Influence of power asymmetry, commitment and trust on sme retailers’ performance

Abstract

The purpose of this study is to analyze the effect of power asymmetry, commitment and trust to business performance. In a business relation, the role of power asymmetry, commitment and trust are importance to maintain the quality of a relationship. Business performance is an important factor to decide whether a business relation should be continued or terminated. We conducted a survey with traditional SME retailers in Indonesia as the respondents, which were obtained through purposive sampling methods. This study involved 245 SME retailers who have business relation with modern companies as their supplier. We adopted Morgan and Hunt’s (1994) model of relationship marketing for business to business in order to analyze the relationship among companies in business network. The result shows that power asymmetry, commitment and trust have significant, positive effects on business performance. The implication of this study is: power asymmetry between modern companies and SME potentially accelerates their performance, while commitment and trust will provide firm foundation for the companies involved in the business relation. In overall, power asymmetry has impact for firm with lack of bargaining position in business relation, thus instead of being exploited, SME retailers can increase their business performance due to partner’s pressure and demand to their performance.

Reputation System of C2c E-Commerce, Buying Interest and Trust

“…The more popular it gets, the more trust the sellers have. The trust of the customers on the sellers depends on their ability to provide a safe transaction and to ensure that it will be directly processed after the payment is completed (Grabner-Kraeuter, 2002;Setyawan, Susila, & Anindita, 2019). This reliability is related to the presence of online sellers.…”

Determinan Kinerja Usaha Mikro (Studi Pada Usaha Mikro Di Kecamatan Wenang, Manado)

“…Pelaku usaha membangun relasi dengan lingkungan demi mempertahankan usahanya. Setyawan et al (2019) menyatakan bahwa komponen dasar dalam hubungan berbisnis adalah kepercayaan (trust). Modal sosial telah menjadi bagian integral dari pertumbuhan usaha (Primadona dan Emrizal, 2017; Pierre, 2017), keberhasilan wirausahawan (Schenkel et al, 2012), dan pertumbuhan ekonomi (Thobias et al, 2013).…”

Power in Third-Party Logistics

“…Since supply chain partners are willing to commit their resources and give short-term gains for long-term success, commitment is a crucial factor in success over the long term. If both parties experience mutually beneficial benefits because of such commitment, organizations create and maintain long-term relationships (Setyawan et al,2019). Therefore, Commitment reflects the success of an inter-firm relationship (Mavondo and Rodrigo, 2001).…”