• Journal of Global Scholars of Marketing Science
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• v.18 no.2
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• pp.65-88
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• 2008

Since the implementation of economic reforms in 1978, the Chinese economy grows rapidly at an average annul growth rate of 9% over the post two decades. Franchising has been widely recognized as an important source of entrepreneurial activity. Trust is important in that it facilitates relational exchanges by permits partners to transcend short-run inequities or risks to concentrate on long-term profits or gains. In the relationship between the franchisors and franchisees, trust has been described as an important source of competitive advantage. However, little research has been done on the factors affecting trust in Chinese franchisor-franchisee relationships. The purpose of this study is to investigate what factors affect the trust in the franchise system in China, and to provide guidelines and insights to franchisors which enter Chinese market. In this study, according to Morgan and Hunt (1994), trust is defined as the extending when one party has confidence in an exchange partner's reliability and integrity. We offered a conceptual model of the empirical study. The model shows that the factors affecting the trust include franchisor's supports, communication, satisfaction with previous outcome and conflict. We also suggested the franchisor's supports and communication like to enhance the franchisee's satisfaction with previous outcome, and the franchisor's supports, communication and he franchisee's satisfaction with previous outcome tend to decrease conflict. Before the formal study, a pretest involving exploratory interviews with owners from three franchisees was conducted to make sure the questionnaire was relevant and clear to the respondents. The data were collected using trained interviewers to carry out personal interviews with the aid of an unidentified, muti-page, structured questionnaire. The respondents comprised of owners, managers, and owner managers of franchisee-owned food service franchises located in Beijing, China. Even though a total of 256 potential franchises were initially contacted, the finally usable sample consisted of 125 respondents. As expected, the sampling method was successful in soliciting respondents with waried personal and firm characteristics. Self-administrated questionnaires were used for all measures. And established scales were used to measure the latent constructs in this study. The measures tapped the franchisees' perceptions of the relationship with the referent franchisor. Five-point Likert-type scales ranging from "strongly disagree" (=1) to "strongly agree" (=7) were used throughout the constructs (trust, eight items; support, five items; communication, four items; satisfaction, six items; conflict, three items). The reliability measurements traditionally employed, such as the Cronbach's alpha, were used. All the reliabilities were greater than.80. The proposed measurement model was estimated using SPSS 12.0 and AMOS 5.0 analysis package. We conducted A series of exploratory factor analyses and confirmatory factor analyses to assess the convergent validity, discriminant validity, and reliability. The results indicate reasonable overall fits between the model and the observed data. The overall fit of measurement model were $X^2$= 159.699, p=0.004, d.f. = 116, GFI =.879, NFI =.898, CFI =.969, IFI =.970, TLI =.959, RMR =.058. The results demonstrated that the data reasonably fitted the model. We also examined construct reliability and reliability and average variance extracted (AVE). The construct reliability of each construct was greater than.80 and the AVE of each construct was greater than.50. According to the analysis of Structure Equation Modeling (SEM), the results of path model indicated an adequate fit of the model: $X^2$= 142.126, p = 0.044, d.f. = 115, GFI =.892, NFI =.909, CFI =.981, IFI =.981, TLI =.974, RMR =.057. As hypothesized, the results showed that it is strategically important to establish trust in a franchise system, and the franchisor's supports, communication and satisfaction with previous outcome tend to reinforce franchisee's trust. The results also showed trust seems to decrease as the experience of conflict episodes increases. And we also noticed that franchisor's supports and communication tend to enhance the franchisee's satisfaction with previous outcome, and communication tend to decrease conflict. If the trust between the franchisor and franchisee can be established in a franchise system, franchising offers many benefits and reduces many costs. To manage a mutual trust of relationship with their franchisees, franchisor's should provide support effectively to their franchisees. Effective assistant services have direct effect on franchisees' satisfaction with previous outcome and trust in franchisor. Especially, franchise sales process, orientation, and training in the start-up period are key elements for success of the franchise system. Franchisor's support is an accumulated separate satisfaction evaluation with different kind of service provided by the franchisor. And providing support definitely can improve the trustworthy image of the franchisor. In the franchise system, conflicts of interests and exertions of different power sources are very common. The experience of conflict episodes seems to negatively relate to trust. Therefore, it is important to reduce the negative side of the relationship conflicts. Communication actually plays a broader role in reducing conflict and establish mutual trust in franchisor-franchisee relationship. And effective communication between franchisors and franchisees can improve franchisees' satisfaction toward the franchise system. As the diversification of Chinese markets, both franchisors and franchisees must keep the relevant, timely, and reliable communication. And it is very important to improve the quality of communication. Satisfaction with precious outcomes seems to positively relate to trust. Franchisors and franchisees that are highly satisfied with the previous outcomes that flow from their relationship will perceive their partner as advancing their goal achievement. Therefore, it is necessary for both franchisor and their franchisees to make the welfare of partner with effort. Little literature has focused on what factors affect the trust between franchisors and their franchisees in China. This study developed the hypotheses regarding the factors affecting trust in the transaction relationship. The results of data analysis supported the hypotheses strongly. There are certain limitations in this study. First, we may point out that some other factors missed in this study could be significantly important. Second, the context of this study, food service industry, limits its potential generalizability for all franchise systems. More studies in different categories of franchise system are needed to broaden its generalizability. Third, the model was tested empirically in a sample in Beijing, more empirical tests of the proposed model in other Chinese areas are needed. Finally, the analysis in this study was solely based on the perception of franchisees and the opinions of franchisors were not included.

• 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 Human Ecology
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• v.22 no.4
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• pp.619-635
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• 2013

The purpose of the study was to qualitatively analyze how entrepreneurs would succeed in business from the consumer perspective of entrepreneurial. In particularly, this study understood what has made the entrepreneurs do their own business, learning contextual and mediating conditions. In order to achieve the research goals, the study conducted in-depth interviews to a total of 11 entrepreneurs and based on data from the interviews, carried out a grounded theory analysis. According to the results, the successful entrepreneurship process paradigm model from the consumer perspective of entrepreneurial was observed with some central phenomenon, 'change of course', via casual circumstances as 'self-realization' and 'material value realization.' For the contextual conditions, there found 'anxiety for survival', 'organic motive', 'confidence in a market' and 'relational role element' as well. The interaction strategies consisted of 'internal capability improvement', 'internal and external activity directivity growth' and 'marketability judgement ability.' The mediating conditions were observed to be 'strategic cognition improvement' and 'growing of desire to succeed'. The analysis results reported that there were two different aspects as 'increase of stable dailiness' and 'productivity enlargement'. In terms of the core category, it was 'securing of stable dailiness and competitiveness in the market as well by developing characteristics and abilities of an individual for the life value realization.' Those results confirmed that once pleasure and satisfaction in daily life increase, the confidence of the entrepreneurs improves too, which would encourage them to continue the business.

• Proceedings of the Korean Association for Survey Research Conference
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• 2005.12a
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• pp.221-245
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• 2005

This research introduced the concept of 'alternative attractiveness' derived from the social exchange theory to the research model predicting turnover intention among salesforce. By doing so, we tried to broaden the understandings of relationship between salesperson job attitude and salesperson behavior. We collected and analysed the data from the survey on the 178 salespeople employed at the life insurance companies. We found the alternative attractiveness to be a significant antecedent of the turnover intention. Specifically, the more attractive the alternative the greater the intention of turnover. However, we also found that the salesforces are less attracted to the alternative if they are more satisfied with their jobs. Finally, this research can be a seminary work with the relational perspective for the studies of salesforce management.

• Korean Institute of Interior Design Journal
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• v.24 no.4
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• pp.3-13
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• 2015

For last decades, the interests and efforts to enhance healthcare facility users' experience is focused on improving facility environments for healing (Delvin, 2003) and servicescapes in order to meet the users' needs (Becker, 2008; Seunghee, 2011). In the emerging experience economy, customer want experiences and they're willing to pay for the experiences and memories not goods. (Pine, J. & Gillmore, J., 1999). It is important to identify what supports customer experiences and how they perceive the experiences in healthcare environments and it will provide important information for healthcare planners, managers, architects, and interior designers. This study examines the service user experience design elements from a User Experiences design perspective. It focuses on healthcare facilities as user experience elements and build up a conceptual framework that outlines service user experience design elements in healthcare facilities. Literature review and case studies were conducted to build the service user experience design elements according to affordance theory. Findings from this study shows that service user experience design elements were introduced and newly developed which can be categorized into three factors; 1) Functional experiences in the physical environments (safety, accessibility, self-directiveness), 2) emotional expression and cognitive experiences (identifiability/clarity, natural features/pleasant environment, aesthetic elements/playful space, media richness), 3) social relational experiences(closeness, privacy, communication with staff, integrated system). These service user experience design elements will help healthcare facility designers to understand what customer experiences, how they increase the satisfaction, and how they improve facilities for modeling the industry's best practices.

• Journal of the Korean Society for information Management
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• v.33 no.4
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• pp.159-174
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• 2016

In order to apply the concept of switching costs to the library context, this study aims to identify library users' perceived switching costs, develop and validate a measurement scale for switching costs. A survey involving 210 university students was performed in order to examine the influence of switching costs on the affective commitment and behavioral commitment. Library users' perceived switching costs refer to the procedural and relational costs involved in switching from one library to another. The results of this study show that two types of switching costs as well as library service satisfaction have positive influences on affective commitment, which in turn affects behavioral commitment. The theoretical and practical implications of this study are discussed.

• Journal of Distribution Research
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• v.9 no.3
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• pp.21-47
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• 2004

This study has investigated the effects of relieving and promoting factors on dissolution intention under the condition of low commitment buyer-seller relationships. Based on intensive literature reviews, eight alleviating factors (dependence, cooperation, communication, relational norms, transaction specific investments, relationship termination costs, satisfaction, and trust) and five promoting factors (opportunism, conflict, goal incongruity, attractiveness of alternatives, and unfairness) were included. A total of thirteen hypotheses were testee using data collected from a dining franchising system. Among 300 collected, 79 cases of low commitment buyer-seller relationships were analyzed. The results showed that eight out of thirteen hypotheses were supported. But five hypotheses related to the variables of cooperation, transaction specific investments, relationship termination costs, attractiveness of alternatives, and opportunism were not supported. following a detailed presentation of the analysis results, the paper concludes by discussing the academic and managerial implications of the findings.

• Journal of the Korean Home Economics Association
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• v.47 no.7
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• pp.97-107
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• 2009

This study investigated the impact of long-term relationship orientation on emotional characteristic in fashion stores and relationship characteristic between middle-aged and senior women and salespeople. This study employed survey method with questionnaire. Data were collected from 579 women who were from the age of forty to seventy. The data were analyzed using statistic methods(SPSS 15.0 and Amos 5.0) such as frequency analysis, cronbach $\alpha$, exploratory factor analysis, second-order confirmatory factor analysis, confirmatory factor analysis and structural equation modelling. The findings of this study were concluded as follows; Firstly, the income significantly affected on emotional characteristics(p < 0.01), but had no significant effect on long-term relationship orientation(p < 0.05). The higher income, the more respondents exhibited positive attitude and sensitive emotional characteristics as a sense of sight, hearing, smell, tactile and feeling to salespeople in the fashion stores. The path of structural equation was implemented as income variables $\rightarrow$ emotional characteristics $\rightarrow$ (relationship with salespeople variables $\rightarrow$ )commitment $\rightarrow$ long-term relationship orientation which turned out to be statistically significant at the 95% confidence level. Secondly, senior group(55~70yrs) was more positive relationship with salespeople compared to middle-aged group(40~54yrs). The precondition of get satisfaction and feeling of being cared from the salespeople were critical for long-term relationship orientation. The path of structural equation was carried out as age variables $\rightarrow$ relationship with salespeople variables $\rightarrow$ commitment $\rightarrow$ long-term relationship orientation which turned out to be statistically significant at the 95% confidence level.

• Asia pacific journal of information systems
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• v.20 no.3
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• pp.51-72
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• 2010

Given the extensive role of IS in everyday life and the increasing presence of women in IS users, understanding gender differences in individual technology continuance usage decisions is an important issue. Nevertheless, much of the large body of research on gender differences has just examined mean differences between women and men in terms of abilities, usage habit, and traits. Even though lots of psychology studies have shown that women, more than men, were influenced by affective factors, gender-affection-continuance use linkage has not been examined in the context of on-line shopping services. Therefore, the primary purpose of this paper is to seek to examine gender differences in terms of influence of affective factor in the context of IS continuance use. Meanwhile, IS continuance has been an important subject of study in the IT research area. To date, to explain why and how users are motivated to continue to use on-line shopping services, lots of theory-based research such as expectation-confirmation model (ECM) has been proposed. In particular, various affective factors have been proposed to explain continuance use of on-line shopping services recently. Affective factors have been regarded as essential factors for increasing relational strength and satisfaction. Several affective factors have been studied by prior IS adoption and continuance studies. Among them are enjoyment and anxiety. In IS continuance research, positive affect has been commonly and narrowly conceptualized and measured as the enjoyment which a person derives from using computers. Hence, in this study, we introduced intimacy factor, which was conceptually related to the quality of interactions and relationships in previous research. It also has been regarded as essential factors for strengthening human relationships. As a result, we have observed gender effect while examining intimacy-continuance bond. As expected based on the previous literatures, women seem to be more sensitive in affective factors. The contribution point here is that we find evidence in the context of on-line shopping services.

• Journal of the Korean Operations Research and Management Science Society
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• v.33 no.4
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• pp.13-30
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• 2008

We explore the determinants of long-term relationship between the buyer and the supplier to help suppliers develope a strategy to build long-term relationship with their buyers. Based upon an extensive literature review, we propose three droops of independent variables which may affect long-term relationship, including (a) environmental factors (product complexity, product importance, source dependence, price sensitivity), (b) relational factors(trust, commitment, satisfaction, intention of expansion), (c) operational performance(quality, delivery, cost capability, technical knowhow). The buyer's actual period of relationship with its main supplier is used as a dependent variable. Using hierarchical multiple regression analysis, we empirically test hypotheses, analysing a sample of 290 manufacturing firms in the U.S. The statistical results indicate that the buyer's source dependence, price sensitivity and the supplier's commitment play a significant role in establishing long-term relationship between the buyer and the supplier. However, the supplier's cost capability and technical knowhow in operational performance negatively affect long-term relationship in contrast with our hypotheses. Due to this controversial result, we divide the sample group Into dual sourcing and multiple sourcing environments and reconduct regression analysis in a post hoc manner. The findings show that the supplier's cost capability and technical knowhow are negatively associated with the length of relationship only in the multiple sourcing environment. The results may confirm that both parties' opportunistic behavior is more salient in the multiple sourcing environment than in the single sourcing environment.