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The International Journal of Logistics Management

Spillover effects of a firm's relationship marketing orientation in the logistics triadAdriana Rossiter Hofer Ronn J. Smith Paul R. Murphy

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Adriana Rossiter Hofer Ronn J. Smith Paul R. Murphy , (2!"#,$Spillo%er effects of a firm&s relationshipmar'etin orientation in the loistics triad$, The )nternational Journal of *oistics Manaement, +ol. 2 )ss2 pp. 2- 2//Permanent link to this document:http:00d1.doi.or0!.!!/0)J*M"2!"

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!"#$ %&illover effects of a (5)(

relationshi& mar*etorientation in the logist

(70 +driana ,ossiter ofer

,eceived ( +&ril (0 epartment of Supply ;hain Mana(ement, Sam M. 5alt<ni%ersity of Ar'ansas, >ayette%ille, Ar'a+cce&ted 0 %e&tember (0/

,onn ". %mithepartment of Mar'etin(, Sam M. 5alton ;olle

<ni%ersity of Ar'ansas, >ayette%ille, Ar'ans

aul ,. $ur&h1epartment of Mana(ement, Mar'etin(, an

Boler School of Business, John ;arroll <ni%ersity, <ni%e

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tics

a&er t1&e,esearch &a&er

!ntroduction

#ogisticsoutsourcing)characteried

b1 some as a:fad; as

recentl1 as thelate 990s<$ur&h1 andoist) 99=)

&la1s a *e1 rolein man1contem&orar1su&&l1 chains.>or exam&le)according to the7th +nnualThird-art1#ogistics %tud1

<#angle1)(0(=) third-

&art1 logistics<#s=

&roviders addvalue for their customersthrough bothlower

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D o w n l o a d e d b y S U R A B A Y A

U N I V E R S

I T Y

A t 2 2 : 5 9 0 6 J u n e 2 0 1 6 ( P T )

costs and im&roved service.!n addition) the mar*et for logistics outsourcingcontinues to ex&and on aglobal basis) with worldwiderevenues from logisticsoutsourcing currentl1 inexcess of ?%@00 billion<#angle1) (0(=.

The increasingsignificance of logisticsoutsourcing in contem&orar1su&&l1 chains is reflected inliterature attention to therelationshi&s between the#s that &rovide logisticsoutsourcing services andtheir customers. +nemerging research stream)

based on concerns identified b1 ee&en et al. <(00=)focusses on the &erformance

of logistics outsourcingarrangements and) b1extension) the antecedents of this &erformance.

!n recent 1ears) logisticsoutsourcing &erformance has

been investigated in terms of goal achievement and goalexceedance <e.g. artmannand de rahl) (0(=) lo1alt1<e.g. Aallenburg et al.)(0=) relationshi&effectiveness <e.g. ofen* et

al.) (0=) long-term business relationshi&s <e.g.#i et al.) (0(=) and

&roactive im&rovement <e.g.ofer et al.) (0(=. Theantecedents of &erformance

&rimaril1 focus oninterorganiationaldimensions between #sand their customers. Theseantecedents include) but arenot limited to) trust <e.g. #iet al.) (0(=) commitment

<e.g. Aallenburg et al.)(0=) long-term orientation<#T6= <e.g. ofer et al.)(0(=) communication <e.g.,ollins et al.) (0=) andcollaboration <e.g. Bhen etal.) (00=.

>igure ) ada&ted fromCas* <(00=) de&ictslogistics outsourcing as &artof triadic relationshi& that

involvest

hr ee

&ar tici

&a

nts

D aseller)a

b

u1er)anda#.T

odate)near l1

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al

!n

%&illover effects of a firm(7

Relationship

3PL

Relationship

Seller Buyer

Relationship

>i

.Source:

AdaptedfromBas'

(2!#The

logistics

triad

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!"#$(5)(

(7(

>igure (.Bonce&tual model

D o w n l o a d e d

b y S U R A B A Y A

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9 0 6 J u n e 2 0 1 6 ( P T )

of the s&illover effectin the logistics triad

LTO 3PL

FocalFirm

RM

O

The choice of logistics outsourcing asthe s&illover relationshi& of anal1sis

su&&orts Courdeau et al.'s <(007= callfor s&illover research across a variet1of service industries. Thus) when afocal firm utilies the services of a#) the #'s &erformance on selectmetrics <e.g. on-time deliver1Edamage-free deliver1= ma1 be

&erceived b1 the bu1er as the focalfirm's &erformance on these metrics.+s the number of com&aniesoutsourcing logistics functions to #scontinues to increase) a #'s logistics

&rofessionals &la1 a critical role in

managing the relationshi& between afocal firm and its bu1ers <#angle1)(00=.

The &resent &a&er ma*es severalcontributions to the logistics andsu&&l1 chain management literature.>rom a general &ers&ective) the &a&er addresses aughert1's <(0=suggestion for additional research onlogistics and su&&l1 chain relationshi&s

b1 focussing on a s&ecific t1&e of logistics relationshi&) involvinglogistics outsourcing. !n addition) this

&a&er's use of ,$6 as a theoreticallens su&&lements recent research thatinvestigated logistics outsourcing froma relationshi& mar*eting &ers&ective<e.g. #arge et al.) (0E rawe et al.)(0(=.

+ third contribution is that the &a&er addresses the call b1 ee&en et al.<(00= to investigate the &erformance of logistics outsourcing arrangements andtheir corres&onding antecedents. Ahile

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most studiesin logisticsoutsourcingfocus oninterorganiationalconditions

between a

focal firmand # asantecedentsof

&erformance<ofer etal.) (0(=)this stud1introducesthe s&ecificstrategicorientationof the focalfirm towarda different

&art1 <i.e. itscustomer=as an

antecedent of the nature of suchrelationshi&s and the ultimate

&erformance. >urther) it describes howthis orientation toward a customer interacts with *e1 interorganiationalconditions between the focal firm and#. To this end) the &resent &a&er loo*sat how o&erations &erformance <one t1&e

of logistics &erformance= is influenced b1 the antecedents of ,$6 of a focalfirm toward customers) a focal firm'sde&endence on a #) and long-termorientation between a focal firm and its#.

The remainder of the &a&er isstructured as follows. The next section

&resents a brief discussion of ,$6and #s) and this is followed b1 adiscussion of the conce&tual model andh1&otheses develo&ment. The datacollection and anal1sis &rocess

follows) along with the results of theem&irical model. >inall1) the stud1concludes with a discussion of theresults) relevant managerialim&lications) and directions for futureresearch.

D o w n l o a d e

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, $6 an

d#

The, $6 c

once

&thases

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se

Ah

8 n

ronmental and firm-s&ecificfactors in &roducing &ositive

&erformance results <Tse etal.) (004=) several Fuestionsemerges. Aill a focal firmwith ,$6 toward itscustomers ada&t its relationalstrategies toward its #sGAhat are the &erformance

effectsG The next sectionlends insight to theseFuestions through thedevelo&ment of a conce&tualmodel and h1&otheses.

Bonce&tual model andh1&otheses develo&ment

Cased u&on review of &ertinent logistics) su&&l1chain management) andmar*eting literature) it is

&osited thatH first) a focalfirm's ,$6 toward itscustomers <,$6= willim&act the nature of the focalfirm's relationshi& with its# measured b1 its #T6Esecond) the nature of therelationshi& with the #will be contingent u&on afocal firm's &erceivedde&endence on the #Ethird) the im&act of a focalfirm's ,$6 on the #T6 withthe # will be stronger withhigher levels of de&endenceon the #E and fourth) afocal firm's level of #T6 inthe relationshi& with a #im&acts the focal firm'so&erations &erformance.>igure de&icts the

&ro&osed model and thefollowing subsectionsdiscuss these &ro&ositions indetail.

A focal firmCs RM8 to6ardits customers and *T86ith its P*+ firm that embraces ,$6aims to &roactivel1 create)develo&) and enhancecustomer relationshi&s <Cerr1)9=. 6ne critical as&ect of asuccessful businessrelationshi& with a customer resides in the assurance that

deliver 1sc

hedulesar emet)

shi

&ment

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!"#$ H5+*

(5)(

H1+

LTO with 3PL

H4+

OperationsRMO with customersperformance

(74H3+

H2+


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>igur e

.

$odel of the

s &illover ef f ect

s of a f ir m's

,$6 onlogisticsoutsourcingrelationshi &s

Dependence on 3PL

ote:aH5 predicts the

mediatin effect of *T8 onRM8 to performancerelationship and is indicated 9ydashed lines 9ecause it is acomposite of direct effectsloadins calculated 9y DS

Fuantities are correct) and shi&ments arefree of damage or s&oilage. !ndeed)managing inventor1 and deliveringgoods efficientl1 and effectivel1 has

become an im&ortant source for creatingcustomer value and increasing customer satisfaction <8neme1er and $ur&h1)(004=.

Ahen a # is hired to manage varioustrans&ortation and logistics services

between a focal firm and its customer) a#'s o&erational &erformance becomesan integral &art of a focal firm'srelationshi& with the customer. +s such)

&oor &erformance b1 the # will im&acta customer's satisfaction toward the focalfirm and harm relationshi&-buildingefforts. !n order to ensure successfulo&erations while outsourcing logisticsfunctions to #s) collaboration with the# is a necessar1 tool <8neme1er and$ur&h1) (004=) es&eciall1 considering theincreasing com&lexit1 of modern

o&erations.Bollaborating with a # entails

exchange of timel1) accurate D and oftensensitive D information) establishingo&erating controls) and engaging in joint

&lanning <ardner et al.) 994=. Theseactivities reFuire time) &ersonnel) andmonetar1 commitments. !n addition)switching o&&ortunities are reduced due tocontractual arrangements <Ailliamson)

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95=. These dimensions characterie a relationalexchange <$organ and unt) 994= and in order tounderta*e such efforts in relationshi& with a #)the relationshi& mar*eting &ers&ective suggests thatan ex&ectation of the continuation of the relationshi&

for an extended &eriod of time D or a long-termorientation <#T6= <anesan) 994= should be&resent <ofer et al.) (009=. + focal firm with #T6toward a # ex&ects that the relationshi& outcomesshould benefit the firm in the long-run <anesan)994=. +s such) a firm with #T6 toward a # iswilling to ma*e sacrifices or commitments in the&resent because it ex&ects to be com&ensated in thefuture.

+dditionall1) a focal firm with ,$6 focusses ondevelo&ing a long-term relationshi& with its

custo

mer s <Tse e

t al.)(004= b1nurturinga climateof trust)

bonding)em&ath1)andreci&rocit1. !n thisscenario)a focalfirm with,$6develo&sa set of

s*ills related to communication) as well astransfer and integration of *nowledge<Bonnell and 2oola) (007=. Thus) if a #is an instrumental &art of a focal firm'srelationshi& with a customer) it is ex&ected

that a focal firm will leverage this*nowledge in the relationshi& with the# in order to excel in the logisticalas&ects of its relationshi& with customers.!n such scenarios) it is critical that a focalfirm has an #T6 with the #.

3xtant logistics research has foundevidence that the nature of a firm'srelationshi&s with its own customersim&acts its attitudes and behaviors towardits #


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<entr1)

99E#arsonandammelgaard)(00=.>or exam&le)surve1ing

bu1ers)su&&lier

s) and#smanagingo&erations

betweenthem)entr1<99=foundthattrans&ort

ationcarriersutiliedin

bu1er-su&&lier

&artnershi&swerevieweddifferentl1 from

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car r i

er s used in n

on-&ar tner ing bu1er -su&&lier ar r angeme

nts. %&ecificall1) trans&ortation carriers within existing bu1er-su&&lier &artnershi&s embodied the dimensions ofH long-term commitments)o&en communications and information sharing) coo&erativecontinuous im&rovements on cost reductions and increased Fualit1)and the sharing of ris*s and rewards of the relationshi&.

%imilarl1) case studies of firms suggest that close coo&eration between bu1er and su&&lier leads to &lans to bring a carrier into thecollaborative &rocess <#arson and ammelgaard) (00=. #arson andammelgaard <(00= &ro&ose that increasing the involvement of carriers within these &artnershi&s enhances cost savings and serviceim&rovements) as all &arties wor* together to im&rove Fualit1 ando&erational efficiencies.

Cased on the discussion above) it is h1&othesied that focal firmswith ,$6 toward their customers will exhibit higher levels of a long-term orientation <#T6= in the relationshi& with their #s) so as toensure that logistical reFuirements and ex&ectations of their customersare satisfied. %&ecificall1H

H!. + focal firm's ,$6 toward customers is &ositivel1 related tothe focal firm's #T6 with a #.

ependence on P* and *T8 6ith P*

The nature of the relationshi&) as well as the governance structure) between a focal firm and a # will be greatl1 im&acted b1 the levelof the focal firm's de&endence on a # <anesan) 994=.e&endence is conce&tualied as recognition b1 business &artners thatthe relationshi& creates s1nergistic outcomes that could not be attained

b1 each &artner o&erating alone and that the outcomes from theexchange relationshi& are greater than those &ossible from alternative

business relationshi&s <+nderson and Iarus) 990=.

!n the context of logistics outsourcing) it is &ro&osed thatde&endence of a focal firm on a # is caused b1 the focal firm's &erceived need of a #'s critical resources <feffer and %alanci*)97=) such as the ex&ertise and ca&abilit1 of &lanning and &erformingcom&lex logistics activities more efficientl1 and effectivel1.Therefore) the need to acFuire these critical resources creates asituation of de&endenc1. !n order to maintain a consistent su&&l1 aswell as enhance the control of a #'s critical resources) the focal firmwill li*el1 develo& a stronger #T6 toward the relationshi& with the# in order to increase the level of coordination <anesan) 994= andenhance its relational governance with the # <%a*aguchi et al.)(004=H

H2. + focal firm's de&endence on a # is &ositivel1 related to its #T6with the #.

Moderatin effect of dependence on the relationship of RM8 to*T8 6ith P*

!n addition to the h1&othesis that ,$6 has a &ositive direct effect ona focal firm's #T6 with its #) it is ex&ected that the strength of thiseffect will var1 de&ending u&on the nature of the relationshi& betweenthe focal firm and its #.

+ focal firm with ,$6 has its customer's satisfaction as the number one &riorit1. Ahen the focal firm &erceives that it is highl1 de&endent on

the #'scom&etencies tosucceedin the

logisticalas&ectsof therelationshi& withacustomer ) thefocalfirm will

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er

effects of a firm (75

!"#$(5)(

(7

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li*el1 strengthen the &ursuit of a long-term relationshi& with the # in order to achieve the desired ,$6 goal of nurturing and develo&ing relationshi&swith customers <>raier) 9=. !n this scenario) it can be inferred that a focalfirm will &ursue a stronger coordination of activities with the # because theservices of the # are &erceived to be critical in achieving higher levels of customer satisfaction and maintaining a long-term) &rofitable relationshi&with a customer. +s such) it is ex&ected that the effect of ,$6 on #T6 with a# will be stronger for focal firms that exhibit higher levels of de&endenceon the #. Thus) it is h1&othesiedH

H. The im&act of a focal firm's ,$6 toward customers on a focal firm's#T6 with a # is &ositivel1 moderated b1 a focal firm's level of de&endence on a #.

Mediatin effect of *T8 6ith P* on operations performance

Ahen an organiation exhibits a #T6 toward a relationshi&) it focusses on thelong-term benefits that it ex&ects to receive from the relationshi& <anesan)994= and is willing to engage in collaborative activities with its &artner <%heu et al.) (00=. +n organiation with #T6 toward a &artner is willing tocom&romise in the &resent because it believes it will be com&ensated in thefuture <#ambe et al.) (00=. +s such) #T6 toward a relationshi& is a criticalantecedent of im&ortant relational exchange dimensions) such as coo&eration)information exchange) and trust <Bhung et al.) (00=. $oreover) #T6 is anim&ortant com&onent of relational exchange constructs) such as strategicsu&&l1 chain management and a firm's &artnering behavior <ardner et al.)

994=. %heu et al. <(00=) for exam&le) find that #T6 im&acts severalactivities involved in the su&&l1 chain architecture between a bu1er andretailer) such as the Fualit1 of information shared) inventor1 s1stemsdevelo&ment) and coordination structure.

#T6 also is associated with several relationshi& outcomes) such asdecreased conflict and increased satisfaction <riffith et al.) (00=. >or exam&le) Bhung et al. <(00= investigate su&&lier-retailer relationshi&s andfind that #T6 im&acts a retailer's trust in the su&&lier) which in turn im&actsretailer satisfaction with the su&&lier. +s a conseFuence) higher levels of

&erformance of this relationshi& are ex&ected when #T6 is in &lace. >or exam&le) #usch and Crown <99= find that #T6 im&acts channel contractingand relational behavior) which ultimatel1 im&acts wholesale-distributor

&erformance. #astl1) %heu et al. <(00= find an indirect effect of #T6 on

su&&lier-retailer &erformance mediated b1 collaboration.Cased on the above discussion) it is &ro&osed that a focal firm with ,$6

toward its customers will exhibit higher levels of logistics &erformance)than*s to the s&illover effect of such orientation on the nature of therelationshi& with a #. >urther) it is h1&othesied that focal firms withhigher levels of #T6 toward the relationshi& with the # will ex&eriencehigher levels of &erceived o&erations &erformance accrued from therelationshi& with the #. %&ecificall1H

H". + focal firm's #T6 with its # is &ositivel1 related to a focal firm's &erceived o&erations &erformance.

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H. +

focal firm's #T6 with its # mediates the effect between a focalfirm's ,$6 toward its customers and a focal firm's &erceivedo&erations &erformance.


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,esearch methods;onte1t of data collection and sample

#ogistics &rofessionals have a s&ecial role while managing arelationshi& with a customer because the1 are res&onsible for ensuringthat orders &laced b1 customers are filled correctl1) delivered on time)and damage free. !n the cases where these activities are outsourced to#s) the Fualit1 of the services &rovided b1 the # will be criticalfor a focal firm's &erformance before its customer. +s such) the

&o&ulation of interest includes &rofessionals whoH first) areres&onsible for managing logistics o&erations for various customers of the firms for which the1 wor*E and second) use the services of a #.%&ecificall1) the stud1 sam&le includes logistics managers in Crailianorganiations that em&lo1 the services of a large Crailian #. Thesefirms are of different sies and belong to a variet1 of industries) whilethe # has been in business for over 0 1ears and &rovides various

trans&ortation and logistics-based services) such as trans&ortationmanagement) distribution) cross-doc*ing) and su&&l1 chainmanagement solutions.

>or each firm) a single informant with uniFue access to relevantinformation was selected <e.g. 8lein and 8olows*i) (000E $in et al.)(007=. To ensure that the informant was *nowledgeable about therelationshi& between the focal firm and the #) the # &rovided thecontact information of the &erson who was res&onsible for managingthe accounts and o&erations with the #. Cecause the sam&leconsists of single informants for each firm) &rocedural ste&s andstatistical tests were em&lo1ed to control for common method bias)with the statistical test results suggesting that common method bias isnot a concern <odsa*off et al.) (00=.

The surve1 design and im&lementation followed the methodolog1 &ro&osed b1 illman <(000=. + web-based surve1 was chosen as thea&&ro&riate method to collect the data because the surve1 wasadministered to Crailian firms) but managed from the ?%+. +fter surve1 instrument creation) surve1 refinement involved several ste&s.!nitiall1) the surve1 instrument was refined and the substantive contentfinalied with the aid of feedbac* &rovided b1 logistics ex&erts with*nowledge of logistics outsourcing research and ex&erienced insurve1 research methods. Iext) a series of interviews was conductedwith three logistics academics in order to assess &ossibleinconsistencies in wording and structure. +fter the first series of interviews) the surve1 was revised and translated into ortuguese. !n

order to &revent &ossible translation bias) one Crailian mar*etingscholar and two Crailian logistics &rofessionals) fluent in both3nglish and ortuguese) reviewed the original and translated surve1instruments to ensure &ro&er translation <Crislin) 90=.

The research &artici&ant contact &rocess began with an e-mailinvitation b1 the # to its customer base. + total of 7 firmsacce&ted the invitation to &artici&ate in the surve1 and were e-mailedan individualied lin* to the surve1 instrumentE (99 firms res&ondedto the Fuestionnaire. Totall1) of the submitted Fuestionnaires werenot usable) resulting in ( usable Fuestionnaires for a final res&onserate of 74.4 &ercent <(/7=.

Testin

for nonresponse 9ias

Testingfor non-res&onse

bias wasconducted toensurethegeneraliabilit1

of theresearchfindings<#amber t andarrington)990=.Theres&onses of earl1 vslate

res&ondentswerecom&ared

becauseresearchsuggeststhat lateres&ondentstend to

be ver1similar to non-res&ondents<+rmstr ong and6verton)977=.Thesurve1com&letion date

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of ea

ch r es&o

ndent was identified) and the first 94 res&ondents %&illovereffectsof afirm

(77

!"#$(5)(

(7

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<i.e.com&leted thesurve1duringthe firstfour da1safter itsrelease=re&resented theearl1res&ondent grou&and thelast 94res&ondentsre&resented thelateres&ondent grou&.Theres&onses of *e1) non-demogra&hicFuestionswerecom&aredbetweenthegrou&susing aTwo-rou&otelling

t(-test D

$+I62+. Thetestshowednostatistical

l1significantdifferencebetween

the vector means of the earl1 and late res&ondent grou&s. The absence of non-res&onse bias was inferred.

Sur%ey respondent characteristics

The &osition &rofile of the res&ondents is diverseH logistics managers <.9

&ercent=) logistics su&ervisors <(.5 &ercent=) general managers <0. &ercent=) and owners <. &ercent=. Bonsidering thatH first) these individualsare the #'s contact &erson for coordination of logistics activitiesE andsecond) the1 are &rofessionals at the management level) suggests that theres&ondents are *nowledgeable about their com&an1's relationshi& with the#. The res&ondent firms belong to a variet1 of industries) such as a&&arel<.5 &ercent=) health care <.4 &ercent=) automotive and auto &arts <5.7

&ercent=) and electronics <5.7 &ercent=.

+&&roximatel1 0 &ercent of the sam&le is com&osed of res&ondents fromfirms with o00 em&lo1ees <5.(5 &ercent= and between 00 and 500em&lo1ees <(5.( &ercent=) which are classified as small and medium firms)res&ectivel1) b1 the Crailian agenc1 !C3 <www.ibge.com.br=. #arger firms)with more than )000 em&lo1ees) com&rise o0 &ercent of the sam&le. Thesmall sie of res&ondent firms is also observed in the sales descri&tives. 6f the res&ondent firms) .5 &ercent have annual sales of o?%@0.5 million). &ercent of the firms have annual sales ranging from ?%@0.5 to ?%@4.million) and 0. &ercent of the firms have annual sales ranging from ?%@4.to ?%@.4 million. The remaining res&ondents have annual sales 4?%@.4million) of which &ercent had annual sales 4?%@(0 million.

Measurement scales

The measurement scales utilied in this research are ada&ted from existing &s1chometricall1 validated scales in the mar*eting and logistics literature. +llitems are measured on seven-&oint #i*ert-t1&e scales anchored b1 D strongl1 disagree to 7 D strongl1 agree. #T6 was measured on a three-item

scale using the ofer et al. <(009= construct :extendedness); which refers tothe long-term ex&ectations embedded in &artnering behavior between a firmand its #. e&endence u&on a #) defined as the degree to which the firm

&erceives the need to maintain the relationshi& with the # in order toachieve desired goals) was measured on a seven-item scale ada&ted fromanesan <994=. ,$6 was measured on a 5-item scale ada&ted from Tse etal. <(004= and com&osed of four dimensionsH trust) bonding) em&ath1) andreci&rocit1. >inall1) o&erations &erformance was measured b1 a (-item scaleado&ted from 8neme1er and $ur&h1 <(004=. The &erformance scale ca&turesthe extent to which a focal firm &erceives that logistics and mar*et channel

&erformance are influenced b1 the wor*ing relationshi& with its #.

ata anal1sis%tructural eFuation modeling <%3$= <with 3J% . software= was thestatistical techniFue used to test the h1&otheses. + two-ste& anal1sis a&&roachwas followed) which included validating the measurement model and fittingthe structural model <+nderson and erbing) 9=. The former isaccom&lished &rimaril1 through

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confirmator1 factor anal1sis) while the latter is accom&lished &rimaril1 through &ath anal1sis with latent variables.

ata preparation and preliminary analyses

Cefore beginning &reliminar1 data anal1sis) the data were &re&ared b1

following a number of ste&s to ensure Fualit1) such as assessment of unidimensionalit1 and item cleaning <arver and $enter) 999=. +llmeasurement items were chec*ed for obvious univariate outliers using

box &lotsE no outliers were found. Iext) the univariate distributions for each variable were chec*ed for s1mmetr1 through histograms.

Table ! lists the means and standard deviations for each construct.%ome of the variable means were greater than the central &oint of the#i*ert-t1&e scales) which is an indication of distribution s*ewness.>or this reason) the robust estimation &rocedure in 3J% was used in

order to correct the maximum li*elihood model w( statistic and the

standard error to adjust for non-normal data <air et al.) (00E 8line)(005=. >inall1) the constructs were tested for unidimensionalit1through confirmator1 factor anal1sis. !tems loading o0.40 were

removed from their res&ective scales. +fter item removal) the scaleswere reassessed to ensure content validit1 <see a&&endix for items andres&ondent instructions=.

Partial disareation

%3$ can encounter convergence &roblems in models in whichconstructs have man1 indicators <Cagoi and eartherton) 994=Etherefore) &artial disaggregation was conducted for the ,$6 and

&erformance constructs. artial disaggregation was o&erationall1accom&lished b1 randoml1 assigning items of a construct intocom&osites with these com&osites then becoming the newmeasurement items. The &rocess was conducted such that each factor has no more than three combined indicators. The rationale of &artialdisaggregation is that all items related to a factor should corres&ond inthe same wa1 to that latent factorE therefore) an1 combination of theseitems should 1ield the same model fit <abhol*ar et al.) 99=. Theadvantage of &artial disaggregation is that the multivariate as&ect of the model tested is maintained while the model is sim&lified) and thelevels of random error are reduced.

Measurement phase

The objective of the measurement &hase is to isolate modelmiss&ecification and to verif1 that the measures ado&ted a&&ro&riatel1re&resent the latent constructs in the model. %1ntax was written for theconfirmator1 model allowing covariance among all constructs. C1

allowing all constructs to co-var1) the structural &ortion was identifiedwith good fit) and the measurement &art of the model was assessed for reliabilit1) convergent validit1) and discriminant validit1. Themeasurement model fit indices)

%&illovereffectsof afirm

(79

%a

Bonstruct

Bonstruct Iumber of items $ean >actor loadings reliabilit1 <=

e&endence ./ .55 0.75-0.9 0.#T6

b

5. .0 0.9-0.7( 0.95Table !.,$6 4 5.0/ 0.5 0.-0.7 0.5

b escri&tive statistics

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erformance 4.77 .4 0.4-0. 0.0 and construct

IotesHa%tandard deviationE

b &artial disaggregation conducted for these constructs reliabilit1 results

!"#$(5)(

(0

D

o w n l o a d e d b y S U R A B A Y A

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>igure 4.

$odel resultsa

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w(<47= E

(9.0)po0.05E >!E 0.94)%,$, E0.0) arewithinacce&tableranges <air et al.) (00=.

Iext)convergentvalidit1 wasassessed b1two meansHfirst) b1verif1ing that

all scale itemsloadedsignificantl1on their h1&othesiedconstructfactors<+nderson anderbing)9=E andsecond) b1com&aring ameasurement

model wherethe correlationbetween all&ossible &airsof constructswas estimatedwith a modelwhere thecorrelationswereconstrained toero. !n allcom&arisons)

there was asignificantim&rovement

in the &airwise fit. The measurement model also exhibited discriminantvalidit1. The model &resented reasonable fit indices <8line) (005=E with small)non-significant factor covariances in most cases and the shared variance

between all &airs of constructs lower than the average variance extracted for each individual construct <>ornell and #arc*er) 9=.

>inall1) the constructs were tested for scale reliabilit1. arver and $enter <999= suggest that coefficient a) the traditionall1 ado&ted measure of reliabilit1) has some limitationsE for exam&le) in some cases coefficient atends to underestimate the scale reliabilit1 or become inflated when theconstruct has a large number of items. To combat this &henomenon) arver and $enter <999= suggest the use of %3$ reliabilit1 measures. Thecoefficient maximal reliabilit1 <Boefficient E ancoc* and $ueller) (00=) ameasure of construct reliabilit1) was calculated) and Table ! includes theBoefficient for each construct. +ll values were found to be above the 0.70threshold <ancoc* and $ueller) (00=.

iven that the measurement model was assessed in terms of fit andconvergent and discriminant validit1) the next ste& involved testing thestructural model and the theoretical lin*s under investigation.

Structural phase

>ollowing #ittle et al. <(00=) a residual-centered a&&roach for modeling theinteraction in the structural model was used. The model included the interactionterm as a residual-centered item &roduct term individuall1 regressed onto thefirst-order effect indicators of the constructs. The statistics obtained indicateacce&table structural fitH

w(<5= E (0.5) po0.05E >! E 0.9) %,$, E 0.04) which are within desirable

ranges <8line) (005=. >irm sie measured b1 the number of em&lo1ees was testedas a control

variable. Io differences in the &ath coefficients were detected. The results are &resented in >igure 4.

0.14

0.21* 0.66*Operations

RMO with customers LTO with 3PLperformance

0.23* R2=0.47 R

2=0.44

0.59*

Dependence on 3PL

otes: F>)G.3 SRMRG.". a>it indices: (!#

2G2./, pI.. pI.

V E R S I T Y

A t 2 2 : 5 9 0 6 J u n e 2 0 1 6 ( P T )

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,esults

+s shown in >igure 4) a &ositive and significant relationshi& betweena focal firm's ,$6 with the customer and #T6 with the # is found)su&&orting H!. This result indicates the existence of :s&illovers; of ,$6 to other business &artners <e.g. #= of the focal firm. +lso) a

&ositive and significant relationshi& exists between de&endence and#T6) such that focal firms with higher levels of &erceived de&endenceon the # exhibit higher levels of #T6 with the #) su&&orting H2.

The &ositive) significant effect of the interaction term of ,$6 andde&endence on #T6 with the # <see >igure 4= suggests that firmswith higher levels of de&endence will see a stronger im&act from,$6 with their own customers transfer to the #T6 with the #relationshi&) su&&orting H. These results can be inter&reted asevidence that ,$6 can have an effect on other business relationshi&sthat are &erceived to im&act the relationshi& with a customer.

+dditionall1) the results &resented in >igure 4 indicate that the,$6 s&illover im&act on a relationshi& with a # varies u&on the

&erceived criticalit1 of the resources accrued from the relationshi&with a # <measured b1 a focal firm's de&endence on the # thatserves its customer=. !t is relevant to note that the &ath fromde&endence to #T6 is stronger than the &ath from ,$6 to #T6)which indicates that the d1namics of the relationshi& <i.e. degree of de&endence= between focal firm and # might have a greater im&actthan the external im&act of ,$6 on the focal firm's relationshi& withthe #.

+ &ositive) significant effect of #T6 with the # and &erceivedo&erations &erformance ex&erienced in the relationshi& with the #is found) su&&orting H". To test H) which states that the effect of ,$6 on &erformance is mediated b1 #T6) the indirect effect of ,$6on &erformance was tested and results indicate a &ositive <0.4=) non-significant effect. This finding does not &rovide su&&ort for HEtherefore) &artial vs full mediation was not tested. 6verall) the resultsin >igure 4 suggest that) at a certain level) a firm's ,$6 towardcustomers can elicit benefits to a firm's relationshi&s with other

business &artners.

iscussion

%ignificant amounts of research have focussed on the im&ortance of interorganiational conditions as antecedents of collaborative)mutuall1 beneficial relationshi&s between firms and #s. +lthoughthere is extant research in this general area) little research has focussedon the s&illover effects of a firm's strategic orientation toward

building lasting and satisfactor1 relationshi&s with customers on the

nature of the relationshi&s with other business &artners) in the &resentcase) the # that o&erates between a focal firm and its customers.

Testing the relationshi& between a focal firm's ,$6 withcustomers and a focal firm's degree of #T6 with a # &rovidesseveral contributions to the logistics and mar*eting literature. >irst)the results &rovide initial evidence that when such orientations areembedded in a focal firm's strategies and o&erations toward itscustomers) there will be s&illover effects on both the nature andoutcomes of relationshi&s with other &artners) such as #s.Bonsistent with &rior research that demonstrates relational orientationmalleabilit1 de&ending u&on the focal customer <edaa and ,itter)

(005=)thecurrentresearchshows

that thes&illover effectsof ,$6will not

be eFualfor all of a focalfirm's

business &artners.Thenature

of therelationshi& witha

&articular &artner or the

&erceivedde&endenc1 of the firmon that

&artner willim&actthedegreeof effort

&ut intotherelationshi&.

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er

effects of a firm (

!"#$(5)(

((

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+lthough it is found that ,$6 ma1 have a differential benefit de&endingu&on a firm's &artners) it is clear that having ,$6 is still beneficial to a firm.,$6 will have &ositive im&acts on other areas of the firm) such as theo&erational &erformance im&rovements accrued from the #T6 relationshi&with a #. This finding is &articularl1 im&ortant for future research onstrategic orientations. %&ecificall1) environmental and interorganiationalconditions do &la1 a role in the im&lementation and success of suchstrategies.

$oreover) this stud1 further demonstrates that the interorganiationalconditions between a focal firm and its # are the strongest &redictors of relational exchange and) ultimatel1) &erformance. +lthough a :culture; or :orientation; toward such relationshi&s <i.e. ,$6= do &la1 a &ositive role insha&ing a successful relationshi&) nurturing a long-term orientation <#T6= D

and hence the willingness to maintain the relationshi& for a long time andma*e sacrifices for the relationshi& D is the strongest tool in the &ursuit of ahigh-&erformance wor*ing relationshi& with a #.

Manaerial implications

6ne *e1 method for a firm to maintain a lo1al and satisfied customer is for the firm to wor* closel1 with the #) which could be instrumental inassuring a correct) on time) damage-free order deliver1 <8neme1er and$ur&h1) (004=. This is an exam&le of a direct conseFuence of the s&illover effect ex&lored in the &resent research. $anagers at organiations that have,$6 toward their customers) with the objective of nurturing relationshi&sthrough high levels of trust) bonding) em&ath1) and reci&rocit1) shouldunderstand that strong ties via an o&erational relationshi& with their # is ameans to increase customer value. 3ngaging in a long-term) collaborativerelationshi& with a # can lead to im&roved deliver1 &erformance) logisticss1stem res&onsiveness) and reduced logistics costs. +s a conseFuence) thefocal firm's customers should exhibit higher satisfaction levels and lo1alt1.

>rom the &ers&ective of the #) when selecting new clients) it isim&ortant to investigate how these &otential clients relate to their owncustomers. !n other words) #s should investigate whether these &otentialclients embrace ,$6 toward their downstream customers. !f that is the case)the client will be more li*el1 to have #T6 with the #s with which it wor*s.+dditionall1) the client will be more willing to invest in the relationshi& andcollaborate with meaningful information exchange because the client ex&ectsthat the benefits from the relationshi& with the # will) over time) outweigh

current short-term com&romises.!n sum) research has shown that relationshi& mar*eting strategies have the &otential to &rovide great benefits to the firm) such as increased customer satisfaction and &erformance <e.g. $organ and unt) 994E 2eloutsou et al.)(00(=. +dditionall1) assessing a com&an1's ,$6 &rovides a # withanother metric) when considering a &otential client) which &rovides insightinto the Fualit1 of the &ros&ective client be1ond a t1&ical metric such as theex&ected volume of business derived from the client. +lso) findings of thisresearch suggest that an im&ortant strateg1 for #s to &ursue is to wor* onincreasing the de&endenc1 of a client to the #'s services. !f a client

&erceives itself to be de&endent on the services of a #) it is li*el1 to exhibit

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higher levels of #T6towardthe

relations

hi&.

#imitations and future research

Bonsidering some of the limitations of this research and ta*ing the &resentfindings into consideration) a number of avenues for future research are

&ro&osed. The first

D


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limitation is related to the fact that the sam&le was collected withCrailian firms and cultural differences might im&act the relationshi&s

between constructs. !t would be relevant to re&licate the &ro&osedmodel in other countries to test whether cultural differences enhance)or even challenge) the findings.

+nother limitation of the current stud1 is related to the aggregationof the ,$6 construct. >uture studies can ex&lore the relative im&actof the various ,$6 dimensions <i.e. trust) bonding) em&ath1)reci&rocit1= on the relationshi& t1&e with a #. >or exam&le) it can

be investigated whether trust has a higher im&act on &erformance thanreci&rocit1. This issue is not of &rimar1 concern in the current stud1

because a moderation h1&othesis is being tested) and all of the ,$6

items are aggregated so as to reduce variabilit1 and assist modelconvergence.

+nother suggestion for future research is to ex&lore the attitudeheld b1 the #) which is not measured in the &resent research. !f allof the behaviors are d1adic) it is assumed that the # attem&ts tomanage or develo& relationshi&s with its customers. !n order to gainex&lorator1 insight into this issue) several interviews were conductedwith managers of the #) as well as with several of the res&ondentfirms. +necdotal evidence from the interviews suggests that the #used in this stud1 &ursues develo&ing interactive relationshi&s withcustomers of all sies) which im&lies that the attitude held b1 the #in the relationshi& with clients would not im&act the &ro&osed model.

!n conclusion) in the &ursuit of successful relationshi&s with su&&l1chain &artners) #s &rovide great o&&ortunities to enhance suchrelationshi&s through the &rovision of services that enhance theefficienc1 and effectiveness of o&erations. ,esearchers and

&ractitioners can greatl1 benefit from a better understanding of thed1namics of organiational orientations and interorganiationalconditions so as to im&lement the a&&ro&riate governance structure toenable successful logistics outsourcing relationshi&s.

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#ambert) .$. and arrington) T.B. <990=) :$easuring nonres&onse bias incustomer service mail surve1s;) Journal of Business *oistics) 2ol. Io. () &&. 5-(5.

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7/26/2019 IJLM-04-2013-0045



U N I V E R S I T Y

A t 2 2 : 5 9 0 6 J u n e 2 0 1 6 ( P T )

+&&endix %&illover effof a

>actor Bonstruct loadings

*onterm orientation (1tendednessN, Hofer et al., 23#

. Ae ex&ect our relationshi& with this # to last a long time 0.9

(. Ae are ver1 lo1al to this # 0.7/

. $aintaining a long-term relationshi& with this # is im&ortant to us 0.7(

ependence upon P* (ependence of retailer on %endorN, Fanesan, !33"#. !f our relationshi& with this # were discontinued) we would have difficult1 in 0.5

&erforming its services(. !t would be difficult for us to re&lace this # 0.9

. Ae are de&endent on this # 0.75

RM8 6ith customer (Tse et al., 2"#a

)nstructions: The follo6in sentences descri9e the relationship 9et6eenyour company and your companyCs maOor customers manaed 9y this P*.Please indicate your le%el of areementNTrust 0.74

. Ae trust each other (. The1 are trustworth1 on im&ortant things. +ccording to our &ast business relationshi&) m1 com&an1 thin*s that the1 are

trustworth1 &ersons4. $1 com&an1 trusts them

Conding 0.7

5. Ae rel1 on each other

6. Ae both tr1 ver1 hard to establish a long-term relationshi&

7. Ae wor* in close coo&eration

8. Ae *ee& in touch constantl1

3m&ath1 0.

9. Ae alwa1s see things from each other's view

10. Ae *now how each other feels

11. Ae understand each other's values and goals

12. Ae care about each other's feelings

,eci&rocit1 0.7

13. $1 com&an1 regards :never forget a good turn; as our business motto

14. Ae *ee& our &romises to each other in an1 situation

15. !f our customers gave assistance when m1 com&an1 had difficulties) then !

would re&a1 their *indness

8perations Performance (@nemeyer and Murphy, 2"# b

This relationshi& has1

1. !m&roved our logistics s1stem res&onsiveness

2. !m&roved our logistics s1stem information

3. ,educed our o&erational ris*

4. !m&roved our &roduct/service availabilit1

5. +llowed us to achieve logistics costs reductions

7/26/2019 IJLM-04-2013-0045


!

m &r o

ved our inf or ma

tion technolo

g1

3

na bled usto im &lement

changes faster/better

8. rovided us more s&ecialied logistics ex&ertise

7/26/2019 IJLM-04-2013-0045


9. 3nabled us to move from a :&ush; to a :&ull; s1stem Table +!.$easurement items and

(continued # factor loadings

!"#$(5)(

(

Table +!.

D


U N I V E R S I T Y

A t 2 2 : 5 9 0 6 J u n e 2 0 1 6 ( P T )

>actor

Bonstruct loadings

10. ,educed our order c1cle time

11. !m&roved our &ost-sale customer su&&ort

12. el&ed us integrate our su&&l1 chain

IotesHaartial disaggregation conducted for this constructE

b &artial disaggregation

conducted for this construct. There were three indicators) com&osed of randomcombinations of four items. #oadings for the indicators were 0.4) 0.7) and 0.

Borres&onding author +ssistant rofessor +driana ,ossiter ofer can be contacted atH

ahoferOwalton.uar*.edu

To &urchase re&rints of this article &lease e-mailH re&rintsOemeraldinsight.com 6r visitour web site for further detailsHwww.emeraldinsight.com/re&rints

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