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

• KOREAN JOURNAL OF CROP SCIENCE
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• v.10
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• pp.1-43
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• 1971

Experiment I: The objective of this study was to know variation in some selected agronomic characters of sweet sorghum when planted in several growing seasons. The 17 different sweet sorghum varieties having various maturities, and plant, syrup and sugar types were used in this study which had been carried out for the period of two years from 1968 to 1969 at Industrial Crops Division of Crop Experiment Station in Suwon. These varieties were planted at an interval of 20 days from April 5 to August 25 both in 1968 and 1969. The experimental results could be summarized as follows: 1. As planting was made early, the number of days from sowing to germination was getting prolonged while germination took place early when planted at the later date of which air temperature was relatively higher. However, such a tendency was not observed beyond the planting on August 25. In general, a significant negative correlation was found between the number of days from sowing to germination and the average daily temperature but a positive correlation was found between the former and the total accumulated average temperature during the growth period. 2. The period from sowing to heading was generally shortened as planting was getting delayed. The average varietal difference in number of days from sowing to heading was as much as 30.2 days. All the varieties were grouped into early-, medium and late-maturing groups based upon a difference of 10 days in heading. The average number of days from sowing to heading was 78.5$\pm$4.5 days in the early-maturing varieties, 88.5$\pm$4.5 days in the medium varieties and 98.5$\pm$4.5 days in the late-maturing varieties, respectively. The early-maturing varieties had the shortest period to heading when planted from July 15 to August 5, the medium varieties did when planted before July 15 and the late-maturing varieties did when planted before June 5. 3. The relationship between the sowing date (x) and number of days from sowing to heading could be expressed in an equation of y=a+bx. A highly positive correlation was found between the coefficient of the equation(shortening rate in heading time) and the average number of days from sowing to heading. 4. The number of days from sowing to heading was shortened as the daily average temperature during the growth period was getting higher. Early-maturing varieties had the shortest period to heading at a temperature of 24.2$^{\circ}C$, medium varieties at 23.8$^{\circ}C$ and late-maturing varieties at 22.9$^{\circ}C$, respectively. In other words, the number of days from sowing to heading was shortened rapidly in case that the average temperature for 30 days before heading was 22$^{\circ}C$ to $25^{\circ}C$. It prolonged relatively when the temperature was lower than 21$^{\circ}C$. 5. There was a little difference in plant height among varieties. In case of early planting, no noticeable difference in the height was observed. The plant height shortened generally as planting season was delayed. Elongation of plant height was remarkably accelerated as planting was delayed. This tendency was more pronounced in case of early-maturing varieties rather than late-maturing varieties. As a result, the difference in plant height between the maximum and the minimum was greater in late-maturing varieties than in early-maturing varieties. 6. Diameter of the stalk was getting thicker as planted earlier in late-maturing varieties. On the other hand, medium or early-maturing varieties had he thickest diameter when they were planted on April 25. 7. In general, a higher stalk yield was obtained when planted from April 25 to May 15. However, the planting time for the maximum stalk yield varied from one variety to another depending upon maturity of variety. Ear]y-maturing varieties produced the maximum yield when planted about April 25, medium varieties from April 25 to May 15 and late-maturing varieties did when planted from April 5 to May 15 respectively. The yield decreased linearly when they were planted later than the above dates. 8. A varietal difference in Brix % was also observed. The Brix % decreased linearly when the varieties were planted later than May 15. Therefore, a highly negative relationship between planting date(x) and Brix %(y) was detected. 9. The Brix % during 40 to 45 days after leading was the highest at the 1st to the 3rd internodes from the top while it decreased gradually from the 4th internode. It increased again somewhat at the 2nd internode from the ground level. However, it showed a reverse relationship between the Brix % and position of internode before heading. 10. Sugar content in stalk decreased gradually as planting was getting delayed though one variety differed from another. It seemed that sweet sorghum which planted later than June had no value as a sugar crop at all. 11. The Brix % and sugar content in stalk increased from heading and reached the maximum 40 to 45 days after heading. The percentage of purity showed the same tendency as the mentioned characters. Accordingly, a highly positive correlation was observed between. percentage of purity and Brix % or sugar content in stalk. 12. The highest refinable sugar yield was obtained from the planting on April 25 in late-maturing varieties and from that on May 15 in early-maturing varieties. The yield rapidly decreased when planted later than those dates. Such a negative correlation between planting date(x) and refinable sugar yield(y) was highly significant at 1% level. 13. Negative correlations or linear regressions between delayed planting and the number of days from sowing to germination. accumulated temperature during germination period, number of days to heading, accumulated temperature to heading, plant height, stem diameter, stalk weight, Brix %. sugar content, refinable sugar yield or Purity % were obtained. On the other hand, highly positive correlations between the number of days from sowing to heading(x) and Brix %, sugar content, purity %, refinable sugar yield, plant height or stalk yield, between Brix %(x) and purity %, refinable sugar yield or stalk yield, between sugar content(x) and purity% or refinable sugar yield(y), between purity %(x) and refinable sugar yield and between daylength at heading(x) and Brix %. number of days from sowing to heading, sugar content, purity % or refinable sugar yield (y), were found, respectively. Experiment II: The 11 varieties were selected out of the varieties used in Experiment I from ecological and genetic viewpoints. Complete diallel cross were made among them and the heading date, stalk length, stalk yield, Brix %, syrup yield, combining ability and genetic behavior of F$_1$ plants and their parental varieties were investigated. The results could be summarized as follows: 1. In general, number of days to heading showed a partial dominance over earliness or late maturity or had a mid-value, though there were some specific combinations showing a complete dominance or transgressive segregation in maturity. Some combinations showed relatively high general or specific combining abilities in maturity. Therefore, a 50 to 50 segregation ratio in heading date could be estimated in this study and it might be positive to have a selection in early generation since heritability of the character was relatively high. 2. A vigorous hybrid vigor was observed in stalk length. A complete or partial dominant effect of long stalk was obtained. The general combining ability and specific combining ability of stalk length were generally high. Long and short stalks segregated in a ratio of 50:50 and its heritability was relatively low. 3. Except for several specific combinations, high stalk yield seemed to be partial dominant over the low yield. Some varieties demonstrated relatively high general as well as specific combining abilities. It was assumed that several recessive genes were involved in expression of this character. The interaction among regulating recessive genes was also obtained. Accordingly, the heritability of stalk yield seemed to be rather low. 4. The Brix % of hybrid plants located around mid-parental value though some of them showed much higher or lower percentage. It could be explained by the fact that such behavior might be due to partial dominance of Brix %. The varieties with, relatively higher Brix % were high both in general. and specific combining abilities. Therefore, it could be recommended to use the varieties having higher sugar content in order to develop higher-sugar varieties. 5. The syrup yield seemed to be transgressively segregated or completely dominant over low yield. Hybrid vigor of syrup yield was relatively high. No-consistent relationship between general combining ability and specific combining ability was observed. However, some cases demonstrated that the varieties with relatively higher general combining ability had relatively lower specific combining ability. It was assumed that the frequencies of dominant and recessive alleles were almost same.