Factors of determining long-term orientation in interfirm relationships

Abstract

Marketers have witnessed a paradigm shift in which establishing, maintaining, and forging long-term buyer-seller relationships are considered the core of marketing activities. Accordingly, investigating a long-term orientation (LTO) has become a steady research stream in the marketing literature. Building on this on-going research stream, this study confirms that an essential precursor of a manufacturer's LTO is trust that, in turn, is formed by relational norms and satisfaction with supplier performance. Interestingly, however, the seemingly strong trust-LTO path is moderated by both power asymmetry and environmental uncertainty in buyer-seller relationships. The empirical findings suggest that regardless of emerging relationship marketing where buyer and seller are portrayed as parts of a team, power is still in use to control suppliers. In addition, a manufacturer facing uncertainty is less likely to form LTO toward its supplier for fear of losing flexibility in the time- and quality-based competition. © 2007 Elsevier Inc. All rights reserved.