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Title: Trust, commitment and business expansion in automotive supply chains in a developing country: a principal-agency perspective

Authors: J.A. Badenhorst-Weiss; A.S. Tolmay

Addresses: School of Public and Operations Management, University of South Africa, P.O. Box 392, Unisa, 0003, South Africa ' School of Public and Operations Management, University of South Africa, P.O. Box 392, Unisa, 0003, South Africa

Abstract: The automotive industry is important for sustaining developing countries' economies. Literature states the South African automotive buyer-seller relationships are hampered by conflict where both parties reveal self-serving behaviour. This results in a decrease of trust and commitment, and increased supply chain uncertainty that is hampering business expansion. Hence, this study aimed to investigate the relationships between trust, commitment and business expansion through buyer-seller relationships. A quantitative study was conducted through a structured close-ended questionnaire among 114 managers from automotive component manufacturers. The empirical research found a strong presence of trust and commitment in automotive buyer-seller relationships. The influence of trust and commitment on possible business expansion was determined through a regression-based analysis. Findings revealed trust in a seller (agent) results in business expansion and commitment to a seller acts as a mediator between trust and business expansion. Action plans for both agents and principals (buyers) are recommended to sustain business.

Keywords: automotive industry; supply chains; supply chain relationships; supply chain risk; social exchange theory; agency theory; trust; commitment; business expansion; South Africa; developing countries.

DOI: 10.1504/IJAMS.2021.113368

International Journal of Applied Management Science, 2021 Vol.13 No.1, pp.52 - 68

Received: 07 Jun 2018
Accepted: 26 Mar 2019

Published online: 23 Feb 2021 *

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