Manufacturers recognize 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 cooperation and competition to specify the nature of these relationships and how they can be established. Results of structural equation analyses suggests that manufacturers and suppliers who build cooperative goals rather than competitive or independent 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 cooperation and competition, although developed largely through North American research, seems useful for understanding and developing quality supply chain partnerships in East Asia.
|Hong Kong Institute of Business Studies Working Paper Series