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Trust In Maintaining Business Relationships Essay

963 words - 4 pages

With respect to the Northumbrian Water suppliers, Bensaou’s portfolio of buyers supplier relationship model is adopted to segment or categories suppliers. After segregation into different types of suppliers, Northumbrian Water choses to engage with its top 50 suppliers which indicate most of them to fall into the strategic partnership segment of the Bensaou’s portfolio. This indicates high trustworthiness, early supplier involvement and that these suppliers and buyers customize, specialize, differentiate, adapt, learn and innovate its supply processes according to the changes and requirements through exchange of information and expertise. In a strategic partnership the buyer and supplier tend to engage in a close long term relationships with constant exchange of information between the partnership to understand and work towards future goals in a more strategic and sustainable manner. Long-term relationship partnerships don’t start existing over night, (Zhand, 1972) suggests that trust is the ‘‘conscious regulation of ones dependence on the other that will vary with the task, the situation, and the other person…’’. This trust can be seen a concept of behavior that delivers suitable information, enables a mutual influence between the buyer and seller, promotes self-control and avoids the taking of undue advantage of the vulnerabilities of the others. According to (Spekman et al., 1997b; Yoshino and Rangan, 1995), trust is developed through personal relationships built over time with regular interactions. It is also important to remember that once the trust is dishonoured it often becomes very difficult to gain it back. This denotes that trust plays and important factor in maintaining a long-term business relationship while engaging with suppliers and it can be seen in the comment in the article where is says that they created certain data which assisted in the facilitation of the best practices in the supply chain which indicates the passing of information through the supply chain based on trust; they still considered “getting out and meeting the suppliers” was the ‘key’ in supplier relationship management indicating that trust is built up over repetitive encounter over a period of time, and this trust can be gained only when you treat the other entity equally ,like Emily Pearce from Sedex had mentioned. The same follows for transparency as well, transparency is not possible without trust.
In late 1980’s, the success of Japanese companies triggered academics and practitioners who found that their managers had treated their suppliers as valuable resources, which was important to the companies’ success. Therefore, immense effort was put in to maintaining a good relationship with the suppliers.
Contradicting to the Japanese, the Western companies treated supplier relationships as “additional” to the key procurement management role. The recent developments, such as rising complication of technologies, global competition, and need for competitive...

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