1. Introduction
In general, it is common to manage each customer individually in a B2B transaction relationship because the B2B transaction has the characteristic of small number's trading. Thus, in this transaction, the management objective is to secure a strong bond with each of the trading partners (Dywer, Schurr, & Oh, 1987; Yi, 2018) and efforts are required to prevent any terminations that may occur at all stages. However, most of the studies in B2B relationship marketing have focused on ways to develop relationships. Hence, it is necessary to study the relationship termination prevention.
The relationship termination is known to be caused by dissatisfaction (Tähtinen & Halinen, 2002). Since dissatisfaction is a different dimension from satisfaction, it is possible that satisfaction and dissatisfaction occur simultaneously (Herzberg, Mausner, & Snyderman, 1959; Herzberg, 1965; Swan & Comb, 1976; Maddox, 1981). As a result, companies that have previously been generally satisfied with their performance with the company may inform that they will close their deal due to a single dissatisfaction. In the case of firms that depend on the other party, it is important to manage the other party's perception in dealing with the firm in order to ensure that the trading relationship is not terminated.
Many previous researches on transaction development and transaction termination have emphasized the importance of trust (Ping, 1993; 1997; Tühtinen et al., 2002), arguing that trust is a factor in developing relationships between companies (Dweyer et al., 1987), and serves to prevent relationship termination (Tähtinen et al., 2002). Even the companies that trusted each other sometimes suffer conflicts because of the differences between them, such conflicts often work in a beneficial functional way (Morgan & Hunt, 1994), such as the sophistication of the related norms, and do not lead to the termination of the relationship. In some cases, however, trust in the other person results in greater disappointment and betrayal (Baldwin, 1971), which can lead to disruptive relationships such as termination (Fagenson & Cooper, 1987).
Unlike BtoC transactions, the intent to terminate the transaction in a BtoB transaction may not be immediately apparent in the transaction termination action due to restrictions such as the high switching cost, low attraction of the alternatives (Hocut, 1998), and desire for stability etc. However, an increase in the decision maker‘s willingness to terminate a transaction may result in action when the contract expires, the emergence of other alternatives (Ping, 1993), changes in prices or contracts, and changes in the environment (Halien & Tähtinen, 2002). Lots of the researches that dealt with the termination intention (Halinen & Tähtinen, 2002; Ping, 1993) have focused on these transaction conditions, but the researches are also being published on the characteristics of the persons involved in the transaction, such as that the relationship between the employees affects the business transaction (Bono, et al., 2002). Recently the relationship between trust and betrayal, traditionally addressed in psychology, is also discussed in the field of management (Caldwell, et al., 2008). Based on these research streams, this paper is meaningful in that it explores the purchasing manager‘s attitude toward the trading company.
In previous studies on conflict, trust has been considered as an antecedent. However, if we consider trust as a moderating variable in terms of prior expectations of the other's actions that will occur in the transaction process, we can identify a new role of trust in trading partners' intention to terminate the relationship. Therefore, this study aims to provide the guidelines necessary to establish a differentiated strategy for managing their willingness to terminate a transaction, through the division of relationships between companies that have high trust in it and those that do not.
2. Literature Review
2.1. Relationship Termination Intention
Dwyer, Schurr, and Oh (1987) argued that while both parties need to make efforts to maintain and develop a relationship in a transaction, the termination of the transaction may be sufficient by one side, even though the other side wants to maintain the transaction relationship. In addition, Dwyer et al. (1987) further explains the termination of phase 5 based on the research of Duck (1982) and Baxter (1985), classifying the transaction relationship as a five-step development process of recognition, exploration, expansion, commitment and termination. The termination could occur throughout the process from cognition to commitment, it was caused by dissatisfaction (Doyle, Corstjens, & Michell, 1980; Michell, 1987; Ping, 1995; Durden, Orsman, & Michell, 1997) and injustice (Tähtinen et al., 2002). Those who want to terminate the transaction are not interested in long-term trading relationships in the transaction with the other party and are willing to have a short-term relationship by making a sober assessment of the counterpart company (Tähtinen et al., 2002). This breaks the relational norm (Jap & Ganesan, 2000). Management of conflicts and willingness to terminate alleviate the conflict and strengthens the confidence in the relationship of the counterpart is an important marketing management area for B2B transactions, since various sources of conflict between suppliers and buyers in B2B transactions can promote conflict and develop into a phase of the counterpart's relationship termination intention.
2.2. Antecedents of Conflicts
2.2.1. Goal Incongruity
Goal incongruity occurs at the fundamental difference in goals (Song, Xie, & Dyer, 2000) between companies and is at the core of conflict-causing (Meschi & Roger, 1994; Thanh & Toan, 2018). Goal mismatch refers to differences in values and ideologies of financial goals between trading companies (Assael, 1968), which arise due to violations of relationship norms or transaction procedures to achieve one's own selfish goals. Because humans are inherently inclined to pursue their own interests, even in B2B relationships there is a goal incongruity by persuit more profit than the other (Song et al., 2000). When the goals are congruent, they tend to yield and cooperate with each other to achieve common goals based on the same values, but when the goals are incongruent between partners, there is a tendency to make less mutual cooperation (Dyer & Song, 1997; Tjosvold, 1991). In other words, frequent friction caused by goal incongruity reduces commitment and increases the desire to terminate the transaction relationship.
2.2.2. Domain Dissensus
Domain Dissensus occurs when the parties in a transaction perceived that they are violated by their responsibilities and authority over each other's roles (Yi, Lee, & Dubinsky, 2010). In other words, inconsistencies are caused by ambiguity in the role which is expected from the counterpart and by the vagueness in the scope of the role (Oliver & Brief, 1978). In B2B transactions, conflicts arise due to unclear responsibilities and powers because the contracts do not have clear agreements about their rights and obligations, or each other's role to perform. This type of dissensus induces conflict such as: attempting to hand over duties to each other, denying services that incur costs, such as maintenance of the product, or failing to fulfill liability obligations.
2.2.3. Perception Difference
Perception differences result from different perceptions of the same phenomenon (Yi et al., 2010). In a B2B transaction, suppliers and buyers judge each other according to their own needs and motivations, resulting in perceptual differences in the same phenomenon. Since such perception differences are caused by lack of communication, open communication of sufficient information between the partners to resolve the conflict caused by perception differences can be used to alleviate the conflict and strengthen the confidence in the relationship persistence (Mohr & Nevin, 1990).
2.3. Trust
Trust is defined as the belief that the partner in the transaction will carry out the contract, document, or promise correctly (Morgan et al., 1994) and the belief that the partner will perform actions that will bring positive results to it and will not take unexpected actions that will have negative consequences (Anderson & Narcus, 1990; Kim, 2016). Mayer, Davis, and Schoorman (1995) stated that trustors are expected to deliver meaningful and important value to the trustee in uncertain circumstances, and even risk-taking confidence in their role performance. Trust is a willingness to rely on the actions of the trustee based on the expectation that the trustee will act positively even if there is no control or monitoring of the trustee. This is regarded as a kind of belief or confidence in the other party (Ganessan, 1994). Therefore, trust is a set of expectations for the relationship between the parties to the transaction (Zucker, 1986) that are formed on the basis of positive expectations of the other party (Rousseau, Sitkin, Burt, & Camera, 1998) and implies a belief in risks and commitments. Thus, trust plays a key role in the development of the transaction relationship (Dwyer et al., 1987).
2.4. Hypothesis building
2.4.1. Main Effects: Conflict and Relationship Termination Intention
2.4.1.1. Goal Incongruity and Relationship Termination Intention
Goal incongruity mainly results from conflicts of interest or scarcity of resources between each other, and a goal that is difficult to achieve together causes opportunistic behavior on either side (Das, 2006).
These conflicts are difficult to resolve without compromise or concession, and if they are not resolved, they can lead to extreme distrust between each other or even catastrophic consequences, such as contract break-ups, and inevitably lead to the termination of the current trading relationship and the formation of other trading relationships (Tähtinen et al., 2002). Relationship termination can be caused by one side and the dissatisfaction caused by the goal incongruity (Ping, 1995; Durden et al., 1997) appears to be hostile and leads to the termination of the relationship (Dweyer et al., 1987).
Based on the above reasons, it was expected that the greater the goal incongruity between the purchaser and the supplier, the greater the willingness to terminate the relationship, thereby establishing the following hypothesis.
H1: The greater the goal incongruity, the greater the intention to terminate the relationship.
2.4.1.2. Domain Dissensus and Relationship Termination Intention
B2B Conflicts arise when entities in a relationship are perceived as being unequal to their rights and obligations and roles in performing their jobs, or when the job of the counterparties is not as well performed as they expect, and when the parties to the transaction are not clearly defined for their roles (Stern & Gorman, 1969). Domain Dissensus is often caused by the insufficient ability or quality of the members of the transaction. For example, conflicts arise, when a trading company and a member who lacks experience or is less able to work or fails to clearly recognize his or her role. Frequent such conflicts in recurring trading relationships result in less satisfaction, less immersion in the relationship. Thus, if these conflicts are not resolved, there is an increased possibility of terminating the relationship and seeking a new one (Anderson et al., 1990).
Based on these reasoning, the larger the conflicts between B2B trading companies due to the domain dissensus, the greater the intention to terminate the transaction relationship, resulting in the following hypotheses:
H2: The greater the domain dissensus, the greater the intention to terminate the relationship.
2.4.1.3. Perception Difference and Relationship Termination Intention
Perceptual differences are the differences in perceptions that result from different interpretations based on their own reality and environment for the same phenomenon (Yi et al., 2010), which create conflicts. Consider, for example, a situation in which a buyer in a relationship misses a chance to sell a product to his or her dealer. The buyer perceived that due to the supplier's lack of flexibility, the shipment has been delayed. In comparison, the supplier believes this is due to the purchaser's lack of safety stock. Thus, if perception difference between partners are not adequately resolved or controlled, the likelihood of termination increases (Morgan et al., 1994).
The greater the conflict between companies due to perceived difference, the greater the willingness to terminate the relationship, which led to the establishment of a hypothesis.
H3: The greater the perceived difference, the greater the intention to terminate the relationship.
2.4.2. Moderation Effects of Trust on the Relationship between Incompatibility and Relationship Termination Intention
2.4.2.1. Moderation Effect of Trust between Goal incongruity and Relationship Termination Intention
The perceived goal incongruity between the parties to the transaction means that they find it difficult to achieve their goals in a cooperative manner because the objectives or values of the other party differ from theirs. This leads to disappointment with the other party and skepticism about the efforts to maintain the relationship, resulting in a conflict of relationship. What a company in a transaction relationship perceive a goal incongruity means that the counterparty's goals or values are different from its own, making it difficult to achieve the goals it sets in a cooperative manner. This leads to disappointment with the other party and skepticism about the efforts to maintain the relationship, resulting in a conflict of relationship. From the buyer's perspective, if he or she considers the relationship with the supplier to be a common relationship, but the counterparty responds with an exchange relationship, the buyer feels betrayed (Clark & Waddell, 1985). This situation is perceived as a betrayal of what has been trusted and traded with suppliers, making buyers angry and resistant (Baldwin, 1971; Kong, et al., 2020). In a relationship with a deeply trusted opponent, one feels betrayed when one realizes that the other party is engaged in a relationship for a different reason than he is. Gregorire and Fisher (2008) also argued that when a trusted opponent has a norm violation, a great sense of betrayal occurs. In interpersonal relationships, a sense of betrayal refers to a trustee's emotional perception of a violation or infringement by the other party (Elangovan & Shapiro, 1998). Thus, by feeling betrayed by the supplier who had been perceived as a close relationship implicitly or explicitly undermined the relational norm and beyond the acceptable area (Finkel, Rusbult, Kumashiro, & Hannon, 2002), the buyer will engage in negative behavior to seek revenge or reward from the supplier (Fagenson et al., 1987).
A sense of betrayal presupposes trust that the partner will act according to its own expectations (Elangovan et al., 1998). Therefore, if buyer experience a goal incongruity in the relationships with the much-trusted counterpart, it will bring a sense of betrayal, which will further increase relationship termination intention.
Based on these reasoning, it can be inferred that the goal incongruity will have a greater positive effect on the intention to terminate the relationship, if there is a higher trust in the supplier.
H4: The positive impact of the goal incongruity on the relationship termination intention will be greater when trust is higher.
2.4.2.2. Moderation Effect of Trust between Domain Dissensus and Relationship Termination Intention
Domain dissensus refers to the state of confusion over each other's expected roles in dealing with the transactional company (Yi et al., 2010). Domain dissensus creates conflicts because of differences in views on who should play what role, although the parties to the transaction have a common goal of getting things done well. Trust tends to accommodate the apparent inconsistencies in the interaction process, as well as to minimize any misunderstanding of each other that may arise during the performance of the task based on the trust (Mishra, 1996). Domain dissensus arising from the ambiguity of the scope of work, responsibility and authority expected of the other party in the transaction relationship (Yi et al., 2010) increase the likelihood of a termination of the transaction if the conflict is not resolved or controlled properly(Morgan et al., 1994). However, if there is trust between the parties to the transaction (Morgan et al., 1994), conflicts can be viewed in a beneficently functional way (Morgan et al., 1994), and the conflicts are taken as an integral part of carrying out the transaction relationship (Anderson et al., 1990). with the expectation that the conflict from domain dissensus would reduce the effect on the relationship termination intention, if there is a high trust that a buyer can solve the conflicts based on trust in the reciprocal benefit of the other party. Based on these reasoning, the following hypothesis was derived.
H5: The positive impact of the goal incongruity on the relationship termination intention will be greater when trust is lower.
2.5. Research Model
Based on the hypothesis, the research model is described as follows. The conflict causes of the buyer's perception of the supplier were divided into goal incongruity, domain dissensus and perception difference.
Figure 2: Research Model
The larger the conflicts caused by goal incongruity (H1), domain dissensus (H2) and perception difference (H3), the greater the willingness to terminate the relationship. In addition, there are two moderating effect hypotheses that trust would have moderating effects in the relationship goal incongruity (H4) and Domain dissensus (H5) and the intent to terminate the relationship.
3. Methodology
3.1. Sample and Measurements
3.1.1. Sample
In this study, the survey method for CEOs or purchasing managers of small businesses based in Daegu and North Gyeongsang Province was used to answer the question with the largest purchase amount in mind among the companies that the companies are dealing with. The average number of employees of the buyer companies that responded to the survey was 70.9 and the average duration of the transaction with the supplier was 4.5 years.
The 274 respondents had the following characteristics: household (0.4%), non-metallic mineral product (0.4%), regular nuclear fuel, coke and petroleum products (0.7%), regular clothing, fur and clothing accessaries (0.7%), bags and shoes (1.1%), drugs and medical products (1.5%), watches (1.5%), chemicals (5.8%), wood equipment and wood products (1.8%), metal processing units (12.4%), other machinery and machinery equipment (15.3%), and others (24.1%).
3.1.2. Measurements
All the measurement questions used in the survey used items that have been validated with reliability in previous studies. Looking at each of the questions, the goal incongruity was measured by three items adapted from Song et al. (2000). domain dissensus and perception difference were measured by three questions each based on Yi et al. (2010) modified to fit this study. Trust was measured by five items of Morgan and Hunt (1994) and Doney and Cannon (1997). A total of three questions were used for analysis by removing two questions that reduce reliability, and the relationship termination intention was measured by 3 items adapted from Ping (1995).
3.2. Measurement Test
3.2.1. Reliability and Validity
In this study, reliability was measured using the Cronbach's ⍺ coefficients used to verify that there is internal consistency between items consisting of two or more questionnaires. As shown in Table 1, it has been shown that the Cronbach's ⍺ value for all factors is derived at or above .7 to ensure internal consistency (Nunally & Bernstein, 1994). In addition, the average variance extraction index and the composite reliability of all factors were found to be above the .6, confirming the internal consistency of all indicators.
Table 1: Results of Validity and Reliability Test
3.2.2. Goodness of Fit Indices
Looking at each goodness-of-fit index for the analytical model based on items obtained from the confirmatory factor analysis, we can determine that the indicators used in this study are valid, with the meeting the recommended criteria:
3.2.3. Discriminant Validity
In this study, a CFA was performed to test for verification of concentration validity and discriminant validity. Usually, if the correlation coefficient value is 0.9 or higher, it should be suspected of discriminant validity. As Table 2. shows, the correlation between domain dissensus and perception different is .662, with other correlation coefficient values being lower. In order to establish the discriminant validity, the square of the correlation coefficient values of all variables must be less than the AVE value of that variable. Comparing the correlation coefficient values and the AVE value did not give any results to doubt the discriminant validity. It can be said these criteria have been met, so the determination of the variables used in this study has been confirmed (see table 2).
Table 2: Results of Correlation Analysis Matrix
Diagonal : root AVE
3.3. Hypothesis results
In order to minimize the multicollinearity problem that would occur in verifying the moderation effects, the meancentering was used (Aiken, West, & Reno, 1991), and the empirical analysis results were presented and interpreted according to the method presented by Aiken et al. (1991).
Hierarchical multiple regression analysis was performed to verify the hypotheses derived from this study. For this purpose, the research model was verified step by step, as shown in Table 3. First, in model 1 only the control variables that could affect the willingness to terminate the relationship, such as the number of employees and the duration of the transaction, were examined. In model 2, three variables - goal incongruity, domain dissensus, and perception difference - were added to model 1 to verify hypothesis 1, hypothesis 2, and hypothesis 3. In Model 3, the moderation effects of trust were verified by the addition of three additional variables and the interaction terms of trust.
Table 3: Results of Research Model Tests
3.2.3. Discriminant Validity
In this study, a CFA was performed to test for verification of concentration validity and discriminant validity. Usually, if the correlation coefficient value is 0.9 or higher, it should be suspected of discriminant validity.
As Table 2. shows, the correlation between domain dissensus and perception different is .662, with other correlation coefficient values being lower. In order to establish the discriminant validity, the square of the correlation coefficient values of all variables must be less than the AVE value of that variable. Comparing the correlation coefficient values and the AVE value did not give any results to doubt the discriminant validity. It can be said these criteria have been met, so the determination of the variables used in this study has been confirmed (see table 2).
model 1: \(Y = \alpha + \beta_1x_1 + \beta_2x_2+\epsilon \)
model 2: \(Y = \alpha + \beta_1x_1 + \beta_2x_2+ \beta_3x_3 + \beta_4x_4+ \beta_5x_5+\epsilon \)
model 3: \(Y=\alpha+\beta_1x_1+\beta_2x_2+\beta_3x_3+\beta_4x_4+\beta_5x_5+\beta_6x_6+\beta_7x_6x_3+\beta_7x_6x_4+\beta_7x_6x_5+\epsilon \)
\(Y\) = Relationship termination intention
χ1 = Number of employee
χ2 = Relationship duration(year)
χ3 = Goal incongruity
χ4 = Domain dissensus
χ5 = Perception difference
χ6 = Trust
βχ = Standardized coefficient
In this study, F-tests of changes in R2, the criteria presented in studies such as Slater and Naver (1994) and Taylor and Baker (1994) were performed in order to identify the effects of differences on the willingness to terminate relationships and the moderation effects of trust. The results of testing the hypotheses according to the verification procedures are as shown in Table 3. First it is checked whether models that were made by adding variables step by step would be better in prediction of the willingness to terminate a relationship, and how the variables added by each step would account significantly for the distribution of the relationship termination intention.
First of all, the results of research model 1 that consists of only control variables showed that the research model explained 2% of the willingness to terminate a relationship, and the model was significant. Among the independent variables, the number of employees in the Company was shown to have a significant effect on the willingness to terminate the relationship (b=0.158), but the duration of the transaction did not have a significant effect (b=0.035).
Second, in Research Model 2, three kinds of antecedents of conflicts were added to Study Model 1: goal incongruity, domain dissensus, perception difference. As a result, the five variables explained 33.4% of the variance of willingness to terminate the relationship, and this model was significant. Three variables added in study model 2 showed an improvement of 0.332 in R2 over study model 1, and the variance in R2 was significant at 0.05 level. Looking at the influence of individual variables, the goal incongruity (b=0.352) and the domain dissensus (b=0.267) have a significant effect on the willingness to terminate the relationship, but the perception difference (b=0.021) has no direct effect on the willingness to terminate the relationship.
Third, study model 3 is the proposed model to confirm the moderation effect of trust, and four additional variables were added to model 2: 'trust', 'goal incongruity X trust', 'domain dissensus X trust' and 'perception difference X trust'. As a result, the totally eight variables explained 36% of the variance of willingness to terminate the relationship, and the overall model was significant. Comparing R2 of study model 3 to R2 of study model 2, the difference is 0.026, which is a significant difference at the level of 0.05. Looking at the influence of individual variables, it has been shown that the 'goal incongruity X trust‘ has a significant impact on the willingness to terminate the relationship (b=0.148). In other words, experiencing a goal incongruity while the trust is high can be interpreted as a greater willingness to terminate the relationship than the inconsistency experienced in the low trust state. In contrast, 'domain dissensus X trust' has been shown to have a significant negative impact on the willingness to terminate the relationship (b=-0.246). In other words, experiencing domain dissensus while trust is high can be interpreted as less willing to terminate the relationship than the inconsistency experienced in a less trust state. It means that because role mismatch can be solved based on trust, trust has a negative moderation effect. but if there is trust in the supplier, the goal incongruity is a difficult problem to solve, which has a positive moderation effect on the willingness to terminate the relationship.
With the empirical results of this study there are two implications: First, the goal incongruity and the domain dissensus were shown to have a direct impact on the willingness to terminate the relationship, but unlike previous studies, perception difference could not be identified directly. These results are inferred as the result of reflecting the respondent characteristics and the industrial structure characteristics of this study, in which the buyer's staff responded with in mind the relationships with supplier. Second, experiencing a goal incongruity in a high trust state increases the willingness to terminate the relationship more than the incongruity experienced in a low trust state. In comparison, it was found that experiencing domain dissensus while trust is high reduces the willingness to terminate a relationship rather than the dissensus experienced in a low trust state.
4. Results and Discussion
4.1. conclusion and implication
There is always a possibility of differences in B2B transactions. Based on existing channel management studies, this study looked at the impact of goal incongruity, domain dissensus and perception difference on the willingness to terminate relationships. In addition, this study focused on trust and used it as a moderation variable. In doing so, it was confirmed which cause of difference had a greater effect on the willingness to terminate the relationship, depending on trust.
Looking at the theoretical implications of this study, although many previous researches have concluded that high trust reduces willingness to terminate a relationship, this study has demonstrated that high trust may increase willingness to terminate a relationship in goal incongruity. This is meaningful in presenting different results from previous studies that suggest that trust serves to improve the relationship and reduce the willingness to terminate the relationship.
The practical implications of this study are as follows: First, in a B2B transaction relationship, the supplier should be careful to manage buyers with high trust not to recognize a goal incongruity in its relationship. Second, in relation to a buyer with low trust, the supplier should be careful not to recognize a domain dissensus, and should strive to improve its trust with the purchaser.
4.2. Limitation and further research
Although this study produced important theoretical and practical implications, it also has limitations. The results of this study, which includes small and medium-sized manufacturers in Daegu and North Gyeongsang Province, have limitations in generalizing them. In addition, the study did not control the size of revenue and the characteristics of the industry. It would be better to generalize the results if the research included companies from other regions or companies of a specific size. Key Informant in this study is the purchasing decision maker. Depending on the size or nature of the company, there were cases where the person in charge of the purchase was separate, and the CEO made a decision on the purchase. Each company identified who the purchasing decision maker was and received the survey accordingly, but did not separate the positions of the respondents. The position of the purchasing decision maker needed to be analyzed separately. Future research directions are as follows. First, since this study examined the case of strong buyers and weak suppliers, it is necessary to verify that the forces are balanced or asymmetric. Second, it is necessary to examine the moderation effects of the multi-dimension of trust rather than the single-level trust. Third, it is necessary to distinguish the various causes of conflict into relationship conflict and task conflict, and to verify the research model that has made the sense of betrayal variable.
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