The Cultural and Trust Aspects of Collaborative Supply Chains

Author : Gilbert Aryee

  • Keywords : Trust, Collaboration, Organisational theory, Empirical research

A review of the literature on inter-organisational relationships is undertaken with the issue of trust and organisational culture setting the boundaries to this inquiry. The reason why business relationships or alliances are formed are first put forward in the shape of forms of collaboration. Theories on intercompany relationships are examined to see which ones deal with trusts and culture and their associated elements.

Transaction Cost Economics, Network Theory, and Agency Theory are examples of theories selected for their relevance to the paper. Organisational culture is initially discussed. Following that, trust in its various forms, antecedents, limits, failure, measures, and impact on collaboration is presented.
Empirical work previously carried out with industrial partners from the steel sector in the UK, is then applied to the results of the literature review. The results show that trust is a major issue in business collaborations. The limits set for trust in these business relationships were found to be instrumental in sustaining the form of collaboration that the business relation was created to fulfil.

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Submitted by kwng on Mon, 03/07/2006 - 12:20pm.

Hello. As co-chairman, I would like to start the session with a question to your paper. I noted your case study with great interest. I would appreciate very much if you elaborate in the case of Steel supply chain, what form of collaboration (as indicated in Table 1) and which theories on inter-company relationships that best fit what is found in the case study (if there is one).

Thank you.

Submitted by Gilbert Aryee on Wed, 12/07/2006 - 12:54pm.

The three case companies comprise a primary steel producer (who converts iron-ore through blast furnaces into coils), a transport provider(who specialises in the transportation of steel products), and a tubes manufacturer (who converts the steel coils into tubes). The types of collaboration mentioned in the paper which has relevance to the case studies, include Technology-design collaboration between the the primary steel producer(who has the technology for converting iron-ore to steel coils of the required specification) and the steel tubes manufacturer (who subsequently applies their design capability to he steel coil to form individual products). The transport provider by offering specialised services for steel movements can be regarded as engaging in collaboration in complementary know-how.

The relevant theories on inter-organsational relationships include agency theory for the relationship between the primary steel producer and the steel tubes manufacturer and also between the primary steel producer and the transport provider since contractural obligations are in place for these relationships. Interestingly there is no contractural obligation between the transport provider and the steel tubes manufacturer. Network theory and transaction cost economics have relevance for all three cases inasmuch as for instance providing bases for both a supply chain management view(i.e network theory) and also cost implications for example in averting the need for monitoring partners should trusting mechanisms be put in place (i.e. transaction cost economics).

Submitted by kwng on Thu, 13/07/2006 - 5:39pm.

Hi. Thanks for the detail reply on your research work, Dr. Aryee. I hope you can submit a video presentation of your research work soon as this will definitely raise more interest and enthusiasm to the participants of this conference. If you have a video presentation prepared just email to me and I'll make sure it will be uploaded.

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