The performance implications of power–trust relationship: The moderating role of commitment in the supplier–retailer relationship

• Published in: Industrial marketing management Vol. 43; no. 2; pp. 312 - 321
• Main Authors: Jain, Megha, Khalil, Shadab, Johnston, Wesley J., Cheng, Julian Ming-Sung
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01-02-2014; Elsevier Sequoia S.A
• Subjects: Commitment; Commitments; Enterprises; Financial analysis; Financial performance; Power; Strategic performance; Strategic planning; Studies; Taiwan; Trade relations; Trust; Vendor supplier relations; Taiwan; Strategic performance; Commitment; Financial performance; Trust; Power
• ISSN: 0019-8501; 1873-2062
• DOI: 10.1016/j.indmarman.2013.09.001

The current research examines how coercive power and non-coercive power affect trust and how these relationships are affected by affective and calculative commitment. It also expands the understanding of the role of an under-researched dimension of performance, i.e., strategic performance, and studies it as a mediating variable in the relationship between trust and financial performance. The proposed model is empirically tested using Partial Least Squares (PLS) in supplier–retailer channel in Taiwan. The findings reveal that affective commitment has a positive moderating effect on the negative relationship between coercive power and trust, while calculative commitment has a negative moderating effect on the positive relationship between non-coercive power and trust. The results also indicate that strategic performance partially mediates the effect of trust on financial performance. The research advances theoretical understanding on the complex power–trust relationship and provides insights into the role of commitment in both enabling and undermining channel relationships. The findings highlight the importance of building affective commitment in channel relationships and the critical role of strategic performance in the trust–financial performance relationship.
•Investigation of moderating role of commitment in power driven supplier–retailer relationships•Exercising coercive power decreases trust, non-coercive power increases trust.•Trust increases strategic performance, which increases financial performance.•Affective commitment positively moderates the negative relationship between coercive power and trust.•Calculative commitment negatively moderates the positive relationship between non-coercive power and trust.