• Journal of Distribution Research
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• v.15 no.3
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• pp.1-34
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• 2010

Introduction The purpose of this research is to develop overall model which involves the effect of ongoing support services by franchisor on franchisee's relationship quality(trust, satisfaction, and commitment) and business performance(financial and non-financial performance), and to investigate the relationships among trust, satisfaction, commitment, financial and non-financial performance. This study also suggests franchise business or franchise system should be based on long-term orientation between franchisor and franchisee rather than short-term orientation, or transactional relationship, and proposes the most effective way of providing on-going support services by franchisor with franchisee thru symbiotic relationship among franchisor and franchisee Research Model and Hypothesis The research model as Figure 1 shows the variables on-going support services which affect the relationship quality between franchisor and franchisee such as trust, satisfaction, and commitment, and also analyze the effects of relationship quality on business performance including financial and non-financial performance We established 12 hypotheses to test as follows; Relationship between on-going support services and trust H1: On-going support services factors (product category & price, logistics service, promotion, information providing & problem solving capability, supervisor's support, and education & training support) have positive effect on franchisee's trust. Relationship between on-going support services and satisfaction H2: On-going support services factors (product category & price, logistics service, promotion, information providing & problem solving capability, supervisor's support, and education & training support) have positive effect on franchisee's satisfaction. Relationship between on-going support services and commitment H3: On-going support services factors (product category & price, logistics service, promotion, information providing & problem solving capability, supervisor's support, and education & training support) have positive effect on franchisee's commitment. Relationship among relationship quality: trust, satisfaction, and commitment H4: Franchisee's trust has positive effect on franchisee's satisfaction. H5: Franchisee's trust has positive effect on franchisee's commitment. H6: Franchisee's satisfaction has positive effect on franchisee's commitment. Relationship between relationship quality and business performance H7: Franchisee's trust has positive effect on franchisee's financial performance. H8: Franchisee's trust has positive effect on franchisee's non-financial performance. H9: Franchisee's satisfaction has positive effect on franchisee's financial performance. H10: Franchisee's satisfaction has positive effect on franchisee's non-financial performance. H11: Franchisee's commitment has positive effect on franchisee's financial performance. H12: Franchisee's commitment has positive effect on franchisee's non-financial performance. Method The on-going support services were defined as an organized system of continuous supporting services by franchisor for the purpose of satisfying the expectation of franchisee based on long-term orientation and classified into six constructs such as product category & price, logistics service, promotion, providing information & problem solving capability, supervisor's support, and education & training support. The six constructs were measured agreement using a 7-point Likert-type scale (1 = strongly disagree to 7 = strongly agree)as follows. The product category & price was measured by four items: menu variety, price of food material provided by franchisor, and support for developing new menu. The logistics service was measured by six items: distribution system of franchisor, return policy for provided food materials, timeliness, inventory control level of franchisor, accuracy of order, and flexibility of emergency order. The promotion was measured by five items: differentiated promotion activities, brand image of franchisor, promotion effect such as customer increase, long-term plan of promotion, and micro-marketing concept in promotion. The providing information & problem solving capability was measured by information providing of new products, information of competitors, information of cost reduction, and efforts for solving problems in franchisee's operations. The supervisor's support was measured by supervisor operations, frequency of visiting franchisee, support by data analysis, processing the suggestions by franchisee, diagnosis and solutions for the franchisee's operations, and support for increasing sales in franchisee. Finally, the of education & training support was measured by recipe training by specialist, service training for store people, systemized training program, and tax & human resources support services. Analysis and results The data were analyzed using Amos. Figure 2 and Table 1 present the result of the structural equation model. Implications The results of this research are as follows: Firstly, the factors of product category, information providing and problem solving capacity influence only franchisee's satisfaction and commitment. Secondly, logistic services and supervising factors influence only trust and satisfaction. Thirdly, continuing education and training factors influence only franchisee's trust and commitment. Fourthly, sales promotion factor influences all the relationship quality representing trust, satisfaction, and commitment. Fifthly, regarding relationship among relationship quality, trust positively influences satisfaction, however, does not directly influence commitment, but satisfaction positively affects commitment. Therefore, satisfaction plays a mediating role between trust and commitment. Sixthly, trust positively influence only financial performance, and satisfaction and commitment influence positively both financial and non-financial performance.

• KOREAN JOURNAL OF CROP SCIENCE
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• v.11
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• pp.81-97
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• 1972

Experiments and investigations were done basically and practically for the purpose of labor saving in paddy rice cultivation especially on Homizil i.e. hoeing and herbicide, 1969. 8 concrete tanks were established on the open base of Keon Kuk University for comparison of percolation, dissolved oxygen and yield test of rice in the paddy plot of tank. The dimension of the bottom of each tank is square meter. Each of the 4 of the 8 tanks is 21cm in height and each of the remaining 4 tanks is 36cm. Each tank has a system that comprises 2 sets of tubes, each of which has 20 holes of 5mm in diameter scattered every side and is covered with nylon cloth taking water in the tank. One set consists of 4 P.V.C tubes. The first set is situated 8cm below the top of the tank and the second set is located at bottom layer inside the tank. The 4 tubes of each set are combined together and led to the glass tube which protects from inside to outside. And this inside-outside glass tube is connected to the small rubber tube. Also a glass tube is set 4cm below the top of the tank. Paddy loam was filled on sand in each of the tanks in the soil depth of either 15cm or 30cm. The depth of sand was 5cm in the soil depth of 15cm and 10cm in the soil depth of 30cm. (Fig. 1, 2 and 3). The paddy rice was grown in the tank. The percolation of water, the dissolved oxygen and the yield of rice were observed in the tank. And the dissolved oxygen was detected by Winkler method. A sandy paddy field of heavy percolation was selected at the field of the National Agricultural Material Inspection Center in Seoul. It was divided into 9 plots. These plots were given 3 treatments: (A) not hoeing, (B) hoeing one time and (C) hoeing two times. These treatments were replicated 3 times along the latin square design. The paddy rice was grown and sprayed with Stam F-34 in the all plots for the purpose of killing weeds before hoeing. The two types of paddy of field i.e. one for normal percolation and the other for ill drainage were selected at Iri Crop Experiment Station, Jeonla-Bukdo. Each field was divided into 24 plots for 8 treatments. They are: (A) not hoeing; (B) hoeing one time; (C) hoeing two times; (D) not hoeing but treating with herbicide, Pamcon; (E) hoeing one time and weeding two times also treating with herbicide, Pamcon; (F) hoeing two times and weeding one time a], o treating with herbicide, Pamcon; (G) hoeing two times and weeding two times also treating with herbicide, Pamcon, ; (H) usual manner. The labor hours and expenses needed for weeding in the paddy by hoeing were investigated in a farmer at Suwon and the price of herbicide and the yield of rice were taken out at Iri, Jeonla-Bukdo. The results obtained from the above experiments and investigations are as follows: 1. The relationship between percolation and dissolved oxygen shows that a very small amount of oxygen is detected in the soil water under 2cm below surface of earth in the paddy even when percolation is over 4.0cm per 24 hours (Tab. 1). 2. The relationship between percolation and yield of rice shows that the yield of rice increases in the percolation of 0cm and 1.5cm per 24 hours and decreases in the percolation of 2.5cm and 3.4cm in the plot of the 15cm ploughing depth and increases in the percolation of 1.4cm and 3.0cm and decreases in the percolation of 0cm and 4.0cm in the plot of 30cm ploughing depth (Tab. 1 and Fig. 5). 3. The yield of paddy weeded with Stam F-34 in the sandy field of heavy percolation in Seoul was 3.02 tons in the plot of not hoeing, 2.99 tons in hoeing one time and 3.05 tons in hoeing two times per hectare (Tab. 5). 4.1). 4. 1) The yield of rice per 10 ares in the field of normal percolation at Iri was 338kg in not hoeing, 379kg in hoeing one time, 383kg in hoeing two times, 413kg in spraying herbicide, Pamcon, and not hoeing, 433kg in spraying herbicide, Pamcon, and hoeing one time and weeding two times, 399kg in spraying herbicide, Pamcon, and hoeing two times and weeding one time, 420kg in spraying herbicide, Pamcon, and hoeing two times and weeding two times and 418kg in usual manner (Tab. 6-1). 2) The yield of rice per 10 ares in the field of ill drainage at Iri was 323kg in not hoeing, 363kg in hoeing one time, 342kg in hoeing two times, 388kg in spraying herbicide, Pamcon, and not hoeing, 425kg in spraying herbicide, Pamcon, and hoeing one time and weeding two times, 427kg in spraying herbicide, Pamcon, and hoeing two times and weeding one time, 449kg in spraying herbicide, Pamcon, and hoeing two times and weeding two times and 412kg in usual manner (Tab. 6-2). 5. 1) The labor hours for weeding by hoeing was 37.1 hours but 53.5 hours if hours for meal, smoking and so on are included, and the expenses including labor cost needed for weeding by hoeing in the paddy rice was 2, 346 Won per 10 ares at Suwon (Tab. 7). 2) The labor hours for weeding by spraying herbicide with hand sprayer in the paddy rice was about 5 hours per 10 ares at Suwon and the expenses for weeding by spraying herbicide in the paddy rice was 750 Won but 1130 Won if the loss by decrement of rice in the paddy field of ill drainage per 10 ares is calculated in estimation at Iri (Tab. 8). From these observations and investigations it is known that using of some kinds of herbicides Saves labor and expenses of weeding, almost without giving damages to the rice itself, in the field of normal or heavy percolation comparing usual manner of hoeing.

• 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.