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Complaint Management and Suppliers’ Engagement in Long-term Relationships - Cooperation and ConflictJap and Ganesan have examined the relationship between cooperation and successful goal achievement as well as the relationship between conflict and lucrative goal achievement. Powerful interfirm relationships directly increase both sale and profit, decrease cost and improve innovation because there is higher cooperation and less conflict. In other words, higher cooperation reduce the amount of conflict between buyer and seller (Cannon and Homburg 2001; Rindfleisch and Moorman 2001).
Dependence and power structure in a buyer-supplier relationship can influences the level of inter-organizational conflict and then affects on performance. The relationship among conflict, cooperative norms and focal firm performance has been examined in the literature (Bucklin and Sengupta 1993). Cannon et al. (2000) found that the more strength of relational norms, the more effects on the level of cooperative behavior and relationship performance.
To cover the gap in the literature and consistent with the previous studies, the conceptual model examines the relationship between perceived fairness and conflict in business to business context.
Supplier will definitely lose when a buyer’s perception from business outcome get dissatisfactory. So, it leads to the buyer-supplier relationship interruption and future negative behaviors of suppliers (Kelley et al., 1993).
Existing strong relationship between a buyer and its suppliers, suppliers tend to support this relationship in long term, even if they lose in short term (Ha and Jang, 2009; Ok et al., 2005). In fact, the level of customer satisfaction and their future behavioral intentions depend on their perceptions to whether they are treated fairly (McColl-Kennedy and Sparks, 2003).
Ha and Jang (2009) studied the role of relationship quality in justice and customer long-term orientation. If firms be able to decrease customer defections rates by 5%, they can rapidly increase their profits up to 85% (Reichheld and Sasser, 1990). In hospitality industry, decreasing customer defection rate from 20% to 10% cause increasing the average life from 5 to 10 years and therefore, this cause profit growth (Orilio, 2007).
Some researchers believed that trust is an expectation regarding a partner’s dependability and some others insist that trust is a behavioral intention (Coleman 1990; Deutsch 1962; Giffin 1967; Schlenker et al., 1973).
We further suggest examining the impact of these relational characteristics (trust, commitment and conflict) on long-term orientation.