Paper info

The Impact of Psychological Contracts Upon Trust and Commitment within Supplier-Buyer Relationships: A Social Exchange View

Russel P J Kingshott

The paper was published at the 20th IMP-conference in Copenhagen, Denmark in 2004.

Central to this study is the emerging body of knowledge describing how social exchange relationships are being nurtured. By focusing upon social exchange theory it was shown that psychological contracts play an important role in helping build customer commitment. A random sample of 343 Australian distributor firms from within the motorized vehicle industry was used to test a model developed on the basis of social exchange theory. Psychological contracts are perceptual in nature and were found to encompass reciprocal obligations stemming directly from the relational orientation between suppliers and distributors. This construct was also shown to have a positive impact upon the level of trust and commitment within the relationship. These findings have significant managerial implications for the manner in which managerial decision makers are modelling the firm-customer relationship because trust and commitment are essential elements in the development and maintenance of such relationships.The theoretical and managerial implications discussed have highlighted the need for furtherstudies because there are deficiencies in the marketing literature pertaining to this importantconstruct.