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The impacts of trust and contracts on opportunism in the 3PL industry: The moderating role of demand uncertainty

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Abstract

Logistics outsourcing has become an important strategy for companies seeking to gain a competitive advantage. However, opportunistic behavior often arises in the process of outsourcing, and such behavior can damage the collaborative relationships between third-party logistics (3PL) providers and users. By applying the lenses of transaction cost economics, social exchange theory and contingency theory, this study investigates how transactional (i.e., contracts) and relational safeguards (i.e., trust) curb opportunism under demand uncertainty. The data were collected from 247 manufacturing and service industries in China. The results show that trust and detailed contracts mitigate opportunism directly, but contract application aggravates the hazards of opportunism. In addition, demand uncertainty moderates the relationship between contract application and opportunism. Trust, however, both enhances contract application and enables detailed contracts. Therefore, trust indirectly enhances opportunism through contract application and indirectly reduces opportunism through detailed contracts. This study provides theoretical contributions and managerial insights for 3PL relationship management.

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[Huo, B.; Ye, Y.] School of Management, Zhejiang University, Hangzhou, China

[Zhao, Xiande] China Europe International Business School, Shanghai, China; School of Business Administration, The South China University of Technology, Guangzhou, China


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Source

International Journal of Production Economics

Year:2015

Volume:170

Page:160-170

ESI Discipline:ENGINEERING;

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