Supply Chain Partner’s Perceptions of Trust & Risk: The Perspectives of UAE Printing and Packaging Industry

Supply Chain Partner’s Perceptions of Trust & Risk: The Perspectives of UAE Printing and Packaging Industry

Mohd. Laeequddin (Express Flexi Pack, UAE), B. S. Sahay (Management Development Institute, India), Vinita Sahay (Institute of Management Technology, India) and K. Abdul Waheed (Institute of Management Technology, UAE)
Copyright: © 2013 |Pages: 18
DOI: 10.4018/978-1-4666-2461-0.ch003
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Abstract

Over many years, researchers from social science and management have argued that to develop sufficient trust between potential supply chain partners, a useful starting point is to develop strategies for encouraging perceptions of trustworthiness. Conversely, marketing theorists and practitioners have called for strategies by industry that aims to reduce risk perceptions for successful relationships. However, it is not clear in the literature which perception is more significant; trust or risk and from which perspective. Identification of such factors plays an important role in supply chain design and operation to decide whether the supply chain members should strive to develop trust perceptions or reduce risk perceptions in relationship. This paper has identified the common perspectives of trust and risk perception to address the issue of which perception is more significant from each perspective. Results of a survey of supply chain member’s trust and risk perceptions of the printing and packaging industry in the United Arab Emirates are presented.
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Theoretical Back Ground And Research Hypothesis

When the supply chain members have access to complete mutual information about economics, capabilities, consequences, controls and if trustor is certain that there is no uncertainty or risk involved in the relationship then trust has no relevance; complete knowledge obviates the need for trust but it can be there. On the other hand when the members lack information about the trustee and the trustor is in the state of total ignorance of future outcome of the relationship there can be no reason to trust and it need not be there, as risk prevails. Thus trust cannot exist in an environment of certainty, if it did, it would be so trivially (Bhattacharya et al., 1998) and some level of uncertainty is required for trust to emerge (Dasgupta, 1998). In supply chain partner relationship some element of uncertainty and risk is always present from various perspectives therefore trust is a relatively informed attitude (a rational choice) or propensity to allow oneself and perhaps others to be vulnerable to harm in the interest of some perceived greater good and it depends on the context and perspective from which the supply chain members make their decision to trust or becoming vulnerable (take risk) to relationship.

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