Do supplier perceptions of buyer fairness lead to supplier sales growth?

Value Chain Dynamics et Impact of Collective Action on Smallholder Livelihood Improvement in Kenya

“…For example, if the producers are treated fairly by offering a fair price which is commensurate to the effort put in the production and crop management, the fruits are bought on time, and there is no wastage due to delayed deliveries, the producer will reciprocate by providing quality fruit and they will be committed to the particular buyer, thereby increasing efficiency and reducing opportunistic behavior. This study is consistent with Zaefarian et al (2016) who show that when suppliers perceive buyers to be fair, sales are affected positively. The positive growth in profits is commensurate to the relative effort or inputs invested in the production and management process (Brown et al, 2006;Kumar et al, 1995).…”

“…This relates to the issue of power, and because the buyers hold the power in terms of information concerning prices, the smallholders are dependent on the fairness of the buyers', who may act opportunistically by concealing the information in order to earn greater profit. Fairness improves supply chain performance by positively influencing commitment and expectations to continue the relationship (Kumar et al, 1995;Zaefarian et al, 2016).…”

“…Consequently, exchange norms such as increased loyalty and commitment are developed, which leads to the reduction of transaction costs and increased efficiency. As a result, the supplier's financial performance is improved (Kumar et al, 1995;Zaefarian et al, 2016). For example, if the producers are treated fairly by offering a fair price which is commensurate to the effort put in the production and crop management, the fruits are bought on time, and there is no wastage due to delayed deliveries, the producer will reciprocate by providing quality fruit and they will be committed to the particular buyer, thereby increasing efficiency and reducing opportunistic behavior.…”

“…Fairness in business relationships entails many facets with distributive and procedural fairness being two examples (Duffy et al, 2013;Narasimhan et al, 2013;Zaefarian et al, 2016). Distributive fairness refers to the supplier's perception of the fairness of the level of earnings and other outcomes that are obtained from the relationship with the buyer (Patterson et al, 2006;Yi and Gong, 2008).…”

“…Previous research shows that relationship factors including trust and communication quality are important in improving supply chain performance (Kwon and Suh, 2005;Ghosh and Fedorowicz, 2008;Zaefarian et al, 2016). Trust is defined as the willingness to rely on an exchange partner (Moorman et al, 1992).…”