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Effect of social capital and transaction cost on multifaceted opportunism in manufacturer-supplier relationship

Yogesh Mungra (Department of Strategic Marketing, Mudra Institute of Communications, Ahmedabad, India)
Prabhat Kumar Yadav (Department of Marketing, Institute of Management, Nirma University, Ahmedabad, India)

Journal of Business & Industrial Marketing

ISSN: 0885-8624

Article publication date: 22 November 2022

Issue publication date: 14 November 2023

211

Abstract

Purpose

A successful relationship between manufacturer and supplier is vital for the pursuit of mutual benefits, which can be affected by one of the partners’ opportunistic behavior, causing disequilibrium in the existing relationship. The extant research has mainly focused on opportunism as a single phenomenon rather than the detectable strong form and unnoticeable weak form of opportunistic behavior in an exchange relationship that affects the relational outcomes in various ways. This study aims to contribute toward explaining the effect of economic and social forces on a strong and a weak form of opportunism and, in turn, its impact on relational outcomes in manufacturer-supplier relationships.

Design/methodology/approach

A sample of 361 manufacturers was drawn randomly using a sampling frame from the western part of India. The authors used covariance-based structural equation modeling to support the proposed model empirically. The authors examined the effect of social capital and transaction cost dimensions on different forms of a supplier’s opportunism.

Findings

All three dimensions of social capital have a different impact on both the forms of a supplier’s opportunism in the relationship. The authors found that social capital moderates the relationship between transaction-specific investments on a weak form of opportunism, while social capital is more valuable in curbing opportunism due to the effect of environmental uncertainty and behavioral uncertainty. The authors found that the supplier’s weak form of opportunism than the strong form has a more amplifying effect on governance costs.

Originality/value

This research contributes in three different ways. First, it inquires about the direct effect of transaction cost dimensions and social capital dimensions on a supplier’s multifaceted opportunism (strong form and weak form) in the manufacturer-supplier relationship. Second, it investigates the moderating effect of social capital on the relationship between transaction cost dimensions and forms of supplier opportunism. Third, the weak form of a supplier’s opportunism affects more significantly than the strong form of opportunism on governance costs.

Keywords

Citation

Mungra, Y. and Yadav, P.K. (2023), "Effect of social capital and transaction cost on multifaceted opportunism in manufacturer-supplier relationship", Journal of Business & Industrial Marketing, Vol. 38 No. 10, pp. 1961-1980. https://doi.org/10.1108/JBIM-09-2021-0442

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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