes of the buyers. The author also examines the cooperative behaviours were related to
anyone performance dimension as opposed by the buyer’s assessment of performance. The
model also states that the major determinant of the satisfaction of the satisfaction of the buyer
is the performance of the supplier. The satisfaction of the purchasing manager is dependent
on some relationship aspect which is generally not reflected in the report. The research
therefore, specifically highlights the importance of trust building with suppliers with buyers
plan to the level of scope along with the cooperative activity. It also showed that with the rise
in cooperative behaviour there is an increase in the satisfaction of the buyer firms. The
evidence used for showing the results is quite effective in supporting the arguments. The
conclusion that has been drawn is that the generalized finding is much in contrast with the
exemplar industries such as an automotive field or on such industries which is used for
research design purposes. The supplier involvement which leads to positive outcomes is the
function of the trust of the buyer’s firm. However, there were presence of some limitations in
the cross-sectional study of the concept. As the observations used for the 164 dyads were not
longitudinal and so there was a lack of understanding. As the mail survey methodology is
used there was an absence of an access for rich interaction of the events that helps in
producing perceptions in the score of the measures. The third limitation was that there was
presence of many con6tingent variables tat cannot be put into the model with the given
practicalities survey instrument size and design. The study also showed a surprising result
that the joint responsibility does not appear to be related to the buyer’s satisfaction . The
cross-sectional sample which is used in the report takes into account a wide variety of
industries. There is also presence of other situations which shows the contingent nature of the
cooperation of buyer and supplier. Though the cross-sectional data shows that high level of

trust is associated with the presence of the cooperative behaviours although it cannot show
how the relationships changes with time. The study shows that the median age of the
relationship between the buyers and suppliers were found to be more than five years. As it
was claimed that the trust building moves matures as its ages, however it has been found out
that there was present of no significant difference in the result of new relationship and the old
relationship. The result can be present because the level of trust might be already established.
An arrangement which is highly cooperative which is present between the buyers and the
sellers.
Therefore, the interplay of the cooperative behaviour and the trust development
cannot be established through this data.
Conclusion
Further research can be done using a case study approach that is longitudinal in nature
to show the pattern of trust and cooperation over time. The style of writing is quite simple
and is suitable for academic experts. There is also presence of several other antecedents
which is used for successful promotion of the cooperative behaviours. On of the factors is the
belief of the supplier in the likelihood of the successful promotion of the cooperative
behaviour which had a small impact on the amount of buyer supplier activity developed. The
author intended to write the report mainly for academia. However, the study in the end shows
developing the trust of the supplier is not only the factor that affects the cooperative
behaviour of the suppliers.

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