Academic journal article Journal of Applied Management and Entrepreneurship

The Influence of Communication and Information Quality on Trust in the Small Business Supply Chain

Academic journal article Journal of Applied Management and Entrepreneurship

The Influence of Communication and Information Quality on Trust in the Small Business Supply Chain

Article excerpt

Introduction

It is recognized that organizations use alliances and partnerships to leverage performance vis-à-vis environmental uncertainty. Indeed, an emerging body of research focuses on partnerships undertaken by small businesses (Beekman & Robinson, 2004; Gelinas & Bigras, 2004; Richter, 2004). We know, for instance, that partnering with small firms offers benefits to incumbent firms (Afuah, 2001). However, while we understand the legitimacy benefits that small firms can obtain through such partnerships, we know less about the specific processes by which small-business partnerships improve the quality of their collaborations.

We have moved from Gulati's (1998) challenge to unravel the "interesting yet vexing" problem of alliance performance. We know that partner-specific skills accumulate over time leading to improved performance over the duration of an alliance (Lavie & Rosenkopf, 2006; Soda, Usai, & Zaheer,2004) and that the embeddedness obtained through trusted, deep partnerships enhances performance (Andersson, Forsgren, & Holm, 2002). However, despite this repository of research, a great many alliances fail (Gulati, Sytch, & Mehrota, 2008) while others persist despite failing to produce desired benefits (Inkpen & Ross, 2001). Improving the quality of such alliances is often attributed to improvements in trust, information sharing and communication (Johnston, McCutcheon, Stuart, & Kerwood, 2004).

Even so, a great deal of our research on alliances emphasizes outcomes specific to larger, publicly traded firms. This bias in the strategy literature related to performance manifests because performance measures for such firms are more readily available than are such measures for small firms. Small firms are often left unstudied (or perhaps under-studied) in strategic research. While understandable, this lack of focus may generate findings regarding firm-alliance performance relationships that do not, in fact, generalize to small businesses. We know, in general, that small businesses often lack the managerial expertise of larger counterparts (Chaganti & Parasuraman, 1996), and we know that small businesses typically lack resource endowments which might sustain them during periods of uncertainty (Porter, 1 99 1 ). We further recognize the importance of partnerships and alliances for small businesses, both for the resources they bring, and also for the legitimacy they confer (Lerner, 1999). What we know less about is how small business managers and owners utilize communication and information sharing as a conduit to developing more trusting partnerships.

Taken together, these findings suggest the importance of examining the characteristics of trust, communication and information quality for small businesses. Lacking the resources of their larger partners, small businesses find themselves highly reliant on the quality and trustworthiness of their larger partners (McDowell, Harris, & Zhang, 2009). This study seeks to examine how small business managers rely on communication and information quality as correlates to trust (see Figure 1).

The remaining sections proceed through four areas. First, we discuss the relevance of a small business emphasis in research. Second, we examine extant literature and detail a theorygrounded model specifying an expected relationship between communication, information quality and emergent trust in partnerships. We then proceed to details of the study at hand. Finally, we conclude this with a discussion of our findings and discuss future research directions.

Literature Review

Small Business

The existence and performance of small businesses are critical to the economic health of a nation. Current research provides evidence that small businesses provide flexibility (Gelinas & Bigras, 2004), learning opportunities (Beekman & Robinson, 2004), job creation (Audretsch, 2003), along with innovation and rapid sales growth possibilities (Connell, 2009; Lerner, 1999). …

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