Explaining Relationship between Co-operative Norms and Supplier Performance

Entrepreneurship and Innovation Management Journal http://absronline.org/journals p-ISSN: 2310-0079, e-ISSN: 2311-1836 Volume: 2, Issue: 1 (February 2014), Pages: 53-64 © Academy of Business & Scientific Research

*Corresponding author: Mubashar Munir Kaleem, College of Management & Administrative Sciences, GC University, Faisalabad, Pakistan.

E-Mail: [email protected]

53

Explaining Relationship between Co-operative Norms and Supplier Performance

Mubashar Munir Kaleem1*, Imran Shafique2, and Afshin Ardebili3

1. College of Management & Administrative Sciences, GC University, Faisalabad, Pakistan.

2. Department of Administrative Studies & Politics, University of Malaya, Kuala Lumpur, Malaysia.

3. University of Putra Malaysia, Malaysia.

The purpose of this research is to investigate the relationship between cooperative norms and performance of supplier. We posited that cooperative norms exert their affect on supplier performance by the establishment of two structural mechanisms (informational and operational linkages) in supplier-buyer relationship. Multiple regression analysis was used for the analysis of data from 59 respondents from Pakistani manufacturing firms. The results show that (1) cooperative norms have a significant positive and direct effect on supplier performance, and (2) structural mechanisms do not play any mediating role in relationship between cooperative norms and supplier performance. (3) Cooperative norms have a significant and positive effect on informational linkages. (3) The informational linkages have positive effect on operational linkages.

Keywords: cooperative norms, supplier performance, social capital theory, structural mechanisms,

INTRODUCTION

In present unstable business world, organizations have know the increasingly significance of supply chain (Kalyar, Sabir & Shafique, 2013). Through research and experiences it is realized that effectiveness of supply chain depends on the cooperation of its participants. Supply chain management needs collaboration among buyers and suppliers (Johnson et al., 2004; Wagner and Johnson, 2004). To stay competitive in the cut-throat competition, participants of supply chain-specially buyer and supplier-have put many strategies into practice like, just in time, development of suppliers, including suppliers in the planning process and many others which need the cooperation of the buyers and suppliers (Dong et al., 2001). According to Cai et al. (2009) before we check the cooperation level of the supply chain

members we have to check forces that influence the companies to help and collaborate with each other and we also have to check that up to which level they affect the outcome of supply chain. To check these forces which are forcing the participants of supply chain to collaborate and cooperate, researchers have applied the concept of cooperative norms in the relations which are established between buyer and supplier (Cai and Yang, 2008). The norms basically are the rules of behavior projected from the people. Norms also control, direct and make an order of behaviors which is accepted in the group or society. While putting this concept in the organizations, cooperative norms are the beliefs which are shared by the participants. They also specify that these participants have to combine their effort and work

Relationship Between Co-operative Norms and Supplier Performance Kaleem et al.

54

with each other to accomplish desired common goals or objectives (Canon and Perreault, 1999; Johnson, 2006). This paper discovers the effects of cooperative norms on outcomes of the supplier and buyer relationship. This paper also tests in detail direct and indirect effect of cooperative norms on the outcomes. The effect of cooperative norms has also been accounted through operational and informational linkages. Social capital has three types, relational, cognitive and structural capital (Krause et al. 2007). Many researchers have stated in their findings that relational capital increases the productivity of supply chain participants (Lawson et al. 2008). Cooperative norms are the major part of relational capital which further leads to the social capital, and social capital has a positive impact on the performance of supply chain participants. According to (Canon et al. 2000) there is positive relationship among cooperative norms and the performance of parties involved. The research on this topic is still at nascent stage, that in which way cooperative norms place their impact on the outcomes of supply chain participants. In the early research it is revealed that social capital produces many benefits, such as cut down the cost of supply chain, increase flexibility, reduction in the time of developing new products (Krause et al., 2007; Cousins et al. 2008). Griffth and Myers in (2006) have argued that cooperative norms encourage the cooperative behavior among people, it can provide flexibility, can increase support for members of the group and also helps in exchange of information that will ultimately increase the outcomes of the supply chain. According to many other researchers cooperative norms can affect the outcomes by another way that is through operational and informational linkages. Informational linkages comprises that how much information is shared between two parties and operational linkages means that how much processes, procedures and operations are established to enhance the business outcome. They argue that cooperative norms will build a strong relationship between the parties which will further help to enhance their internal outcomes (Zhou et al., 2008). According to Nahapiet and Ghoshal Cooperative norms provide help to the set up inter-organizational mechanisms which are reason to enhance exchange outcomes. We call these inter-

organizational mechanisms the “structural mechanisms” because they are the building blocks of it and include network ties which make us able to contact with resources. This paper posits that cooperative norms have positive relationship with operational and informational linkages that are the part of structural mechanism and they further affect the outcomes of supplier. Wagner (2006) evaluated the supplier performance on the basis of quality of product, timely deliveries, matching with the cost of buyers which they have targeted, providing supporting services and also provision of technical support. If one succeeds in achieving these approaches then he will be able to meet the buyer’s expectations and these approaches will also help him to stay competitive at his strategy. The model which has been used in this research provides greater understanding to the relational and structural capitals and will highlight their impacts on the outcome too. The research problem which we have selected is very important because there are multiple views of different researchers about cooperative norms; some argue that cooperative norms directly influence the outcome while others claim that they have an indirect affect on the outcomes of the parties involved. There is direct link among supplier performance and cooperative norms (Canon et al., 2000). Supplier performance is indirectly affected by cooperative norms and they affect with structural mechanisms which come into existence due to relationship among buyer and supplier. Later on related review of literature is discussed and hypotheses are mentioned clearly. After that methodology used and statistical analysis are described. At the end results and their implications, conclusion of this research, limitations accounted for and further research instructions are included.

LITERATURE REVIEW

Social capital theory According to this theory social capital is an important asset which supports availability of resources through social relationships (Nahapiet and Ghoshal, 1998). Social capital has been studied in two levels, firstly at individual and secondly at supply chain (Cousins et al., 2006; Inkpen and

Entrep. innov. manag. j. p-ISSN: 2310-0079, e-ISSN: 2311-1836 Volume: 2, Issue: 1, Pages: 53-64

55

Tsang, 2005). The vital contribution is by Naphiet and Ghoshal (1998) in the social capital theory. According to them there are three kinds of social capital, which are (1) structure capital, (2) Relational capital and (3) Cognitive capital. (1) Structural capital presents the social capital which is result of overall model of relations among the parties. (2) Relational capital holds social relationships which are results of multiple interactions in the history between parties. (3) Cognitive capital contains resources which give joint representation, organization of meanings among parties, and interpretations. Naphiet and Ghoshal (1998) stated the major difference between structural capital and Social capital: structural capital focuses on configuration of impersonal linkages among units and people where as social capital focuses on assets produced and influenced by the personal dealings over a longer period of time. They clarified that cooperative norms are the major part of social capital. While structural mechanisms are related to the linkages which are created between organizations for facilitating cooperation. When we try to relate performance with social capital, earlier research has put their focus on effects of relational capital in opposition to structural capital. Moran (2005) introduced concept at individual level and states structural and relational capital as structural and relational embeddedness. The results of his research conclude that relational capital increases innovation related tasks rather than structural embeddedness increase routine and execution tasks. Lawson et al. (2008) also has said that structural and relational embeddedness increases the performance of supplier. These studies and many other studies by different researchers have failed to check potential relationship among structural and relational capital (Nahapiet, 1998; Inkpen, 2005). So this paper tries to identify any relationship among these types of social capital, and also to highlight resulting issues by examining key constructs of this paper.

Cooperative norms It has been described earlier in this research that cooperative norms can be defined as the mutual interests and the expectations of buyer and sellers

on each other about cooperation. These norms basically help to organize and increase the relationship among buyer and supplier (Macneil, 1980). Cooperative norms help to tackle misunderstandings that occur in exchange considerations between two parties (Popo and Zenger, 2002). Cooperative norms are the base for relational ties among parties. These relational ties help parties to have friendly feelings or environment among themselves. These ties are developed by repeat transactions, frequent dealings and value sharing (Zhou et al. 2008). Cooperative norms reproduce and strengthen the hopes of both parties to mutual work for achieving more and meeting their aligned objectives while avoiding personal interests (Baker et al., 1999; Cannon and Perreault, 1999). Relational ties among buyer and supplier create the base for network ties at supply chain stage which are further structural capital’s major part (Inkpen and Tsang, 2005; Nahapiet and Ghoshal, 1998). Network resources have three major forms (Gnyawali & Madhavan, 2001) which can be transferred by network ties. (1) Information, that includes data gathered from buyer and sellers firms regarding their resources and strategies. (2) Assets, that involves money, technology, organizational and equipment skills. (3) Status involves power and recognition conveyed through firms with high status to firms with low status. This research focuses on network ties which involve relationship of both parties and how these relationships are affected by cooperative norms. According to Gnyawali and Madhavan’s (2001) if buyer and supplier are at same status in the relationship then flow can be of three type status, asset and information. Status flows do not occur for all time so it will not be part of our discussion. So we propose that remaining two flows are motivated by cooperative norms which are information and asset flows. Companies build network ties to facilitate the flows by involving information and operational linkages. Asset flow is supported by operational linkages and flow of information is supported by informational linkages. These two linkages also control smooth transactions among the parties (Cannon and Perreault, 1999; Noordewier et al., 1990).


56

Structural mechanisms The word structure is connected with framework of the organization which create a support to coordination and flow of transactions among the parties. This organizational framework comprises operational and informational linkages, which allow the parties to transfer information and assets with each other. Operational and informational linkages are more strengthen when the parties have common goals, aligned processes of their business and integration of communication networks is present. Operational and informational linkages are foundation of network ties, and these network ties leads to structural mechanisms (Nahapiet and Ghoshal, 1998). So these linkages can be called as structural capital because they enhance performance of business. Informational linkages are known as how much information sharing is among the parties. The existing researchers have also admitted that informational linkages have immense importance in the business performance. Information sharing is one major element of “relationalism” (Macneil, 1980). Different types of information should be shared in buyer and supplier relationship like, forecasting and structural planning data. The information shared in relational ties should be complete, in detail, holistic and elaborated (Uzzi, 1997; McEvily and Marcus, 2005). It is also argued that information sharing is most important part of structural capital (Nahapiet and Ghoshal, 1998) which allows us efficient planning, setting goals and find solutions of problems (Lawson, 2003). Operational linkages are known as how much procedures, operations, routines and systems are established between two parties to smooth the progress of business (Cannon and Perreault, 1999). These linkages also cause relationship among the actors of the parties so these linkages are also regarded as major part of structural capital (Nahapiet and Ghoshal, 1998). Operational linkages additionally allow the participant parties to collaborate the processes among them. According to Lawson et al., (2008) the parties can work together efficiently for the solution of their problems, to get higher reliability level along with fulfilling responsibilities. By operational linkages the parties can share the resources, knowledge, equipment, technology and they also help parties

to be more flexible in their response to changes in external environmental factors. Additionally we can say that operational linkages make smooth flow of all types of transactions including monetary flow among the parties involved. HYPOTHESES It is argued in this paper that cooperative norms can affect the performance outcomes by establishing operational and informational linkages. The cooperative norms are the major part of social capital and they have a considerable impact on the outcomes of buyer and supplier relationship (Nahapiet and Ghoshal, 1998). According to Zhou et al (2008) cooperative norms creates the firmness in the exchanges which is necessary to the usefulness of relational network ties. For the accurate flow of information and assets these relational ties need the set up operational and informational linkages. Thus, we uphold that developing cooperative norms is necessary for establishing structural mechanisms. According to Nahapiet and Ghoshal (1998) relational capital as a part of social capital is a valuable source and gives informational benefits. So one can say that cooperative norms encourage sharing of information. It is revealed by previous studies that cooperative norms increase information sharing among the exchange partners. Mohar and Sohi (1995) proposed that participants exchange information more frequently when cooperative norms like information linkages exist in the relationship and it cause regular contact among them.

H1. Cooperative norms have positive effect on informational linkages. Cooperative norms also can smooth the progress of operational linkages. Norms recommend behaviors in buyer and supplier relationship. Hedge and john (1992) argued that cooperative norms help in sustaining system and relationship completely and also reduce the behaviors that are focusing on individual party’s goals. They proposed that cooperative norms assure that when a party give control to other party that second party will not cause undue vulnerability. The establishment of operational linkages leads to the handing over the decision making power among


57

the parties so the cooperative norms must be present there. Therefore we hypothesize that cooperative norms have great importance in creation of operational linkages among the parties.

H2. Cooperative norms positively affect operational linkages. We further uphold that operational linkages have an effect on the informational linkages. According to Krause et al. (2007) information sharing needs communication practices, general information and tactical knowledge sharing. For this information sharing we need operational linkages between systems and procedures (Cannon and Perreault, 1999). The procedures and systems include identification of duties of the parties involved in business transactions. Operational linkages also help the parties involved to manage the operations, organizational interactions and also information sharing. Strong operational linkages encourage interactions between individuals of the organizations and relational ties are created between them. These relational ties encourage the sharing of information, ideas and complex issues (Hensen, 1999; Levin and Cross, 2004). Krause et al. (2007) suggested that if a buyer wants to develop the supplier, the buyer should establish operational linkages with him through frequent visits on the site and involving in providing education to the employees of supplier. These operational linkages will encourage the sharing of information among parties.

H3. Operational linkages have a positive effect on information linkages. This paper tries to inspect cooperative norm’s effect on the supplier performance. It is assumed that cooperative norms exert their effect on supplier performance through establishment of informational and operational links. This argument relies on the statement by Heide and John (1992) that cooperative norms aim to structure a proficient relationship. So it is assumed that cooperative norms make relationships efficient between parties involved by the establishment of structural mechanisms, which

will result in enhancing the performance of both parties. We further assume that two structural mechanisms-operational and informational linkages-directly affect supplier performance. If our information linkages are efficient they will give benefits like, enhance quality of communication, improve commitment and cooperation, knowledge sharing, cost reductions, positive effect on activities related to supplier development, all resulting in improvement in supplier performance (Carr and Pearson, 1999; Cousins and Menguc, 2006; Krause, 1999). On the other hand operational linkages enable partners to get benefits mutually by working together (Carr and Pearson, 1999; Zaheer and Venkatraman, 1995). When companies work together they become able to solve their problems efficiently which enhance their performance. In this research supplier performance is evaluated by the viewpoint of the buyers. So it is hypothesized that:

H4. Buyer evaluation of supplier performance is positively affected by informational linkages. H5.Buyer evaluation of supplier performance is positively affected by operational linkages. All the above hypotheses proposed that cooperative norms put their effect on the operational and informational linkages directly which further affect supplier performance. Now we assume that cooperative norms have a direct effect on performance of supplier. According to Lawson et al. (2008) there is direct link among buyer performance and relational capital. Earlier researchers were unable to observe substantial relationship between structural and relational capital (Moran, 2005; Nahapiet and Ghoshal, 1998; Krause et al., 2007). It is still not clear that after checking the effect of relational capital on structural capital, can relational capital cause a direct effect on supplier performance. Canon et al., (2000) exposed a direct and positive link among the cooperative norms and the performance of supplier. It is not still clear that is there positive relationship among the performance and cooperative norms after checking the effects of cooperative norms on informational and operational linkages (Min & Mentzer, 2004;


58

Canon et al., 2000). This paper has tried to fill this gap by hypothesizing that: H6. Buyer evaluations of supplier performance are positively affected by cooperative norms. On the basis of prior discussion that cooperative norms are also expected to influence buyer evaluation of supplier performance indirectly via both informational and operational linkages. It is hypothesized that

H7. Cooperative norms indirectly effect buyer evaluation of supplier performance via informational linkages. H8. Cooperative norms indirectly effect buyer evaluation of supplier performance via operational linkages.

RESEARCH METHODOLOGY

Sample technique and method of data collection

To check the validity of the hypotheses we analyzed supplier-buyer relationship in the manufacturing firms located in Pakistan. We selected 50 firms as a sample out of all manufacturing firms currently working in the country. The firms selected are located in the Faisalabad city which is the most suitable area to conduct research on manufacturing firms. We involved the professionals directly related to procurement process and senior managers as informants for our research goals. We conducted face to face interviews to get high reliability in data collection. We informed the informants and appointments were made before, for their better cooperation and to get accurate information. The sample of selected firms was 50 but unfortunately we were unable to reach 14 of them, and from the remaining 34 firms, 16 refused to cooperate due to lack of time availability and organization policies. Finally 18 firms allowed us to get information and the professionals of these firms filled the scale developed for research. The persons from these firms were effectively interviewed by three investigators who were clear about the research objectives and the items in the scale used. Firstly we requested informants to select their major supplier with which their firm has business

in large volume, and then answer to the questions while keeping this supplier in mind. The informants include managers related to purchase procurement professionals and finally general managers. Construct measurement We selected the instrument (questionnaire) established by (cai et al., 2009) in his paper “Cooperative norms, structural mechanisms and supplier performance”. Exploratory factor analysis was used for exploration of the dimensions. We used Principal component analysis (PCA) for factor extraction in the study. When PCA is used then it is assumed that original variables are correlated and uncorrelated variables are developed in new group by PCA (Chatfeild and Collins, 1980). Three factors were excluded from the instrument having factor loading below 0.40 (Boone, Ponton, Gorsuch, 1998). When factors were identified from the principle component analysis they were tested for reliability by using Cronbach’s Alpha. The value of Cronbach’s Alpha for the entire construct was above 0.60 showing good internal consistency of the constructs. DATA ANALYSIS AND INTERPRETATIONS

After using exploratory factor analysis to test and purifying the measurement model we used Correlation analysis to check the relationship of the study’s construct. The relationship was found between cooperative norms and informational linkages (r =0.404, p<0.01). The cooperative norms were found with no relationship with operational linkages (r = 0.041, p>0.01) so hypothesis 2 was rejected. Operational linkages have found relationship with informational linkages (r=0.047, p<0.01). Our results were successful to detect relationship between informational linkages and buyer evaluation of supplier performance (r = 0.240, p< 0.01), so the hypothesis 4 was accepted. Operational linkages were found to have no relationship with buyer evaluation of supplier performance (r = -0.052, P> 0.01) so hypothesis 5 is rejected. Finally, our hypothesis 6 was supported in correlation analysis because the relationship between cooperative norms and buyer evaluation of supplier performance was found (r = 0.004, p<


59

0.01). Hypotheses 2nd and 5th were rejected in correlation analysis. The correlations are shown in table 1.

Insert table-1 here To check the nature of hypotheses 1, 3, 4 and 6 we conducted regression analysis. In regression analysis hypothesis 1 was accepted, that cooperative norms have significant and positive effect on informational linkages (ẞ=0.404, t= 3.338 and p< 0.01). Hypothesis 3, informational linkages have found positive and significant affect with operational linkages (ẞ =0.357, t= 2.887 and p< 0.01). Hypothesis 4 was rejected because informational linkages were found no significant relationship with buyer evaluation of supplier performance (ẞ =0.159, t=1.091, p>0.01). Finally, hypothesis 6 was supported with regression analysis that cooperative norms have positive and significant relationship with supplier evaluation of supplier performance (ẞ=0.307, t= 2.255 and p< 0.01). Baron and Kenny (1986) stated that following three regression equations should be estimated to test mediation: (1) Regressing mediator on the independent variable, (2) Regressing the dependent variable on the independent variable, and (3), regressing the dependent variable on both the independent variable and on the mediator. Separate coefficients for each equation should be estimated and tested. Moreover, a perfect mediation holds if independent variable has no effect on dependent variable when mediator is controlled. As our mediating variables (informational linkages and operational linkages) have no direct relationship with outcome variable (buyer evaluation of supplier performance), that’s the reason for not performing a separate regression analysis to test the indirect effects of cooperative norms on buyer evaluation of supplier performance. The data did not support our two hypotheses (7 & 8) because mediating variables (informational linkages and operational linkages) did not have any significant effects on outcome variable (buyer evaluation of supplier performance). Informational linkages and operational linkages had positive but statistically insignificant effect on BEOSP, the regression weights for both variables were

(ẞ=0.159, t=1.091 and p>0.05) and (ẞ =-.122, t=-.910 and p>0.05) respectively. The regression analyses of these hypotheses are given in table 2, 3 and 4.

Insert table 2, 3, and 4 here DISCUSSION The results of this study show that there are dynamic and complicated relationship between cooperative norms, informational linkages and buyer evaluation of supplier performance in the setting of Pakistani manufacturers-supplier relationship. The empirical findings of this paper have considerable suggestions for researchers of social capital theory and for supply chain managers. Theoretical Implications The first contribution of this paper that how cooperative norms put their effect on structural mechanisms and supplier performance. Previous researchers argued that relational outcomes are affected by cooperative norms through many structural mechanisms. But they did not check that relationship empirically (Heide and John, 1992). The results derived in this paper confirm hypothesis 1, that cooperative norms are basis for promoting informational linkages. Moreover, hypothesis 6 is supported by our results that cooperative norms have positive and direct effect on buyer evaluation of supplier performance that supports the findings of Canon et al., (2000) that exposed a direct and positive link among the cooperative norms and the performance of supplier. The norms only put their affect on supplier performance directly without any mediation of operational and informational linkages. The findings of this paper also support the Heide and John (1992) argument that cooperative norms enable companies to set up control in one another’s decision making in the relationship of supplier and buyer to increase their performance outcomes. The second contribution of this paper is that it disclosed that structural mechanisms do not play any role in the cooperative norms and supplier performance. The analysis of results rejects the hypothesis 5, that operational linkages have


60

positive relationship with supplier performance (Carr and Pearson, 1999). The finding contradicts with previous research and provides empirical result that strong operational linkages do not increase exchange outcomes. When the hypothesis 4 was analyzed the results were in the favor of previous research that there is positive relationship between communication and performance outcomes (Mohar et al., 1996; Monczka et al., 1998). Findings of hypothesis 3 are consistent with Kulp et al. (2004) he proposed that information sharing and cooperative systems such as scheduling and collaboration on logistics are directly and positively linked in increasing profit margins. Managerial implications Some interesting suggestions are derived from this paper for managers of supply chain who are involved in using social capital theory, specifically when they are running their business in developing countries specially Pakistan. The managers should understand the effect of structural mechanisms on the performance of buyer and supplier. They should not ignore the critical role of informational linkages because information exchange is enhanced when there are cooperative norms between two firms and they increase their outcomes. Finally, managers have to build cooperative norms and understand their direct impact on the performance and they should also recognize that operational and informational linkages have no significant impact on the cooperative norms and on increasing supplier performance. Limitations and future research There are also some limitations of this research which offer valuable information for future considerations. Firstly, by making foundation on our survey data, we found that there is no relationship between structural mechanisms and supplier performance. Future research can conduct longitudinal studies for examination of three basic constructs in different buyer and supplier relationship. Secondly, the culture of Pakistan has also impact on the results and it affects the relationships between buyer and supplier. Further research can expand our model by including national culture in the buyer-supplier relationship.

Finally the informants were selected only from buyer side; the data can be collected from both side form buyers and suppliers for more valid measures.

CONCLUSIONS

This paper has tried to fill the gap by examining the structural mechanisms, cooperative norms and supplier performance. Major finding of this study is that cooperative norms have significant and positive effect on buyer evaluation of supplier performance and the structural mechanisms such as (Operational and informational linkages) play no significant role in buyer evaluation of supplier performance. The managers should not focus on structural mechanisms, but they should understand the direct impact of cooperative norms on supplier performance. It should be also kept in mind that cooperative norms enhance information sharing and information sharing encourages the operational linkages. The managers should also understand that cooperative norms do not encourage operational linkages directly.

REFERENCES

Baker, T.L., Simpson, P.M., Siguaw, J.A., 1999. The impact of suppliers’ perceptions of reseller market orientation on key relationship constructs. Journal of the Academy of Marketing Science 27 (1), 50-57.

Cai, S., Yang, Z., 2008. Development of cooperative norms in the buyer-supplier relationship: the Chinese experience. Journal of supply chain management 44 (1), 50-57.

Cannon, J. P., Perreault, W. D., 1990. Buyer-seller relationship in business market. Journal of marketing research 36 (4), 439-460.

Cannon, J. P., Achrol, R. S., Gundlach, G. T., 2000. Contracts, norms, and plural form governance. Journal of the Academy of Marketing science 28 (2), 180-194.

Carr, A. S., Pearson, J. N., 1999. Strategically managed buyer-supplier relationship and performance outcomes. Journal of operations management 17 (50), 497-519.

Cousins, P. D., Handfield, R.B,. Lawson, B., Peterson, K.J., 2006. Creating supply chain relational capital: the impact of formal and


61

informal socialization processes. Journal of operations management 24 (6), 851-863.

Cousins, P. D., Menguc, B., 2006. The implication of socialization and integration in supply chain management. Journal of operations management 24 (5), 604-620.

Dong, Y., Carter, C. R., Dresner, M.E., 2001. JIT purchasing and performance: an exploratory analysis of buyer and supplier perspective. Journal of operations management 19 (4), 471-483.

Gnyawali, D. R., Madhavan, R., 2001. Cooperative network and competitive dynamics: a structural embeddedness perspective. Academy of management Review 26 (3), 431-445.

Griffith, D.A., Myers, M.B., 2006.The performance implication of strategic fit of relational norms governance strategies in global supply chain relationship. Journal of international business studies 36 (3), 254-269.

Hansen. M.T., 1999.The search-transfer problem: the role of weak ties in sharing knowledge across organization subunits. Administrative science Quarterly 44 (1), 82-111.

Heide, J.B., John, G., 1992.Do norms matter in marketing relationship? Journal of marketing 56 (2), 32-44.

Inkpen, A.C., Tsang, E.W.K., 2005.Social capital, networks, and knowledge transfer. Academy of management review 30 (1), 146-165.

Johnson, J. T., 2006. The role of explicit contracts and cooperative norms on fairness in buyer-supplier relationships. Academy of marketing studies journal 10 (2), 1-8.

Johnston, D. A., McCutcheon, D. M., Stuart, F. I., Kerwood, H., 2004. Effects of supplier trust on performance of cooperative supplier relationship. Journal of operations management 22 (1), 23-38.

Kalyar, M. N., Sabir, H. M. & Shafique, I. (2013). Improving cycle time performance: the role of market turbulence and cultural competitiveness. Production & Manufacturing Research: An Open Access Journal, 1(1), 3-18.

Krause, D. R., Handfield, R. B., Tyler, B. B., 2007. The relationship between supplier development, commitment, social capital accumulation and performance

improvement, Journal of operations management 25 (2), 528-545.

Kulp, S. C., Lee, H. L., Ofek, E., 2004. Manufacturer benefits from information integration with retail customer. Management science 50 (4), 431-444.

Lawson, B., Tyler, B. B., Cousins, P. D., 2008. Antecedents and consequences of social capital on buyer performance improvement. Journal of operations management 26 (3), 446-460.

Levin, D. Z., Cross, R., 2004. The strength of weak ties you can trust: the mediating role of trust in effective knowledge transfer. Management science 50 (11), 1477-1490.

Macneil, I. R., 1980.In: The new social contract. Yale university press, New Haven, CT.

McEvily, B., Marcus, A., 2005. Embedded ties and the acquisition of competitive capabilities. Strategic management journal 26 (11), 1033-1055.

Min, S., Mentzer, J. T., 2004. Developing and measuring supply chain management concepts. Journal of business logistics 25(1), 63-99.

Mohr, J. J., Sohi. R. S., Communication flow in distribution channels: Impact on assessment of communication quality and satisfaction, Journal of Retailing 71 (4), 393-416.

Mohar, J. J., Fisher, R. J., 1996. Collaborative communication in inter firm relationship; moderating effects of integration and control. Journal of marketing 60 (3), 103-115.

Monezka, R. M., Peterson, K. J., Handfield, R. B., 1998. Success factor in strategic supplier alliances: the buying company perspective, Decision science 29 (3), 553-573.

Moran, P., 2005. Structural vs relational embeddedness: social capital and managerial performance. Strategic management journal 26 (12), 1129-1151.

Nahapiet, J., Ghoshal, S., 1998. Social capital, intellectual capital, and organizational advantage. Academy of management review 23 (2), 242-266.

Noordewier, T. G., Johan, G., Nevin, J. R., 1990. Performance outcomes of purchasing arrangements in industrial buyer-vendor relationship. Journal of marketing 54 (4), 80-93.


62

Poppo, L., Zenger, T., 2002. Do formal contracts and relational governance function as substitutes or complements? Strategic management journal 23 (8), 531-543.

Uzzi, B., 1997. Social structure and competition in inter firm networks: the paradox of embeddedness. Administrative science quarterly 42 (1), 35-67.

Wagner,S.M., Johnson, J.L., 2004. Configuring and manage strategic supplier portfolios. Industrial marketing management 33 (8), 717-730.

Wagner, S. M., 2006. A firm’s responses to deficient suppliers and competitive advantage. Journal Business research 59 (6), 686-695.

Zaheer, A., Venkatraman, N., 1995. Relational governance as an interorganizational strategy: an empirical test of the role of trust in economic exchange. Strategic management journal 16 (5), 373-92.

Zhou, K. Z., Poppo, L., Yang, Z., 2008. Relational ties or customized contracts: An examination of alternative governance choices in china. Journal of international business studies 39 (3), 526-534.


63

APPENDIX

Table 1 Means, standard deviations and correlations of constructs

Mean Standard deviation

CN OL IL

Cooperative norms (CN) 4.3051 0.42311

Operational linkages (OL) 4.1921 0.53678 0.041

Informational linkages (IL) 4.0381 0.56058 0.404** 0.357**

Buyer evaluation of supplier performance (SP)

4.4746 0.43967 0.367** -.052 0.240

Table 2 Regression analysis for hypothesis 1

Variable Dependant variable: Informational Linkages

ẞ T-value Standard Error

Cooperative norms 0.404** 3.338 0.160

R2 0.164

F-Value 3.422

Table 3 Regression Analysis for hypothesis 3

Variable Dependant variable: Operational Linkages

ẞ T-value Standard Error

Informational linkages

0.357** 2.887 0.118

R2 0.128

F-Value 8.337

Table 4 Moderated regression analysis for hypotheses 4, 5, 6

Variables Dependent variable: buyer evaluation of supplier performance

ẞ t- value Standard Error

Cooperative norms 0.307** 2.255 .142

Informational linkages 0.159 1.091 .114 Operational linkages -0.122 -0.910 .109

R2 0.157

F-value 3.422


64

Hypothesized conceptual model

Cooperative Norms

Informational Linkages

Operational Linkages

Buyer Evaluation of Supplier Performance

Explaining Relationship between Co-operative Norms and Supplier Performance

Documents