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The determinants of trust between the Chinese industrial buyers and sellers in Malaysia

Siew, Min Yee (1998) The determinants of trust between the Chinese industrial buyers and sellers in Malaysia. Professional Doctorate thesis, Murdoch University.

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Abstract

Rising popularity of relationship marketing has forced many companies to adopt the relational approach, rather than the transactional approach, when dealing with their exchange partners. Marketing scholars and practitioners have devoted much effort to searching for ways to excel in developing successful relationships, because companies operate in an increasingly, competitive environment. Against that backdrop, trust has been repeatedly acknowledged as the key ingredient for building successful and lasting relationships. The objective of this study is to identify the major determinants of trust in the context of industrial marketing amongst the ethnic Chinese buyers and sellers in Malaysia. This study additionally incorporates the cultural and relational variables, by integrating previous trust models developed by Andaleeb and Anwar (1996) and Ramsey and Sohi (1997), in an attempt to verify the major detem1inants of trust, in the context of industrial buying and selling activities.

The study adopted the dyadic approach to empirically examine the antecedents and consequences of trust. It focuses on both the ethnic Chinese industrial buyers and sellers in order to secure a more realistic assessment of the deteID1inants and outcome of trust. Very few empirical studies of trust have made use of the dyadic approach to examine trust, therefore, this study may be considered to be beneficial and more realistic in advancing the understanding of trust within the ethnic Chinese industrial marketing context. Structural equation modelling was employed to test the proposed trust models.

The determinants of trust-in-seller were found to be, in order of importance : perceived intention of the seller, trust-in-seller’s organisation, strength of personal relationship, dialect fluency of the seller, buyer's trusting disposition and perceived similarity in cultural value. On the other hand, the determinants of trust-in-buyer were found to be, in order of importance: perceived buyer's intention, buyer’s listening behaviour, seller’s cultural value types, perceived similarity in cultural values, trust-in-buyer’s organisation, strength of personal relationship, buyer’s expertise and dialect fluency of the buyer.

The statistical results highlighted the finding that trust-in-buyer and trust-in-seller was determined by several variables. The strength, in terms of magnitude, which the independent variables impact on trust-in-buyer and trust-in-seller varies considerably. Some variables were found to exert a greater impact on trust than other determinants of trust, which spells important implications for the industrial buyers and sellers and company policy makers. Management of companies need to be aware of the differences and devote scarce resources to focus on the more important determinants of trust.
One important message that evolved from the study, is the need for companies to place more emphasis and investment on the cultural and relational factors that impact on trust. Although the themes are relatively new in industrial marketing, its importance should not be underestimated in shaping meaningful and successful exchanges between the industrial buyers and sellers.

The results of the study confirmed that the presence of trust enhances buyer and seller relationships among the ethnic Chinese businessmen in Malaysia. Together with satisfaction, trust between the buyer and seller dictates the probability of future interaction between the exchange parties, making trust a central concept in the exchange process. Because of the pivotal role that trust play in the buyer and seller exchange process, the greater challenge is not merely to conceptualise trust, but to ingrain and apply the ethical virtue as part of the personal and organisational life. When dealing with the concept of trust, both buyers and sellers should attempt to work towards actual trustworthiness and not rely, solely, on the perception of trustworthiness, because, in the long run, exchange parties will be judged by the actions, not the perceptions or the words of trustworthiness. Therefore, the foundation of trust between the buyers and sellers will only be sustained over a series of recurring, trusting behaviours which constantly provide reassurance to the exchange parties.

Item Type: Thesis (Professional Doctorate)
Murdoch Affiliation: Division of Business, Information Technology and Law
Notes: Note to the author: If you would like to make your thesis openly available on Murdoch University Library's Research Repository, please contact: repository@murdoch.edu.au. Thank you.
Supervisor(s): Armstrong, Robert
URI: http://researchrepository.murdoch.edu.au/id/eprint/52663
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