Factors Affecting Trust in Business-to-Business Relationships in the Context of Subcontracting and Offshoring

Park, Suh Young
Chan, Ricky
De Villiers, Rouxelle
Franklin, Drew
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Doctor of Philosophy
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Auckland University of Technology

Outsourcing (delegating a part of a core contract to another contractor) and offshoring (subcontracting to another unit within the same company) has become common in business. Companies utilise outsourcing to respond to fast-changing business practices and environments both effectively and efficiently. In this doctoral thesis, a new term, ‘sub-outsourcing partner’ (SOP), refers to a large company's subcontractors and offshore units. Likewise, another new term, ‘sub-outsourcing (SO), refers to subcontracting and offshoring. Suppliers utilising outsourcing face a serious issue; the relationship quality (RQ) with their customers can be influenced by the performance of SOPs. There is a large body of research on relationship marketing, but an exhaustive survey of the literature shows that research has to date focused on dyadic rather than triadic relationships. This research aims to extend the relationship marketing model for the suppliers in the sub-outsourcing context by identifying some unique antecedents of trust, as well as re-examining the impact of the established antecedents from the dyadic relationship literature.

The followings are the two key preliminary research questions: Research Question One (RQ1): Are the antecedents that have been found to affect a customer’s trust toward its supplier still important in the sub-outsourcing context?
Research Question Two (RQ2): Are there new antecedents specific to the sub-outsourcing context that can affect a customer’s trust in the supplier?

A conceptual model is first developed to form a framework to help answer the above questions, from which several possible antecedents are identified. The conceptual model is based not only on the B2B literature (which is somewhat mute concerning the SO context, as will be noted later) but also on the author’s and others’ anecdotal industry experience.

The primary study reported here is a Qualitative Comparative Analysis (QCA) study based on case studies. The data is collected from customers, suppliers, and SOPs, mainly in Korea and Australasia, by interview, then transcribed, quantified and calibrated for QCA analysis. After the analysis is performed, a simple regression analysis uses the same data and provides convergent validity for the richer, primary QCA study.

The research is expected to make a theoretical contribution by extending the traditional relationship marketing model to the increasingly prevalent sub-outsourcing context. It is also expected to contribute to business practices by providing a more formal and firmer guideline than has been hitherto available for suppliers in selecting and managing SOPs, thereby assisting them in managing their relationships with the customers better.

The research tested different cultures (Eastern vs Western) and project types (IT and non-IT) to help future studies replicate this doctoral study.

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