The Precursor Role of Cooperation, Coordination, and Relationship Investments in a Relationship Model

Purpose: The primary purpose of this study is to test the importance of activity-oriented precursors in a relationship model. This study supports the theoretical view that firms create trust and knowledge through activities and these activities make a commitment decision less risky (Johanson & Vahlne, 2009). The secondary purpose of this study is to collect and examine data from interorganizational relationships in both Sweden and the United States. By including data from two countries, results will be more generalizable. Results can also lead to several managerial implications. Methodology/approach: This study focuses on a sample of distributors from both the United States and Sweden. One hundred sixty-one usable surveys were returned from the U.S. survey, for a response rate of 27%. One hundred twenty-four usable surveys were returned from the Swedish survey, for a response rate of 21%. The PLS-SEM method was used to examine the model’s constructs. Findings: Similar to past research results show that trust and commitment have a direct positive influence on satisfaction, and that trust also has a direct positive influence on commitment. However, this study uniquely supports four out of six newly tested hypotheses. Both cooperation and relationship assets have a direct positive influence on commitment. Cooperation has a direct positive influence on trust and commitment. Relationship assets have a direct negative influence on trust but a direct positive influence on commitment. Surprisingly, two hypotheses were not supported: Coordination did not have a significant relationship with either trust or commitment. Research implications: Managers who want to achieve a satisfactory relationship based on trust and commitment need to prioritize their attention toward cooperation. They should also be aware that participation in joint activities (i.e., coordination and relationship investments) does not guarantee higher levels of trust or commitment in the relationship. It is the quality of the joint activities and the how dependent firms are on each other and not just participation in joint activities that are likely to create higher levels of trust or commitment. The quality of coordination and manageable levels of dependence may counteract the higher costs associated with joint activities compared to the costs associated with cooperation. Managers may be wise to not make major commitments to other firms unless high quality joint activities have created knowledge and trust between firms. Originality/value/contribution: The model adds the joint activity-oriented antecedents associated with collaboration which is essential to a successful relationship. Because of the high failure rate of collaboration may be due to cooperation and coordination failures and because these two constructs are underspecified in interorganizational research, this study is unique in examining activity-oriented antecedents in a trust/commitment model of relationship satisfaction in a cross-cultural context (i.e., with U.S. and Swedish samples)