• Journal of Distribution Science
• /
• v.10 no.2
• /
• pp.29-41
• /
• 2012

This paper undertakes a conceptual review of transaction cost to broaden the understanding of the transaction cost analysis (TCA) approach. More than 40 years have passed since Coase's fundamental insight that transaction, coordination, and contracting costs must be considered explicitly in explaining the extent of vertical integration. Coase (1937) forced economists to identify previously neglected constraints on the trading process to foster efficient intrafirm, rather than interfirm, transactions. The transaction cost approach to economic organization study regards transactions as the basic units of analysis and holds that understanding transaction cost economy is central to organizational study. The approach applies to determining efficient boundaries, as between firms and markets, and to internal transaction organization, including employment relations design. TCA, developed principally by Oliver Williamson (1975,1979,1981a) blends institutional economics, organizational theory, and contract law. Further progress in transaction costs research awaits the identification of critical dimensions in which transaction costs differ and an examination of the economizing properties of alternative institutional modes for organizing transactions. The crucial investment distinction is: To what degree are transaction-specific (non-marketable) expenses incurred? Unspecialized items pose few hazards, since buyers can turn toalternative sources, and suppliers can sell output intended for one order to other buyers. Non-marketability problems arise when specific parties' identities have important cost-bearing consequences. Transactions of this kind are labeled idiosyncratic. The summarized results of the review are as follows. First, firms' distribution decisions often prompt examination of the make-or-buy question: Should a marketing activity be performed within the organization by company employees or contracted to an external agent? Second, manufacturers introducing an industrial product to a foreign market face a difficult decision. Should the product be marketed primarily by captive agents (the company sales force and distribution division) or independent intermediaries (outside sales agents and distribution)? Third, the authors develop a theoretical extension to the basic transaction cost model by combining insights from various theories with the TCA approach. Fourth, other such extensions are likely required for the general model to be applied to different channel situations. It is naive to assume the basic model appliesacross markedly different channel contexts without modifications and extensions. Although this study contributes to scholastic research, it is limited by several factors. First, the theoretical perspective of TCA has attracted considerable recent interest in the area of marketing channels. The analysis aims to match the properties of efficient governance structures with the attributes of the transaction. Second, empirical evidence about TCA's basic propositions is sketchy. Apart from Anderson's (1985) study of the vertical integration of the selling function and John's (1984) study of opportunism by franchised dealers, virtually no marketing studies involving the constructs implicated in the analysis have been reported. We hope, therefore, that further research will clarify distinctions between the different aspects of specific assets. Another important line of future research is the integration of efficiency-oriented TCA with organizational approaches that emphasize specific assets' conceptual definition and industry structure. Finally, research of transaction costs, uncertainty, opportunism, and switching costs is critical to future study.

• Journal of Intelligence and Information Systems
• /
• v.24 no.1
• /
• pp.1-23
• /
• 2018

From the 21st century, various high-quality services have come up with the growth of the internet or 'Information and Communication Technologies'. Especially, the scale of E-commerce industry in which Amazon and E-bay are standing out is exploding in a large way. As E-commerce grows, Customers could get what they want to buy easily while comparing various products because more products have been registered at online shopping malls. However, a problem has arisen with the growth of E-commerce. As too many products have been registered, it has become difficult for customers to search what they really need in the flood of products. When customers search for desired products with a generalized keyword, too many products have come out as a result. On the contrary, few products have been searched if customers type in details of products because concrete product-attributes have been registered rarely. In this situation, recognizing texts in images automatically with a machine can be a solution. Because bulk of product details are written in catalogs as image format, most of product information are not searched with text inputs in the current text-based searching system. It means if information in images can be converted to text format, customers can search products with product-details, which make them shop more conveniently. There are various existing OCR(Optical Character Recognition) programs which can recognize texts in images. But existing OCR programs are hard to be applied to catalog because they have problems in recognizing texts in certain circumstances, like texts are not big enough or fonts are not consistent. Therefore, this research suggests the way to recognize keywords in catalog with the Deep Learning algorithm which is state of the art in image-recognition area from 2010s. Single Shot Multibox Detector(SSD), which is a credited model for object-detection performance, can be used with structures re-designed to take into account the difference of text from object. But there is an issue that SSD model needs a lot of labeled-train data to be trained, because of the characteristic of deep learning algorithms, that it should be trained by supervised-learning. To collect data, we can try labelling location and classification information to texts in catalog manually. But if data are collected manually, many problems would come up. Some keywords would be missed because human can make mistakes while labelling train data. And it becomes too time-consuming to collect train data considering the scale of data needed or costly if a lot of workers are hired to shorten the time. Furthermore, if some specific keywords are needed to be trained, searching images that have the words would be difficult, as well. To solve the data issue, this research developed a program which create train data automatically. This program can make images which have various keywords and pictures like catalog and save location-information of keywords at the same time. With this program, not only data can be collected efficiently, but also the performance of SSD model becomes better. The SSD model recorded 81.99% of recognition rate with 20,000 data created by the program. Moreover, this research had an efficiency test of SSD model according to data differences to analyze what feature of data exert influence upon the performance of recognizing texts in images. As a result, it is figured out that the number of labeled keywords, the addition of overlapped keyword label, the existence of keywords that is not labeled, the spaces among keywords and the differences of background images are related to the performance of SSD model. This test can lead performance improvement of SSD model or other text-recognizing machine based on deep learning algorithm with high-quality data. SSD model which is re-designed to recognize texts in images and the program developed for creating train data are expected to contribute to improvement of searching system in E-commerce. Suppliers can put less time to register keywords for products and customers can search products with product-details which is written on the catalog.

• Korean Journal of Agricultural Science
• /
• v.15 no.2
• /
• pp.143-152
• /
• 1988

This study was conducted to obtain basic data which affected engine performance of the power tiller being widely used in the rural area. Among the various factors affected engine performance, only flywheel weight was considered as the major factor in this study. Fuel consumption ratio, motoring loss, torque, vibration and mechanical efficiency of the engine tested were measured and analyzed on the four levels of flywheel weight (32.2, 29.7, 26.4, 24.2 kg). The results obtained were as follows: 1. The maximum output of 6 and 7.5 kW engine was 7.43 kW and 7.85 kW respectively. When flywheel weight was reduced from 32.2 kg to 24.2 kg, output power of the engine was increased 0.27 kW in 6 kW engine and increased 0.39 kW in 7.5 kW engine. 2. The fuel consumption ratio was decreased from 300.8 to 296.8 g/kW-hr in 6 kW engine and decreased from 313.6 to 312.8 g/kW-hr in 7.5 kW engine when the flywheel weight was reduced from 32.2 kg to 24.2 kg. 3. The mechanical efficiencies of the engine was increased from 76.1 to 76.8% in 6 kW engine and increased from 76.7 to 77.0% in 7.5 kW engine when the flywheel weight was reduced from 32.2 kg to 24.2 kg. 4. When the flywheel weight was reduced from 32.2 kg to 24.2 kg, a tendency of a little decrease of vibration at X- and Z-axis in 6 kW engine and of a little increase of vibration at Y-axis in 6 kW engine and all directions in 7.5 kW engine was observed. 5. Motoring losses was decreased from 2.33 to l.76 kW in 6 kW engine and decreased from 2.46 to 1.84 kW in 7.5 kW engine when the flywheel weight was reduced from 32.2 kg to 24.2 kg. From the above results and the flywheel weight calculated theoretically, it was recommendable that the flywheel weight should be reduced about 7 kg in 6 kW engine and about 10 kg in 7.5 kW engine, respectively.

• The Korean Journal of Nuclear Medicine Technology
• /
• v.13 no.1
• /
• pp.77-81
• /
• 2009

Purpose: The PET of the PET/CT (Positron Emission Tomography/Computed Tomography) quantitatively shows the biological and chemical information of the body, but has limitation of presenting the clear anatomic structure. Thus combining the PET with CT, it is not only possible to offer the higher resolution but also effectively shorten the scanning time and reduce the noises by using CT data in attenuation correction. And because, at the CT scanning, the contrast media makes it easy to determine a exact range of the lesion and distinguish the normal organs, there is a certain increase in the use of it. However, in the case of using the contrast media, it affects semi-quantitative measures of the PET/CT images. In this study, therefore, we will be to establish the reliability of the SUV (Standardized Uptake Value) with CT data correction so that it can help more accurate diagnosis. Materials and Methods: In this experiment, a total of 30 people are targeted - age range: from 27 to 72, average age : 49.6 - and DSTe (General Electric Healthcare, Milwaukee, MI, USA) is used for equipment. $^{18}F$- FDG 370~555 MBq is injected into the subjects depending on their weight and, after about 60 minutes of their stable position, a whole-body scan is taken. The CT scan is set to 140 kV and 210 mA, and the injected amount of the contrast media is 2 cc per 1 kg of the patients' weight. With the raw data from the scan, we obtain a image showing the effect of the contrast media through the attenuation correction by both of the corrected and uncorrected CT data. Then we mark out ROI (Region of Interest) in each area to measure SUV and analyze the difference. Results: According to the analysis, the SUV is decreased in the liver and heart which have more bloodstream than the others, because of the contrast media correction. On the other hand, there is no difference in the lungs. Conclusions: Whereas the CT scan images with the contrast media from the PET/CT increase the contrast of the targeted region for the test so that it can improve efficiency of diagnosis, there occurred an increase of SUV, a semi-quantitative analytical method. In this research, we measure the variation of SUV through the correction of the influence of contrast media and compare the differences. As we revise the SUV which is increasing in the image with attenuation correction by using contrast media, we can expect anatomical images of high-resolution. Furthermore, it is considered that through this trusted semi-quantitative method, it will definitely enhance the diagnostic value.

• Journal of Nutrition and Health
• /
• v.49 no.6
• /
• pp.495-505
• /
• 2016

Purpose: This study was conducted to investigate and analyze the association between stress from shift and non-shift work as well as the effects living habits have on eating habits in order to identify why and how workers can improve their health and form proper eating habits for higher working efficiency. Methods: The subjects of this study were 361 workers from K manufacturing company from April 7 to 11, 2014 and they were surveyed using a questionnaire. The subjects were divided into two groups according to working pattern: shift workers (n = 216) and non-shift workers (n = 110). Results: In the general characteristics, there were significant differences in age, work career, work time, marriage, monthly income, and education levels between the two groups. For healthy behaviors, significant differences in subjective health status, moderate physical activity, drinking, smoking, and sleep time were observed between shift workers and non-shift workers. For eating habits, scores of non-shift workers having a regular mealtime, balanced meal composition, and vegetable and seaweed intakes were significantly higher than those of shift workers. The sum score of dietary habits in non-shift workers was also significantly lower than that in shift workers (p < 0.05). Total job stress score did not significantly differ between the two groups. Conclusion: The sum of eating habit scores according to work types was $16.1{\pm}0.6$ in non-shift workers and $14.0{\pm}0.3$ in shift workers. These results suggest that it is necessary to provide food suitable to characteristics of different workers according to work type which should be provided along with daily nutrition counseling to help subjects recognize their status.

• Korean Journal of Agricultural Science
• /
• v.3 no.1
• /
• pp.39-51
• /
• 1976

As an accempt to increase thc efficiency of land use and the food production to achieve the national goal in the food self-sufficiency, nine cropping systems on the upper-land were examined in pure-stand and in mixtures of soybean, corn, potato and radish. The important conclusions of this study were summarized as follows; 1. The flowering date of soybean was two or three days earlier in pure-stand than in the mixture with corn. The maturing date two days earlier in the pure-stand than in the mixture with corn. The flowering and maturing dates were not different among various cropping systems in corn. 2. The stem length of soybean was significantly different among various cropping systems. Soybean in pure-stand was shorter in stem length than with corn. 3. The number of pods per soybean plant did not give any significant differences among various cultivation methods. 4. The length of internode and the number of nodes per soybean plant in the mixture with corn were greater than in the pure-stand. In the number of branches per plant this was reversed. 5. The average stem dry weight of soybean per 10a was not significantly different among various cultivation methods. 6. The soybean yield per 10a in the pure-stand was obviously greater than the mixture and there were significant differences among cultivation method within the mixture with corn in soybean yield. 7. The 1,000-grain weight of soybean was significantly different and those in the pure-stand was heavier than those in the mixture with corn. 8. Grain weight per soybean plant and the stem diameter in the pure-stand were significantly lesser than those in the mixture with corn. 9. In the comparisons of corn in the pure-stand and in the mixture with soybean, plant height, number of ear per 10a, mean ear weight and remember of grain per plant, 100-grain weight, ear length, ear girth and number of ear pel plant were not significantly different among various cultivation methods except for the grain yield per 10a. 10. In the economic analysis, the mixture with soybean and corn gave the greatest gross income. The combination 7 was the best which was 47.6% increase income comparing with the soybean pure-stand. 11. As it can be assumed, soybean plant was influenced greatly than corn by various cropping system. It is necessary to study more complex cropping system finding and giving more desirable multiple cropping system for the farmer.

• MISULJARYO - National Museum of Korea Art Journal
• /
• v.104
• /
• pp.70-100
• /
• 2023

The celadon made in the Goryeo era, a time when Buddhism was flourishing in Korea, naturally contains many elements of Buddhist culture. Among them, inlaid celadon with Sanskrit inscriptions bears a close relationship with esoteric Buddhism. However, the research on deciphering the Sanskrit inscriptions has made little progress due to the small number of extant examples. However, the four recent excavations at the No. 23 kiln site in Sadang-ri, Gangjin have yielded new materials that allow the existing materials to be categorized into several types. The results obtained through the reading and interpretation of the inscriptions are as follows: First, the Sanskrit characters inlaid on the celadon were parts of mantras. Inscriptions where only one character is apparent cannot be deciphered, but scholars have revealed that others are written in the manner of a wheel mantra represent the "Mantra for Purifying the Dharma-Realm," "Six-Syllable Mantra of the Vidyaraja," "Sweet Dew Mantra," "Jewel Pavilion Mantra," "Mantra of the Savior Bodhisattva," "Dharani of the Mind of the Budha of Infinite Life," and "Mantra for Extinguishing Evil Rebirth." Each mantra was written in Siddham script. Second, they are believed to have been produced during the thirteenth and fourteenth centuries based on the arrangement of the inscriptions and the way the "Sweet Dew Mantra" is included in the "40 Hands Mantra." In particular, the celadon pieces with a mantra inlaid in a concentric manner are dated to the late thirteenth and early fourteenth centuries based on their production characteristics. Third, the interpretation of the inlaid mantras suggests that they all refer to the "Shattering Hell" and "Rebirth in the Pure Land." Based on this, it can be concluded that some of these inlaid celadon wares with mantras may have been used in Buddhist rituals for the dead, such as the ritual for feeding hungry ghosts (施餓鬼會). Also, because the Sadang-ri No. 23 kiln site and the "ga" area of the site are believed to have produced royal celadon, it is likely that these rituals were performed at the royal court or a temple under its influence. Fourth, this inlaid Goryeo celadon with Sanskrit mantras was not a direct influence of the ceramics of Yuan China. It emerged by adopting Yuan Chinese Buddhist culture, which was influenced by Tibetan Buddhism, into Goryeo Korea's existing esoteric practices. Fifth, the celadon wares inlaid with a Sanskrit mantra reveal a facet of the personal esoteric rituals that prevailed in late Goryeo society. Changes in esotericism triggered by the desire for relief from anxieties can be exemplified in epitaph tablets and coffins that express a shared desire for escaping hell and being born again in paradise. Sixth, the inlaid celadon with Sanskrit mantras shares some common features with other crafts. The similarities include the use of Siddham Sanskrit, the focus on Six-Syllable Mantra of the Vidyaraja, the correspondence with the contents of the mantras found on Buddhist bells, wooden coffins, and memorial tablets, and their arraignment in a similar manner with rooftiles. The major difference between them is that the Mantra for Extinguishing Evil Rebirth and the Sweet Dew Manta have not yet been found on other craftworks. I believe that the inscriptions of Sanskrit mantras are found mainly on inlaid celadon vessels due to their relatively low production cost and efficiency.

• KOREAN JOURNAL OF CROP SCIENCE
• /
• v.4 no.1
• /
• pp.31-71
• /
• 1968

To clarify the breeding behavior of the hybrids between tropical and temperate area rice varieties, investigations were made on heading days and grain sterility. In this study, crosses were made in half way diallel involving 7 varieties: 2 photoperied sensitive Indicas, 2 less sensitive intermediate Indicas, 1 Ponlai Japonica and 2 high temperature sensitive Japonicas. The parents and $F_1$s were grown under 10 hours and 14 hours daylength controlled conditions at both IRRI(International Rice Research Institute, N$14^{\circ}$17') and Suwon(N$37^{\circ}$16'). F2s with their parents were grown at IRRI in the short day season, and at Suwon under natural conditions. Fa lines with their parents were grown at Suwon under natural conditions. Observations were made for heading days and sterility. The results are summarized as follow; 1. Heading days : 1. For the $F_1$s, earliness showed dominance or overdominance to lateness under the 10 hours condition, and dominance or partial dominance under the 14 hours conditions, at both IRRI and Suwon. 2. For the $F_2$s grown at IRRI during the shortday season earliness appeared to be dominant over lateness and segregation was not distinct and continuous. In the early season culture of $F_2$s at Suwon earliness showed partial dominance or was intermediate. In the proper season culture of $F_2$s lateness showed partial dominance or was intermediate. 3. In the combinations between late parental varieties which do not head at Suwon, transgressive segregants bearing effective panicles were obtained. 4. The crosses of parental varieties having long basic vegetative growth duration showed bigger variance in heading days, and significant correlation was found between of parental varieties and the mean coefficient of variance for parental arrays. 5. The means of heading days of F2 populations were significantly correlated with those of $F_1$ or mid-parents. The means of F 8 lines were also highly correlated with the means of $F_2$s, but, the means of $F_3$ lines grown at Suwon and of their parental $F_2$ individual, grown at IRRI were not correlated. 6. A faint heritability was calculated from the regression of $F_3$ lines grown at Suwon on the $F_2$ individuals grown at IRRI for most combinations, especially in the combinations involving shortday sensitive varieties. This implies low efficiency for the selection of heading days of $F_2$ individuals at IRRI to be grown in lines at Suwon. 7. No significant reciprocal effects were measured for $F_1$ and $F_2$ mean heading days. 8. Partitioning the observed photoperiod sensitivity. into two components, parental array mean md the deviation from this array mean, the parental photoperiod sensitivity contributing to the hybrids was measured in terms of general and specific combining ability for photoperiod sensitivity. 9. The photoperiod sensitivity of $F_1$s was higher than that of the parents, and it decreased as the generation progressed in most combinations of tested varieties. 10. The response of heading days to difference of temperature was weaker for $F_1$ hybrids than for the parents. The differences of temperature responses between the longday and shortday treatments were specific for the variety. 2. Sterility : 1. The $F_1$ sterility was specific for the combinations and not correlated to the parental sterility. The sterility of $F_1$s grown under the 10 hours condition was higher than of those grown under 14 hours. These results were the same at both locations, IRRI and Suwon. 2. The high sterile combinations in $F_1$ showed high sterility in $F_2$. The combinations between a high photoperiod sensitive variety and a high temperature sensitive variety showed high sterility and wider variance. 3. The mean sterility of $F_2$s was lower than of $F_1$s and the mean of $F_3$ lines was lower than of $F_2$s. Sterility decreased as the generation progressed, and the differences of $F_3$ sterility of different combinations were not significant. 4. A faint correlation between grain sterility and pollen sterility was observed in $F_2$ populations. 5. No significant reciprocal effects were measured in $F_1$ and $F_2$ sterility. 6. Following Griffing's method, specific combining ability effects were higher than general combining ability effects, especially in the combinations between highly photoperiod sensitive varieties and highly temperature sensitive varieties. 7. No distinct correlations were found between $F_2$ individual sterility grown at IRRI and $F_3$ line sterility grown at Suwon. 8. No distinct correlations were observed between heading days and sterility of $F_2$ individuals.

• Korean small business review
• /
• v.32 no.2
• /
• pp.209-223
• /
• 2010

Korea's business is composed of a few large-sized enterprises (which can be abbreviated as LSE) and a majority of small-sized enterprises (SSE). Although there has been a growing recognition of the need for the development of medium-sized enterprises (MSE) which can serve as a link between SSE and LSE, as yet there has not yet been a consensus on the definition, characteristics and the function of the MSE in Korea. Nowadays, the world is being globalized, and Japan and China are in competition to ne a great economic power. While East Asia is experiencing rapid changes, promoting MSE which can secure flexibility and efficiency through covering up the limitation of LSE and SSE is needed in order to respond the global market which is being specialized. The features of MSE in Japan can be listed as follows. First, the MSE in Japan is developing the company through getting into niche markets which are hard for major companies to enter rather than developing markets in order to compete against major companies directly. While MSEs are endeavoring to build the business firmly in the domestic market, they can possess special and competitive technical skills through trials and errors; so that they can get a chance develop their business through independent business system rather than putting their effort to compete against major companies. Second, from the MSEs with competitive edge in the market, there are many contributions to the national exportation. Those MSEs produce in domestic and maintain the quality of high price products which need cutting-edge technology, while they relocate the low and middle priced goods to the country where manufacturing costs are low, so that they can maintain the price competitiveness. Third, the industrial structure in Japan is formed from dual structure between major companies and small sized companies. In other words, in Japan's industrial structure which are composed of subcontract structure, this dual structure has taken a major role of small sized companies' growth and manufacturing businesses' international competitive power. Forth, MSE in Japan adopt a strategy of putting their value on qualitative scale growth rather than quantitative scale growth. In this paper, the case of Japanese MSE is analyzed. Along with its long history of Industrialization, Japan has a corporate environment where the SSEs can develop as a MSE and later a LSE through a full-support system. Among its SSEs, there are a number of world class corporations equipped with a large domestic market, win-win cooperation with the LSEs and an independent technology development. It can also be observed that these SSEs develop into MSEs with sustainable growth potentials. This study will focus on the condition under which the MSEs of Japan have been developed, and how they have survived the competition between SSEs and LSEs. Through this study, this paper attempts to offer solutions to Korea's polarization between the SSE and LSE, while providing the basis for SSEs revitalization. In general, if both extremities phenomenon deepen between LSE and SSE, there are possible fears of occurring disutility in national economy by the monopolization of LSE. For that reason, enterprise group, which can make SSE or MSE compete LSE in some area and ease the monopoly and oligopoly problem, is needed. This awareness has been shared for ages long. Nevertheless, there is no legal definition for MSE in Japan, and there is no definition about the enterprise size or unified view of MSE between scholars, but it is defined differently by each of academical person or research institution and study meeting. For that reason, this paper will organize the definition of MSE in Japan, and then will propose the characteristics of the background which has made MSE secure competitiveness and sustainable growth in global market. This study focus on that because through this process, the positive change to the awareness of MSE can be proposed in Korea and to seek the policy direction for building institutional framework which can make SSE become MES. Through this way, the fundamentals for SSE to become MSE can be managed and some appropriate suggestions which will be able to make MSE enter the global market in the future can also be proposed. Due to these facts, this study is very important and well timed task. In a sense of this way, this study will examine the definition and role of MSE in Japan. after this examination, this study will deal with the status, special feature, and promotion policy for MSE. Through this analysis of MSE in Japan, the foundation which be able to set the desirable role model for MSE in Korea can be proposed. Also, the political implication which is needed to push ahead to contribute to creating employment and economic growth through sustainable growth of MSEs in economic system of Korea can be offered through this study. It has been found that Japan's MSE functions as an indispensable link among various industrial structures by holding a significant position in employment rate, production and value added. Although the MSEs took up less than 1% of the entire number of businesses with 2700 manufacturing firms and 7000 non-manufacturing firms, its employment ratios are about 15%, while taking about 25% of the manufacturing industry's exports. In industries such as machinery and electronics which is considered Japan's major industry, the MSEs showed a higher than average ratio of manufacturing exports and employment rate. It can be analyzed that behind Japan's advantageous industries, close and deeply knit MSEs exist. Although there are no clearly stated policies geared towards the MSEs by the Japanese government, various political measures exist such as the R&D Project and the inducement of cooperation between enterprises which gives room for MSEs to participate in the SSE policies. In relation to these findings, the following practical measures can be considered in order to revitalize Korea's MSEs: First, there is a need for a legal definition of MSE and the incentives to provide legal support for its growth. Second, if a law to support the MSEs is established, it could provide a powerful inducement for the SSE to grow as a MSE, rather than stay as a SSE. Third, there is a need for a strategy of MSEs to establish a stable base in the domestic market and then advance to the global market with the accumulated trial and error and competitiveness. Fourth, the SSE themselves need the spirit of entrepreneurship in order to make the leap to a MSE. Because if nothing is to be changed about the system on the firms that grew, and the parts of the past custom was left to be managed alone, confusion and absence of management can take place. No matter how much tax favors the government will give and no matter how much incentive there could be through the policies, there are limits for industries to higher the ability to propagate. And because of that it is a period where industries need their own innovative skills to reform their firms.

• Journal of Global Scholars of Marketing Science
• /
• v.19 no.4
• /
• pp.32-43
• /
• 2009

Trust has been studied extensively in psychology, economics, and sociology, and its importance has been emphasized not only in marketing, but also in business disciplines in general. Unlike past relationships between suppliers and buyers, which take considerable advantage of private networks and may involve unethical business practices, partnerships between suppliers and buyers are at the core of success for industrial marketing amid intense global competition in the 21st century. A high level of mutual cooperation occurs through an exchange relationship based on trust, which brings long-term benefits, competitive enhancements, and transaction cost reductions, among other benefits, for both buyers and suppliers. In spite of the important role of trust, existing studies in buy-supply situations overlook the role of trust and do not systematically analyze the effect of trust on relational performance. Consequently, an in-depth study that determines the relation of trust to the relational performance between buyers and suppliers of business services is absolutely needed. Business services in this study, which include those supporting the manufacturing industry, are drawing attention as the economic growth engine for the next generation. The Korean government has selected business services as a strategic area for the development of manufacturing sectors. Since the demands for opening business services markets are becoming fiercer, the competitiveness of the business service industry must be promoted now more than ever. The purpose of this study is to investigate the effect of the mutual trust between buyers and suppliers on relational performance. Specifically, this study proposed a theoretical model of trust-relational performance in the transactions of business services and empirically tested the hypotheses delineated from the framework. The study suggests strategic implications based on research findings. Empirical data were collected via multiple methods, including via telephone, mail, and in-person interviews. Sample companies were knowledge-based companies supplying and purchasing business services in Korea. The present study collected data on a dyadic basis. Each pair of sample companies includes a buying company and its corresponding supplying company. Mutual trust was traced for each pair of companies. This study proposes a model of trust-relational performance of buying-supplying for business services. The model consists of trust and its antecedents and consequences. The trust of buyers is classified into trust toward the supplying company and trust toward salespersons. Viewing trust both at the individual level and the organizational level is based on the research of Doney and Cannon (1997). Normally, buyers are the subject of trust, but this study supposes that suppliers are the subjects. Hence, it uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers, like buyers, are the subject of trust since transactions are normally bilateral. From this point of view, suppliers' trust in buyers is as important as buyers' trust in suppliers. The suppliers' trust is influenced by the extent to which it trusts the buying companies and the buyers. This classification of trust using an individual level and an organization level is based on the suggestion of Doney and Cannon (1997). Trust affects the process of supplier selection, which works in a bilateral manner. Suppliers are actively involved in the supplier selection process, working very closely with buyers. In addition, the process is affected by the extent to which each party trusts its partners. The selection process consists of certain steps: recognition, information search, supplier selection, and performance evaluation. As a result of the process, both buyers and suppliers evaluate the performance and take corrective actions on the basis of such outcomes as tangible, intangible, and/or side effects. The measurement of trust used for the present study was developed on the basis of the studies of Mayer, Davis and Schoorman (1995) and Mayer and Davis (1999). Based on their recommendations, the three dimensions of trust used for the study include ability, benevolence, and integrity. The original questions were adjusted to the context of the transactions of business services. For example, a question such as "He/she has professional capabilities" has been changed to "The salesperson showed professional capabilities while we talked about our products." The measurement used for this study differs from those used in previous studies (Rotter 1967; Sullivan and Peterson 1982; Dwyer and Oh 1987). The measurements of the antecedents and consequences of trust used for this study were developed on the basis of Doney and Cannon (1997). The original questions were adjusted to the context of transactions in business services. In particular, questions were developed for both buyers and suppliers to address the following factors: reputation (integrity, customer care, good-will), market standing (company size, market share, positioning in the industry), willingness to customize (product, process, delivery), information sharing (proprietary information, private information), willingness to maintain relationships, perceived professionalism, authority empowerment, buyer-seller similarity, and contact frequency. As a consequential variable of trust, relational performance was measured. Relational performance is classified into tangible effects, intangible effects, and side effects. Tangible effects include financial performance; intangible effects include improvements in relations, network developing, and internal employee satisfaction; side effects include those not included either in the tangible or intangible effects. Three hundred fifty pairs of companies were contacted, and one hundred five pairs of companies responded. After deleting five company pairs because of incomplete responses, one hundred five pairs of companies were used for data analysis. The response ratio of the companies used for data analysis is 30% (105/350), which is above the average response ratio in industrial marketing research. As for the characteristics of the respondent companies, the majority of the companies operate service businesses for both buyers (85.4%) and suppliers (81.8%). The majority of buyers (76%) deal with consumer goods, while the majority of suppliers (70%) deal with industrial goods. This may imply that buyers process the incoming material, parts, and components to produce the finished consumer goods. As indicated by their report of the length of acquaintance with their partners, suppliers appear to have longer business relationships than do buyers. Hypothesis 1 tested the effects of buyer-supplier characteristics on trust. The salesperson's professionalism (t=2.070, p<0.05) and authority empowerment (t=2.328, p<0.05) positively affected buyers' trust toward suppliers. On the other hand, authority empowerment (t=2.192, p<0.05) positively affected supplier trust toward buyers. For both buyers and suppliers, the degree of authority empowerment plays a crucial role in the maintenance of their trust in each other. Hypothesis 2 tested the effects of buyerseller relational characteristics on trust. Buyers tend to trust suppliers, as suppliers make every effort to contact buyers (t=2.212, p<0.05). This tendency has also been shown to be much stronger for suppliers (t=2.591, p<0.01). On the other hand suppliers trust buyers because suppliers perceive buyers as being similar to themselves (t=2.702, p<0.01). This finding confirmed the results of Crosby, Evans, and Cowles (1990), which reported that suppliers and buyers build relationships through regular meetings, either for business or personal matters. Hypothesis 3 tested the effects of trust on perceived risk. It has been found that for both suppliers and buyers the lower is the trust, the higher is the perceived risk (t=-6.621, p<0.01 for buyers; t=-2.437, p<0.05). Interestingly, this tendency has been shown to be much stronger for buyers than for suppliers. One possible explanation for this higher level of perceived risk is that buyers normally perceive higher risks than do suppliers in transactions involving business services. For this reason, it is necessary for suppliers to implement risk reduction strategies for buyers. Hypothesis 4 tested the effects of trust on information searching. It has been found that for both suppliers and buyers, contrary to expectation, trust depends on their partner's reputation (t=2.929, p<0.01 for buyers; t=2.711, p<0.05 for suppliers). This finding shows that suppliers with good reputations tend to be trusted. Prior experience did not show any significant relationship with trust for either buyers or suppliers. Hypothesis 5 tested the effects of trust on supplier/buyer selection. Unlike buyers, suppliers tend to trust buyers when they think that previous transactions with buyers were important (t=2.913 p<0.01). However, this study did not show any significant relationship between source loyalty and the trust of buyers in suppliers. Hypothesis 6 tested the effects of trust on relational performances. For buyers and suppliers, financial performance reportedly improved when they trusted their partners (t=2.301, p<0.05 for buyers; t=3.692, p<0.01 for suppliers). It is interesting that this tendency was much stronger for suppliers than it was for buyers. Similarly, competitiveness was reported to improve when buyers and suppliers trusted their partners (t=3.563, p<0.01 for buyers; t=3.042, p<0.01 for suppliers). For suppliers, efficiency and productivity were reportedly improved when they trusted buyers (t=2.673, p<0.01). Other performance indices showed insignificant relationships with trust. The findings of this study have some strategic implications. First and most importantly, trust-based transactions are beneficial for both suppliers and buyers. As verified in the study, financial performance can be improved through efforts to build and maintain mutual trust. Similarly, competitiveness can be increased through the same kinds of effort. Second, trust-based transactions can facilitate the reduction of perceived risks inherent in the purchasing situation. This finding has implications for both suppliers and buyers. It is generally believed that buyers perceive higher risks in a highly involved purchasing situation. To reduce risks, previous studies have recommended that suppliers devise risk-reducing tactics. Moving beyond these recommendations, the present study uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers are also susceptible to perceived risks, especially when they supply services that require very technical and sophisticated manipulations and maintenance. Consequently, buyers and suppliers must solve problems together in close collaboration. Hence, mutual trust plays a crucial role in the problem-solving process. Third, as found in this study, the more authority a salesperson has, the more he or she can be trusted. This finding is very important with regard to tactics. Building trust is a long-term assignment; however, when mutual trust has not been developed, suppliers can overcome the problems they encounter by empowering a salesperson with the authority to make certain decisions. This finding applies to suppliers as well.