Relationship between trust and cooperation an empirical study of inter organisational relationships in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY - NGUYEN NGOC CUONG RELATIONSHIP BETWEEN TRUST AND COOPERATION: AN EMPIRICAL STUDY OF INTER-ORGANIZATIONAL RELATIONSHIPS IN VIETNAM MASTER'S THESIS Hanoi, 2020 VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY - NGUYEN NGOC CUONG RELATIONSHIP BETWEEN TRUST AND COOPERATION: AN EMPIRICAL STUDY OF INTER-ORGANIZATIONAL RELATIONSHIPS IN VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 8340101.1 RESEARCH SUPERVISORS: Assoc Prof Dr VU ANH DUNG Assoc Prof Dr KODO YOKOZAWA Hanoi, 2020 TABLE OF CONTENTS LIST OF TABLES iii LIST OF FIGURES iv LIST OF ABBREVIATIONS v ACKNOWLEDGEMENT vi ABSTRACT vii CHAPTER 1: INTRODUCTION 1.1 Practical issues 1.2 Theoretical gap and research objective CHAPTER 2: LITERATURE REVIEW 2.1 Trust 2.2 Relationship commitment 2.3 Cooperation 2.4 Theoretical gap 2.5 Hypothesis formulation 2.6 Research model 10 CHAPTER 3: METHODOLOGY AND DATA COLLECTION 11 3.1 Research scope 11 3.2 Research design 11 3.3 Research scales 12 3.4 Process of collecting data 13 3.5 Characteristics of respondents 14 3.6 Descriptive statistics analysis 17 3.7 Reliability and validity 19 i CHAPTER 4: DATA ANALYSIS AND DISCUSSION 23 4.1 Exploratory factor analysis of CT and AT 23 4.2 Correlation coefficients analysis 24 4.3 Regression analysis 26 4.3.1 Regression with AT as dependent variable 26 4.3.2 Regression with RC as dependent variable 27 4.3.3 Regression with COO as dependent variable 29 4.4 Discussion 32 CHAPTER 5: CONCLUSION 35 5.1 Theoretical contributions 35 5.2 Managerial implications 36 5.3 Limitations and recommendations 37 REFERENCES 39 APPENDIXES 45 APPENDIX 1: ITEMS IN MEASUREMENT SCALES 45 APPENDIX 2: QUESTIONNAIRE SURVEY 46 ii LIST OF TABLES Table 3.1 Demographic characteristic of respondents 14 Table 3.2 Mean and standard deviation 17 Table 3.3 Cronbach’s Alpha 20 Table 4.1 EFA of CT and AT 23 Table 4.2 Transforming representative factors 24 Table 4.3 Correlation coefficients Matrix Analysis 25 Table 4.4 Regression with AT as dependent variable 26 Table 4.5 Regression with RC as dependent variable (CT is predictor) 27 Table 4.6 Regression with RC as dependent variable (AT is predictor) 28 Table 4.7 Regression with COO as dependent variable (RC is predictor) 29 Table 4.8 Regression with COO as dependent variable (CT is predictor) 30 Table 4.9 Regression with COO as dependent variable (AT is predictor) 31 Table 4.10 Summary of the hypothesis testing 32 iii LIST OF FIGURES Figure 2.1 Conceptual model 10 Figure 4.1 Conceptual model in Vietnam 32 iv LIST OF ABBREVIATIONS AT Affective trust COO Cooperation CT Cognitive trust EFA Exploratory factor analysis RC Relationship commitment v ACKNOWLEDGEMENT Firstly, I would like to express deepest gratitude to my parents, who always respect my decisions and support me for what I have committed Their belief and supports have made my confidence to face challenges and move forward Likewise, I am grateful to my supervisors Associate Professor Kodo Yokozawa and Associate Professor Vu Anh Dung for making this research project possible Associate Professor Kodo Yokozawa has been kindly, patiently and enthusiastically accompanied and facilitated me in the process of researching from the idea formation to every step on how to a good scientific research Whilst, Associate Professor Vu Anh Dung critically evaluated the matters and logically explained the reasons of my research His advices helped me recognize the limitations and learnt to improve them in the research Thanks to my supervisors, my knowledge in the academic research has been truly enriched I am also thankful to all experts, lecturers and staffs from Japan International Cooperation Agency (JICA), Vietnam National University (VNU), Yokohama National University (YNU), Vietnam Japan University (VNU), Waseda University as well as those, who participated in the questionnaire survey Thanks to all of you, I really had a memorable and enjoyable time during my post graduate study Last but not least, I would like to send a special thank you to Dr Yoshifumi Hino I sincerely appreciated and enjoyed the time and the process of learning quantitative research, economics and Japanese language from him Nguyen Ngoc Cuong vi ABSTRACT This study examined the relationship between trust and cooperation in an interorganizational level A conceptual model was proposed here, which consisted of affective trust, cognitive trust, relationship commitment and cooperation A total of 90 usable questionnaires were explored to test the conceptual model using the exploratory factor analysis, correlation and regression analysis on SPSS 26.0 in a current emerging economy The study result presented an insignificant direct relationship between affective trust and cognitive trust with cooperation Cognitive trust was highlighted as the foundation for interorganizational relationship while affective trust was emphasized with the stronger impact on relationship commitment, which influenced positively cooperation Further managerial implications for practices, limitations and recommendations were also discussed vii CHAPTER 1: INTRODUCTION 1.1 Practical issues Cooperation played crucial roles in business practices since it can promote relational exchanges, effective competitions, enhances a flow of information and business transaction (Morgan & Hunt, 1994) Despite its important roles and benefits, business practicers find it challenging to achieve effective cooperation in Vietnam The characteristics of the environment here was described with some frequencies of one time deal approach, inadequacy of company profile data the shortage of proper procedures, or the absence of developed infrastructures (Nguyen & Rose, 2009) It is quite common to experience the late time of product delivery, the unqualified product quality or the lack of delivering professional customer services from the suppliers here All of these caused difficulties for focal firms to foster relationships with the suppliers to achieve shared goals and have motivations to maintain the exchanged relationships Thus, this research is motivated to find out the key for effective cooperation to be applied in Vietnamese business practices Studying inter-organizational cooperation in the literature review, the researcher was persuaded with the commitment-trust theory by Morgan and Hunt (1994) Accordingly, trust and relationship commitment were explained to be the keys to make cooperation effective Morgan and Hunt (1994) also proposed important factors that impacted trust and relationship commitment such as the termination cost, benefits, shared values, communication or opportunistic behaviors, which helped the researcher gain insight ideas of how to achieve these keys for effective cooperation 5.3 Limitations and recommendations The sample size was the limitation of this research Despite the nature of this study and its targeted samples made it challenging to collect a large scale of sample size, it is suggested to consider other methods to increase its sample size For instance, mentioning some practical contribution of this research may help to increase the willingness to participate from business practicers who deny to participate without seeing the benefits The print survey is also suggested to increase the validity and reliability of collected data It is more valuable to collect data from the focal firms’ perspectives; however, it will be more objective if the researcher can also access the data from the supplier’s perspective Therefore, it is recommended for further research to consider both perspectives for data collection It was also captured that in the scale measurement of COO1, the question was so vague that made it hard for the respondents to answer Whilst, the result of mean value and standard deviation from question item COO2 recorded a bias result in answering the questions Even though the measurement of cooperation was consistent and based on reputable theory, the items of COO need to be revised for better assessment in research in the near future In this research, the practical contribution was clear but not persuasive enough since the relationship between other variables from the based theory that affected on trust and relationship commitment were assumed rightly without testing Therefore, it was recommended for other researchers to consider testing the impact of these variables on trust and relationship commitment together to strengthen the practical contribution 37 The research also faced limitation in making concise conclusion of relationship and in exploring the complex of interorganizational trust and the hidden reasons behind the relationship among them Therefore, it was encouraged to combine both quantitative and qualitative research for more remarkable exploration In addition, a study in the comparison of two nations, which represent different market economy with the risk as a moderating variable, would make this research highly valued and much more interesting in explaining the situations Last but not least, the difficulties to make general evaluation toward all major suppliers of the corporation was mentioned by the supervisors of Heineken corporation and Vinamilk corporation, who made evaluation only on what they experienced from their departments Even though there were only two cases (2.2%) of the sample, it raised a possibility in which each department in a large corporation might perceived differently; therefore, it is suggested for further studies to explore the difference in each department in corporation There might be some remarkable findings from this accordingly 38 REFERENCES Abosag, I., Tynan, C., & Lewis, C (2006) The Commitment-Trust Theory: The British and Saudi Arabian Cross-National Perspectives Aron, A., & Aron, E (1999) Statistics for psychology (2 ed.) 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