This study examines the outsourcing criteria prevalent in the Hotel industry of Pakistan. In doing so, the study investigates the role of trust in the association between…
This study examines the outsourcing criteria prevalent in the Hotel industry of Pakistan. In doing so, the study investigates the role of trust in the association between relationship marketing dimensions—communication, opportunistic behavior, reputation, satisfactory prior outcomes and specific investment—and third-party logistics provider’s (3PL) selection.
Using a close-ended questionnaire, data were collected from 97 hotels of various categories operating in Pakistan and involved in 3PL outsourcing. Partial Least Square–Structural Equation Modeling was employed to estimate the modeled relationships.
With a high predictive relevance of the model, communication, satisfactory prior outcome and reputation were found to have a significant effect on the trust, whereas the results showed a significant mediating role of trust in the association between communication, reputation and 3PL provider’s selection.
The study uses static data from selected firms and cannot be used to analyze behavior over a period of time. Hence, a generalization of results should be made carefully.
Findings imply that for fully capitalizing on the benefits by virtue of their prospective relationship, the managers must streamline their processes and activities according to path directions that endorse a higher degree of trust in their service providers and establish an effective system of communications interconnecting their mutual goals and objectives.
The outcome of the research study illustrated the perceptions of the local businesses with regards to the 3PL service provider(s) selection via the establishment of trust.