Relationships for quality improvement in the Hong Kong-China supply chain

Manufacturers recognize that trusting, long-term relationships with suppliers can contribute to improving the quality of their products. However, developing these relationships has proved quite challenging. This study uses the theory of co-operation and competition to specify the nature of these relationships and how they can be established. Results of structural equation analyses suggest that manufacturers and suppliers who build co-operative rather than competitive or independent goals, are able to discuss quality issues open-mindedly. This open-mindedness, in turn, strengthens trust and a long-term orientation which results in quality-enhancing relationships with suppliers. Deutsch's theory of co-operation and competition, although developed largely through North American research, seems useful for understanding and developing quality supply chain partnerships in East Asia.