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Trust and the Decision to Outsource: Affective Responses and Cognitive Processes

Author

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  • Hansen, Mark H.
  • Morrow, J.L., Jr.

Abstract

Many of the various forms of cooperative strategy that firms are pursuing in today's economy entail the placing of important business functions in the hands of a partner. This paper examines the role of trust in the decision by a producer to place the marketing function in the hands of another entity, namely a cooperative. Although others have studied the effect of what may be termed general trust on inter-organizational relationships, few have examined the antecedents of that trust. We propose a model in which affective responses and cognitive processes are precursors to a sense of general trust, which, in turn, influences the outsourcing decision. These affective responses and cognitive processes have both direct and indirect (mediated) effects on the decision to place an important function in the hands of another entity. Perceptions of partner expertise in the business function at hand and the perceived need for the focal firm to maintain control over that function are also considered in the model. The model is tested in a somewhat novel context: the decision of cotton producers to outsource the marketing of their cotton fiber. Using survey data gathered from the actual decision-maker, and structural equations modeling, we find that the inclusion of affective responses and cognitive processes in our model produces a richer explanation of the outsourcing decision. The differences between the effects of affective responses and cognitive processes have potentially important implications for managers engaged in cooperative strategies and for the scholars who study them.

Suggested Citation

  • Hansen, Mark H. & Morrow, J.L., Jr., 2003. "Trust and the Decision to Outsource: Affective Responses and Cognitive Processes," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 6(3), pages 1-30.
  • Handle: RePEc:ags:ifaamr:34393
    DOI: 10.22004/ag.econ.34393
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    Citations

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    Cited by:

    1. Valérie Barraud-Didier & Marie-Christine Henninger & Guilhem Anzalone, 2012. "The Weakening of the Member-cooperative Relationship in France [La distanciation du lien adhérent/coopérative en France]," Post-Print hal-01395461, HAL.
    2. Marie-Christine Henninger & Valérie Barraud-Didier, 2013. "Complexity of the link between members and cooperatives : a market relation based on social interactions [La complexité du lien adhérent-coopérative. La complexité du lien adhérent-coopérative : un," Post-Print halshs-01377049, HAL.
    3. Kuo-Chien Chang, 2017. "Feeling leads to believing: a Kansei-based approach to explore website users’ purchase intention in the travel agency sector," Information Systems and e-Business Management, Springer, vol. 15(1), pages 21-50, February.
    4. Zander, Katrin & Beske, Philip, 2014. "Happy Growers! Relationship Quality in the German Organic Apple Chain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(3), pages 1-20, September.
    5. Valérie Barraud-Didier & Marie-Christine Henninger & Asâad El Akremi, 2012. "The Relationship Between Members' Trust and Participation in Governance of Cooperatives : The Role of Organizational Commitment," Post-Print halshs-00695926, HAL.
    6. Barraud-Didier, Valérie & Henninger, Marie-Christine & El Akremi, Assâad, 2012. "The Relationship Between Members’ Trust and Participation in the Governance of Cooperatives: The Role of Organizational Commitment," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(1), pages 1-24, February.
    7. Valérie Barraud-Didier & Marie-Christine Henninger & Pierre Triboulet, 2014. "La Participation des Adhérents Dans Leurs Coopératives Agricoles: Une Étude Exploratoire du Secteur Céréalier Français," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(1), pages 125-148, March.
    8. En Xie & Yuan Li & Zhongfeng Su & Hock-Hai Teo, 2010. "The Determinants of Local Suppliers’ Trust Towards Foreign Buyers," Management International Review, Springer, vol. 50(5), pages 585-611, October.
    9. Bitsch, Linda & Hanf, Jon H., 2022. "The perfect match: interpersonal relationships and their impact on chain management," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(3), March.

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    Keywords

    Agribusiness;

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