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INFLUENCE OF CULTURE ON THE CONTENT AND
ROLE OF SOCIAL CONTRACTS: A BUYER’S
PERSPECTIVE
Master’s Thesis MSc. SCM
University of Groningen, Faculty of Economics and Business
Author:
S.C. Bloo
Student number: 3541290
Email:
s.c.bloo@student.rug.nl
Word count:
13.319
Date:
28-08-2019
Supervisor:
dr. K. Scholten
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Abstract
Purpose: This research addresses the influence of national culture on the content and role of
the social contract in a buyer-supplier relationship, by exploring the link between the cultural environment of the buyer and supplier with the function and shape of values and norms in their relationship.
Method/Design: This study uses an exploratory multiple case study to gather data, which will
be conducted in various international operating firms in the manufacturing and chemical industries. This will include semi-structured interviews about buyer-supplier cases with purchasing managers and supplemental secondary data.
Findings: The findings show that the shaping of the content of the social contract depends on
the cultural environment of both the buyer and the supplier. (Bigger) differences between the two environments call for more extensive contents. As is the case with the role of the social contract, differences in the cultural environment lead to intensified coordinating, adaptation, and safeguarding roles.
Originality/value: This is one of the first studies that explores the influence of national culture
on the social contract in the pre-contractual phase of a buyer-supplier relationship. Providing evidence that national culture characteristics influence the shape of a social contract and the role it plays. Therefore, it gives buyers insights in how to tailor their supplier approach to successfully build a relationship in the pre-contractual phase.
Keywords: Purchasing, Social contract, National culture, Social contract content and role,
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Table of Content
1 INTRODUCTION ... 4
2 THEORETICAL BACKGROUND ... 6
2.1 National Culture and Social Contracts ... 6
2.1.1 Self-Interest ... 7
2.1.2 Tolerance of Ambiguity ... 8
2.1.3 Inequality ... 8
2.1.4 Future-orientation ... 8
2.2 Social Contracts in Buyer-Supplier Relationships ... 10
2.2.1 Content of the Social Contract ... 10
2.2.2 Role of Social Contracts ... 11
2.3 Conceptual Model ... 13 3 METHODOLOGY ... 15 3.1 Research Design ... 15 3.2 Research Context ... 15 3.3 Case Selection ... 16 3.4 Data Collection ... 18 3.5 Data Analysis ... 20 4 FINDINGS ... 27
4.1 Content of the Social Contract ... 29
4.2 Role of the Social Contract ... 36
5 DISCUSSION ... 39
6 CONCLUSION ... 44
REFERENCES ... 46
Appendix A: Interview Guide ... 50
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1 INTRODUCTION
In 2011, US-based Groupon entered the Chinese market. To realize rapid growth and adaptation, it used their Western aggressive source tactics upon single small Chinese vendors by buying out their best employees, underestimating the cultural differences in seeing norms and values of appropriate behavior. The Chinese vendors replied by joining forces and counter Groupon by forbidding people to return to work for any of the allied companies ever again, which made employees hesitant and led to a big loss of (potential) market share for Groupon (Lee, 2018). This tendency of buying firms to push their own norms, values, and behavior upon culturally different suppliers can be widely seen (Johnson et al., 2006). The norms, values, and expectations of behavior in a buyer-supplier relationship (BSR) go beyond the formal contract and are the main content of social contract between a buyer and supplier (Broekhuis & Scholten, 2018; Heide, Wathne, & Rokkan, 2007). Social contracts are about maintaining an informal and unwritten agreement between two firms, clarifying indirect moral obligations of their relationship (Eckerd and Hill, 2012). In particular, the role of a social contract is to coordinate interactions, adapt to changes and conflict, and to safeguard commitment and trust (Achrol et
al., 1999; Hoetker and Mellewigt, 2009). The pre-contractual phase is the most prevalent phase in the BSR, as goals and behavioral standards are determined from the initial contact (Dwyer, Schurr, & Oh, 1987), which is fundamental for a successful BSR (Heide et al., 2007; Li & Choi, 2009). Social contracts are influenced by a society’s culture (Ribbink and Grimm, 2014), and can, therefore, be perceived differently within a BSR (Rousseau, 1995; Eckerd and Hill, 2012), affecting the business performance (Ribbink and Grimm, 2014).
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ultimately the strength of the relationship (Yeung et al., 2009). Thus these dimensions of national culture should be taken into account when engaging in a BSR.
Although research acknowledged the influence of national culture on social contracts in general (Leung et al., 2005), it is not researched how cultural aspects influence the content and role of social contracts in a BSR, and in particular neglected the pre-contractual phase (Karjalainen & Salmi, 2013; Li & Choi, 2009). Which is odd considering social contracts are initiated from the first contact between buyer and supplier (Jap and Ganesan, 2000) and affect the firm’s performance (Broekhuis & Scholten, 2018). Furthermore, in a BSR parties are prone to stick to their own beliefs (Dunfee et al., 1999), meaning that different cultural environments can lead to different understandings of the content of the social contract (Rousseau, 1995; Eckerd and Hill, 2012), and alter the role of the social contract to enable a successful BSR (Achrol et al., 1999). Hence, the implications of the influence of different national cultures on the content and role has to be researched, to prevent misunderstandings from happening and increase the performance of BSRs. Therefore, the following research question has been formulated:
How does national culture influence the content and role of social contracts in the pre-contractual phase of a buyer-supplier relationship?
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2 THEORETICAL BACKGROUND
2.1 National Culture and Social Contracts
National culture can be defined as ‘the set of attitudes, values, beliefs, and behaviors shared by a group of people, but different for each individual, communicated from one generation to the next (Matsumoto and Juang, 2007, p. 27). In BSRs, a different national culture might induce conflicting views on what is ‘normal’ due to both parties’ own cultural environment (Cannon
et al., 2010). Such different interpretations caused by culture in business practices lead to
managerial challenges (Beugelsdijk et al., 2017) and therefore influence the overall supply chain performance on for instance costs reduction, profits, or competitive advantage (Ribbink and Grimm, 2014). To understand culture it is needed to take both visible aspects, like behavioral aspects (Hatch, 1993), and invisible aspects, such as assumptions (Hatch, 1993), into account (Obeidat et al., 2012). Therefore multiple dimensions of culture have to be considered. Over time many researchers have conceptualized dimensions into a model to asses culture (Hofstede, 1991; House, Javidan, Hanges, & Dorfman, 2004; Trompenaars, 1993; Hall & Hall, 1990). These will be discussed in detail below.
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be validated since an empirical correlation is missing. Hofstede (2006) also criticized their study for being too US-centric and lacking parsimony.
Further, lesser, known models are developed by Trompenaars’ (1993) and Hall and Hall (1990). These models are not found suitable for this research, as Trompenaars’ model (1993) got heavily criticized by Hofstede (1996) since Trompenaar (1993) used existing research and replaced its findings with his empirical findings, hindering new theory development. Besides, the foundation of the model was found to be weak due to the small sample, limited database, and lack of multidimensional analysis (Hofstede, 2006). Hall and Hall’s (1990) model was found not suitable for assessing national culture due to the grouping of low and high context cultures, which is evident from the lack of use of the model in existing research (Cardon, 2008). It can be concluded that although the models of Hofstede (1991) and House et al. (2004) have criticism on their own, they solidify each other’s findings by replication of similar dimensions. Also by reviewing literature (Carter, 2000; Hewett, Money and Sharma, 2006; Wallenburg et
al., 2011; Thornton, Autry and Gligor, 2013; Ribbink and Grimm, 2014; Handley and Angst,
2015), it becomes evident that both models are widely used to asses national culture in the supply chain context. To ensure validity only the dimensions with a strong foundation that are tested, refined, and replicated by both Hofstede (1991) and House et al. (2004) will be used in this study. Therefore, the dimensions individualism vs. collectivism, uncertainty avoidance, power distance, and long-term orientation (Hofstede, 1991; House et al., 2004) will be used as framework for national culture. As can be seen in table 1, these dimensions are noted as the quantitative dimensions and are used to derive qualitative dimensions and classifications to fit the nature of this study. As depicted in table 1, these qualitative dimensions are derived as the sub-variables self-interest, tolerance of ambiguity, inequality, and future-orientation, along with their classifications. Both the sub-variables and the classifications will be discussed extensively in the paragraphs below.
2.1.1 Self-Interest
Self-interest considers how individuals are integrated into a group and act in their own beneficial way over the group’s interests (Hofstede, 1991; House et al., 2004). Put in the context of BSRs, self-interest relates to the motivation and pursuance of achieving mutual goals and interests by buyer and supplier (Cannon et al., 2010). Self-interest influences the long-term orientation of the BSR by determining whether trust and performance are valued. (Cannon et
al., 2010). In case the buyer or supplier seeks for its own interest, the BSR will be oriented on
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(Cannon et al., 2010). Besides influencing the orientation of the relationship, self-interest also impacts the governance structure and subsequently the likelihood of opportunism (Handley and Angst, 2015). To illustrate, BSRs characterized by little self-interest are governed more effectively by relational mechanisms rather than contractual mechanisms and are less prone to opportunism (Handley and Angst, 2015). Due to the collective nature of these BSRs, loyalty, pride, and cohesiveness affect the engagement in opportunistic behavior by either the buyer or seller (House et al., 2004).
2.1.2 Tolerance of Ambiguity
Tolerance of ambiguity relates to how comfortable individuals or organizations are in unstructured situations, how tolerant they are of uncertainty, and how open they are to change (Hofstede, 1991; House et al., 2004). In BSRs, tolerance of ambiguity refers to the tendency that both buyer and supplier have of averting risk in their relationship and their respective organizations, impacting the selection of governance mechanisms and rules and regulations (Handley and Angst, 2015). Furthermore, in BSRs with tolerance of ambiguity, more openness to uncertainty leads to weaker BSRs and consequently weaker performances (Hewett, Money and Sharma, 2006). This mostly has to do with loyalty and the willingness to tolerate problems from buyers and suppliers (Hewett, Money and Sharma, 2006). Due to high uncertainty levels resulting from tolerance of ambiguity, it is harder to build a steady relationship, which impacts the intention of repurchases and the overall performance of the BSR (House et al., 2004; Hewett, Money and Sharma, 2006).
2.1.3 Inequality
Inequality relates to how the distribution of power sources is organized and used by the members of a society (Hofstede, 1991; House et al., 2004). In the context of BSRs, power distribution and the acceptance of power usage by both parties influence the internal integration and the level of commitment in the relationship (Yeung et al., 2009). Furthermore, decision-making in the BSR is influenced by power usage (Heide and John, 1992), parties can push their own agenda if they possess power advantages. This ties in with the influence inequality has on the approach that is chosen for the BSR. Inequality has an influence on the formality of the relationship and impacts the orientation and, therefore, the performance of the relationship (Hewett, Money and Sharma, 2006).
2.1.4 Future-orientation
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relationships between buyers and suppliers, future-orientation refers to the sacrifices firms are willing to make in the short term, to benefit from mutual gains over the longer term (Ganesan, 1993). For example, by investing in supplier development and joint innovation programs, resources have to be put to use on the short-term to allow long-term gains (Peterson et al., 2002). BSRs that are characterized as future-oriented prioritize behaviors that ensure relationship continuity, lock down commitment from both parties, and aim for long-term goals with regards to the performance of the relationship (Cannon et al., 2010).
TABLE 1
OPERATIONALIZATION OF CULTURE
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investigate culture and its influence (Ribbink and Grimm, 2014). Therefore, the social contract literature will be reviewed to see how social contracts are shaped and consequently what role they play.
2.2 Social Contracts in Buyer-Supplier Relationships
To create a mutual agreement in a relationship between a buyer and a supplier, a social contract is needed to align the interests and activities of both parties (Dunfee, Smith and Ross, 1999). Social contracts can be defined as the informal and generally unwritten agreement between two firms, encompassing norms and values that are developed through interaction in the BSR (Eckerd and Hill, 2012). Social contracts are constructed from the initial consideration of suppliers, thus start far before the formal contract is signed, and develop during the pre-contractual phase (Karjalainen & Salmi, 2013; Li & Choi, 2009). Values and norms are, in general, considered as the core aspects of the content in the social contract, as they are conceptualized by many researchers in their definition (Dunfee et al., 1999; Eckerd & Hill, 2012; Heide et al., 2007; Morrison & Robinson, 1997) and can be explained as the beliefs and standards of appropriate behavior, that people derive from their own cultural environment (Dunfee et al., 1999; Eckerd & Hill, 2012; Heide et al., 2007). Therefore, different cultural environments have different understandings since it leads to different values and, therefore, call for more norms to create a common understanding (Leung et al., 2005; Ribbink and Grimm, 2014). Besides, different cultural environments may lead to opportunism that has to be safeguarded by social contracts and requires more intensive coordination of the interactions between the buyer and supplier to bridge the differences in values and norms (Achrol et al., 1999; Hoetker and Mellewigt, 2009). Hence, the role of the social contract is influenced by culture (Leung et al., 2005; Ribbink and Grimm, 2014). The content and role are further elaborated below. The operationalization of these variables is presented in table 2.
2.2.1 Content of the Social Contract
In general, the content of the social contract can be explained as the values and norms, that people derive from their own cultural environment (Dunfee et al., 1999; Eckerd & Hill, 2012; Heide et al., 2007). Values are further divided into beliefs and attitudes (Chen, Xie, & Chang, 2011; Dunfee et al., 1999). And norms into ethical, relational, and social norms (Heide & John, 1992; Windsor 2018; Eckerd and Hill, 2012; Huo et al., 2016).
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their business practices. Since, generally, organizations or individuals stick to their own beliefs, different understandings due to cultural influences can lead to different beliefs and attitudes in the BSR (Roussea, 1995; Dunfee et al., 1999). Especially in the pre-contractual phase of the BSR since parties are exposed a lot more to uncertainty in this phase and rather stick to their own beliefs (Dwyer, Schurr and Oh, 1987; Li and Choi, 2009), or select suppliers with similar attitudes and beliefs (Dunfee et al., 1999).
Norms can be defined as informal agreements on behavioral standards shared in a BSR (Heide & John, 1992; Windsor 2018; Eckerd and Hill, 2012; Huo et al., 2016). In literature, three types of norms are identified (Heide and John, 1992; Eckerd and Hill, 2012; Windsor, 2018). First, social norms are for example reciprocity and honesty and govern the behavior of the buyer and supplier (Dunfee, Smith and Ross, 1999; Gao, Knight and Ballantyne, 2012). Second, relational norms ensure that both parties are cooperative, have the willingness to adapt to each other’s surroundings and harmonize conflicts (Achrol et al.; 1999; Heide & John, 1992; Huo et al., 2016). Third, ethical norms prevent violations of the social contract and curb opportunism (Eckerd & Hill, 2012). These three types of norms are influenced by culture since these can be understood differently by the buyer and supplier and lead to different expectations of behavior (Dunfee and Warren, 2001; Warren, Dunfee and Li, 2004). A shared understanding of the norms is often established in the pre-contractual phase of the BSR because it is a prerequisite of a successful relationship (Dwyer, Schurr and Oh, 1987).
2.2.2 Role of Social Contracts
Just like general contracts (Broekhuis and Scholten, 2018), relational governance systems such as social contracts, have three roles: coordinating, adapting and safeguarding (Jones, Hesterly and Borgatti, 1997; Achrol et al., 1999; Hoetker and Mellewigt, 2009). The overall goal of these roles is to align the activities of both parties and create a mutual agreement (Jones, Hesterly and Borgatti, 1997; Achrol et al., 1999).
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whether cooperation is established or not. This common understanding is subsequently sustained by the safeguarding role of the social contract (Jones, Hesterly and Borgatti, 1997; Achrol et al., 1999).
A second role of the social contract is the adaptation role. This role is about adapting to different environments by both parties in the BSR, often in the early stages of the relationship, and is intertwined with the coordination role of the social contract (Schepker et al., 2014). As a result of the coordination of the two cultural environments in the BSR, firms might end up in uncertain environments where change or conflict is present, which requires adaptation (Poppo and Zenger, 2002; Schepker et al., 2014). Adaptation from these uncertain environments is done by mutual agreements on outcomes, which affects commitment and the interfirm relationship, and therefore influences the safeguarding role of the social contract (Schepker et al., 2014).
As mentioned the safeguarding role, a third role, is about sustaining the common understanding in the BSR and to ultimately develop cooperation by both parties (Hoetker and Mellewigt, 2009; Schepker et al., 2014). The safeguarding role governs the common understanding by creating trust and commitment as social safeguards (Achrol et al., 1999). By mitigating opportunistic behavior from the buyer and supplier and, the safeguarding role prevents conflict in the BSR (Jones, Hesterly and Borgatti, 1997; Achrol et al., 1999; Hoetker and Mellewigt, 2009). Because the adaptation role enables the social contract to adapt from uncertainty and conflict (Schepker et al., 2014), it is also heavily intertwined with the safeguarding role since it enables mitigation (Achrol et al., 1999).
13 TABLE 2
CONCEPTUALIZATION OF SOCIAL CONTRACT
It is evident that social contracts determine how buyers and suppliers act in the relationship, and that the content and role of the social contract are influenced by the cultural dimensions of self-interest, tolerance of ambiguity, inequality, and future-orientation. Therefore, these should be taken into account when approaching a supplier, starting from the initiation phase of the relationship, since they already influence the initial considerations and determine the shaping of the content of the social contract.
2.3 Conceptual Model
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Cultural influences can also lead to different understandings of the relational, social, and
ethical norms of the social contract (Dunfee and Warren, 2001; Warren, Dunfee and Li, 2004).
To illustrate, business in Guanxi culture thrives on obligations to exchange favors to increase credibility and mutual trust before signing a formal contract. Meanwhile, Western firms see this behavior as a form of bribery (Dunfee and Warren, 2001; Gao, Knight and Ballantyne, 2012). Therefore, different expectations of behavior can lead to more obligations and informal agreements, thus influencing the content of the social contract (Eckerd and Hill, 2012; Huo et
al., 2016).
The coordinating, adapting and safeguarding roles of the social contract can also be impacted by culture. Differing cultural backgrounds may lead to more coordination of interactions and increased chance of adaptation to different environments to establish a common understanding of the social contract (Achrol et al., 1999; Hoetker and Mellewigt, 2009). Also, due to cultural influences, more uncertainty has to be safeguarded to retain the common understanding through social mechanisms like commitment and trust (Achrol et al., 1999; Hoetker and Mellewigt, 2009).
Because it is known that cultural influence may lead to different understandings of the social contract (Rousseau, 1995; Eckerd and Hill, 2012), and that misunderstandings affect the business performance (Ribbink and Grimm, 2014). It is expected that national culture influences how the content of the social contract is shaped, and furthermore influences the role it plays to enable a successful BSR. To research this, the influence of Self-interest, tolerance of
ambiguity, inequality, and future-orientation on the content and the role of the social contract
will be studied. Hence, the following research question is formulated:
How does national culture influence the content and role of social contracts in the pre-contractual phase of a buyer-supplier relationship?
FIGURE 1
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3 METHODOLOGY
3.1 Research Design
The purpose of this study is to research the influence of national culture on social contracts since misunderstandings between the buyer and supplier affect the performance of the buyer and the supply chain as a whole (Ribbink and Grimm, 2014). While current research already made a link between national culture and social contracts (Leung et al., 2005), it did not research the direct influence of culture on the content and role of the social contracts. To research this link an exploratory research design is used. Since research in social contracts is limited, notably in the pre-contractual phase (Li and Choi, 2009) and in cross-cultural BSRs (Leung et al., 2005), the researcher has to get new insights in the new research area (Yin, 2009). To gather new insights, a case study design fits best as it generates in-depth knowledge of the link between the content and role of social contracts and the influence of national culture, which are both considered as explorative phenomena (Yin, 2009). Furthermore, since the boundaries between the mentioned phenomena and the real-life context are not fully defined, this study opts for a multiple case study design since it uses multiple sources of evidence (Yin, 2009). Because a multiple case study gives insights in multiple different cultural backgrounds, it highlights influences of culture on the social contract and it is therefore chosen over a single case study (Yin, 2009). Even more so because multiple cases provide different insights that can be compared. The generation of these insights allows the researcher to provide an answer to the research question. Because a cultural difference becomes evident from two parties’ cultural environments, a relationship between two parties is needed to investigate this difference. Therefore, to investigate this phenomenon the unit of analysis is determined as the ‘buyer-supplier relationship’.
3.2 Research Context
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The aerospace industry was characterized as a very closed market, centered around specific geographical regions, however, the last few decades players from emerging regions in the world entered the market (Bédier, Vancauwenberghe and Van Sintern, 2008). Thus, increasing the geographical and cultural distances in the supply chain that have to be managed by buyers (Rebolledo and Nollet, 2011). Also, due to the complex and high-quality materials involved in this industry (Rossetti and Choi, 2005), part of the sourcing has to be done in limited specialized markets which call for good relationship management.
The chemical industry has a high share in global sourcing since natural chemicals like sand and minerals are obtained from specific locations on the globe, thus from different countries and cultures. Since scarcity of raw materials in the chemical industry is also present, companies in this industry benefit from strong relationships with their cross-cultural suppliers. As in all these industries the strength of the relationship affect the business performance (Ribbink and Grimm, 2014), it influences the relational approach they maintain, hence the content and role of the social contract. This makes them particularly suitable for this research context and provides insights to answer the research question.
3.3 Case Selection
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share the understanding of them. For instance, gifting in Chinese culture is an important social norm, however, Dutch culture sees it as a form of bribery (Dunfee and Warren, 2001). As a result from these selection criteria, 18 cases are presented in table 3, representing BSRs between Dutch buyers and suppliers from eight different countries: Germany, Luxembourg, Denmark, France, Italy, United Kingdom, United States, and China, clustered into Germanic, Latin, Anglo-Saxon, and East-Asian spheres based on GLOBE’s categorization (GLOBE, 2019).
18 3.4 Data Collection
The data for this research has been gathered by means of 12 semi-structured interviews with purchasers from six Dutch buying companies in April and May 2019. The interviewees were identified and approached via personal contact at a purchasing consortium, via LinkedIn, and via email. These purchasing managers all had more than two years of experience in dealing with cross-cultural suppliers, which allowed them to give meaningful insights (Voss, Tsikriktsis and Frohlich, 2002).
Before interviewing, the interview protocol (Appendix A) containing an introduction to the research, interview questions and case selection was sent. This enabled the interviewees to prepare and orientate on the cases for best quality data. Semi-structured interviews allowed the researchers to go more in-depth by probing questions that were derived from the interview guide. The interview guide was developed by all three researchers to ensure reliability and the topics and questions were derived from the literature. Interviews were established either in-person or via video-conferences. Conducting the interview happened in a structured way by following the predetermined interview guide. Per interview two BSRs were discussed, each with a supplier from a different culture. These cases were appointed based on their characteristics, one close to and the other distant to the Dutch culture, enabling contrasting results. In table 4 an overview is given of the conducted interviews. In this table it can be seen that cases with similar cultural backgrounds are grouped together into cultural clusters, these cultural clusters are based on the classifications of the GLOBE model (House et al., 2004). Furthermore, it is shown in which language each interview was conducted and that a few interviewees were only able to discuss one BSR due to time reasons. In such cases, the BSR the interviewee had the most affinity and experience with was chosen, so the best insights would be gathered.
During the interviews, one researcher probed the questions and the second made notes and checked if no question went unmarked. To paint a picture of the interviewee, the interviews started with general background questions like, “How would you describe your role and
responsibilities within this department?”. Next, the interviews moved more in-depth and
discussed two cases with questions like, “How do you agree on the way of doing business with
the supplier?”. Insights of the influence of national culture on the development of social
contracts were gathered via questions like “How did the difference in culture influence doing
business”. Insights on the content and role of the social contract were gathered via questions
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questions like, “How satisfied are you with the relationship with the supplier”, indicated the outcomes of the social contract. After asking these questions the interviewer was able to formulate an answer to the research question. The interview closed with the general question:
“Do you have any additional comments, remarks or suggestions?”. Which gave the
interviewees the opportunity to add some of their interpretations.
After conducting the interview, it was made sure that the form of consent (Appendix B), that was added to the interview guide, was signed and returned by the interviewee. This made sure that consent was given to use the data and to record the interviews, which increased the reliability. The interviews were either conducted in English or in Dutch if the interviewee preferred that, which prevented misinterpretations. During all 12 interviews, two interviewers were present, who discussed the interviews afterward, increasing the reliability of the data. Afterward, the interviews were translated if necessary and transcribed, enabling the coding and analysis of the data.
TABLE 4
20 3.5 Data Analysis
After collection, the data was analyzed. This was done gradually, it started with the reduction of the data by assigning first-order codes to quotes that were derived from the interview transcripts. These first-order codes are based on the sub-variables of both the content and role of the social contract, in this process of assigning codes, national culture and the pre-contractual phase were kept in mind. After reducing the initial data from the transcript to first-order codes, second-order categories were deductively developed to categorize the first-order codes. These second-order categories are based on the norms and values that make up the content and role of the social contract. After categorizing, the second-order categories that were similar and had the same effect on the content and role of the social contract were assigned and grouped under the same third-order themes. A more detailed description of the coding process will be shown in the following paragraphs for self-interest, tolerance of ambiguity, inequality, and future-orientation respectively. As well are the excerpts of the code trees depicted in figures 7A, 7B, 7C, and 7D in the same order.
After reducing the data, the codes were evaluated and categorized as either content or role and based on the four cultural variables. Self-interest reflects the relational posture of the BSR. A quote like “This is described in the CoC, but in my opinion these are also standard
norms/values of how one should do business” (C2), is categorized under content as attitudes
because it shows a way of thinking towards the BSR. While a quote like “Both sides tried to
establish the relationship, but also both sides were willing to put a lot of time and effort” (C1)
is categorized as role under safeguarding because it shows the willingness to collaborate from both parties. Second-order categories were based on the mutuality, integration, and orientation of the relationship.
Tolerance of ambiguity reflects the need for structure and emphasis on risk aversion. A quote like “It gave us the idea that they were trustworthy, that they organized in a good way. And
that we don’t have to worry about child labor or environmental problems occurring in that plant” (C12) is categorized under content as beliefs because it shows a mutual ideal. While a
quote like, “After that we are always invited for dinner, because business without dinner is not
possible in China” (C14) is categorized under role as adaptation because it shows the buyer
adapting to a different environment to build trust. Second-order categories were based on reliability and the need for structure by the buyer.
Inequality reflects on the power structure and power usage in the BSR. A quote like “The
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is how we want you to do the business. It was very quickly established how to work together, is was very easy and not very formal” (C1) is categorized under content as attitude because it
shows an coercive way of thinking by the supplier. While a quote like “That happens with
particularly important relationship goals for the long term. They are important suppliers for us and we are an important customer, so that means that there is a high level of trust regarding quality” (C11) is categorized under content as beliefs because it shows the ideals for the power
structure by both parties. Second-order categories were based on the power distribution and the decision-making in the BSR due to the power usage.
Future-orientation reflects on the sacrifices firms are willing to make on the short-term for long-term gains. A quote like “Generally at our company we are looking for long-long-term relationships
with suppliers. Again it takes so much time, effort and resources to get suppliers at that level and keep them working like that” (C14) is categorized under content as attitude because it
shows long-term way of thinking. While a quote like “Once again, you’re not doing that for 1
or 2 years. At least for 5 years. Otherwise the investments are too high” (C18) is categorized
22 TABLE 6
23 TABLE 7A
24 TABLE 7B
25 TABLE 7B
EXCERPT CODE TREE OF TOLERANCE OF AMBIGUITY (Continued)
Note: The number after the quotes denotes the case it was derived from.
TABLE 7C
EXCERPT CODE TREE OF INEQUALITY
26 TABLE 7D
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4 FINDINGS
This findings section shows the relations between the cultural dimensions: self-interest, tolerance
of ambiguity, inequality, and future-orientation, and the content and role of the social contract. On
the next page table 8 is depicted, this table gives a full overview of the findings. In this table, the mechanisms and their underlying concepts are presented that show the cultural influences on the content and role of the social contract. The findings of the content and role will be discussed in detail in respectively section 4.1 and 4.2
The content of social contracts in the pre-contractual phase is influenced by culture in many ways. The nature of self-interest leads to the pursuance of either individual or mutual ideals, thus influencing the attitudes that are maintained in the BSR. This carries over to the beliefs of both the buyer and supplier, as trust issues and personal beliefs of purchasers lead to them to seek for their own gains, while parties seek for mutual gains through common understanding. Transparency is established through cooperation by sharing information. Self-interest also influences the adaptation and safeguarding roles of the social contract by building trust and commitment. Many BSRs are established in environments that are intolerant of ambiguity, beliefs like reliable behavior and supplier standards are often found to be important to counter uncertainty. Furthermore, to curb opportunistic behavior in the BSR, social and ethical norms in the form of behavioral standards are in place. The role of the social contract is to coordinate the interactions of the buyer and supplier in the pre-contractual phase, in which the culturally different norms and values are harmonized to a common understanding. This common understanding is sustained by the adaptation and safeguarding roles and is used to avert risks and uncertainty.
Inequality in BSRs leads to an unequal distribution of power. Buyers that have power advantages often put those to use in the pre-contractual phase to pursue their own agenda by forcing cooperative attitudes. Some buyers also agree with the current power structure to use their cultural awareness as a tool to benefit from the power structure. Equality in BSRs is also present, power balances lead to parties sharing interests and aiming for mutual satisfaction.
28 TABLE 8
OVERVIEW OF FINDINGS
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4.1 Content of the Social Contract
It is found that all cultural variables have a certain influence on one or more of the sub-variables
attitudes, beliefs, ethical norms, relational norms, and social norms. For instance, self-interest
influences attitudes via a mutual dependency. These findings are presented in the following sections, respectively for self-interest, tolerance of ambiguity, inequality, and
future-orientation. Each of these sections closes with a table including a detailed overview of the
findings.
4.1.1 The influence of Self-Interest
The findings show that throughout all cases the nature of self-interest plays a huge part in the shaping of the attitudes of the parties in the BSR due to undertaking of both individual and collective actions. In some cases (C1, C3, C6, C9) parties had a common understanding about their interests, which created a mutual dependency and led to undertaking of collective actions,
“We are looking for the best way of working and create a win-win contract. There should also be advantage for us, I think they will be acting as a partner, because we need each other” (C9).
On the contrary, in other cases (C2, C10, C11, C17, C18) the buyer was seeking its own interests. This independency of the buyer influenced the attitudes in the BSR, “This is described
in the CoC, but in my opinion these are also standard norms/values of how one should do business” (C2). By maintaining such an individual attitude, the buyer forced certain attitudes
upon the supplier, without considering cultural differences.
Besides attitudes, the nature of self-interest also impacts the beliefs in the BSR. In some cases (C6, C7, C9, C12, C13, C14, C15, C16, C18) purchasers had their personal beliefs about the future structure of the relationship that they wanted to push upon the supplier, without considering the shared understanding of such beliefs. Therefore, they tried to pursue their own ideals over that of the collective, “I think that is the basis, it needs to be an open, formal and
informal setting” (C6). These predispositions of purchasers are heavily biased due to supplier’s
culture, as in some cases (C12, C13, C14, C15, C18) is indicated by trust issues, “I can’t say
that all Chinese companies are like this but my experience is that there are a lot of copycats. You can have any certificate you want, they will sign any document you want them to sign, but it is very hard to trust them straight away” (C15). So it seems that cohesiveness is missing
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In some cases (C1, C2, C3, C4, C9, C17) the buyer and supplier had mutual interests in their relationship, as they valued the performance of the BSR over their own ideals. This common understanding of beliefs lead to the pursuance of collective ideals, “This was also a company
which had a culture to please be direct, because then you know what you want, and they can give feedback on that, so that is really easy way of working, because that is also my natural way of working” (C3). Besides sharing an understanding of the beliefs, in some cases (C2, C6)
loyalty and cohesiveness between the buyer and supplier generated commitment to achieve collective goals and ideals, “I think you have a better understanding, [if] you know how both
parties are doing business-wise, and also you can help each other out more and share goals”
(C2). Such cohesiveness is the basis for mutual trust to develop in the pre-contractual phase of the relationship.
Important to take into account is that a common understanding of the social contract not always leads to parties having identical beliefs and full cooperation, but can also be that both parties respect each other’s understanding of certain beliefs about the relationship, “Being open and
honest to each other and if I have some problems, I want to talk about it … [an] open relationship and honest relationship with each other that's what I agreed with him” (C17). This
willingness to adapt to different environments influences relational norms. Moreover, in all cases except 13 information was shared in the pre-contractual phase to allow the BSR to be transparent, “I think the most important step was to understand the business, technically they
could do it, but how to do it, to do it in a proper way, without any extends, there we had to share a lot of information” (C1). Transparency requires cooperation, thus, influences the relational
norms. Due to cooperation, mutual goals could be achieved, which in turn increased the relationship’s performance. In table 9 an overview of the findings on self-interest is presented.
TABLE 9
31 4.1.2 The influence of Tolerance of Ambiguity
It was found that tolerance of ambiguity has a very large influence on the content of the social contract, due to the reliability that is valued by buyers to minimize uncertainty in the BSR. Reliable behavior is experienced by the buyer in cases 2, 3, and 12, meaning that the likelihood of opportunistic behavior is low and risks are mitigated, “Furthermore, Germans always stick
to the agreements and keep their word, which we like since it is also present in our culture”
(C2). These cases are characterized by their intolerance of ambiguity and want to avoid uncertainty by structuring the BSR. On the contrary, in cases 14, 15, 18, characterized by a tolerance of uncertainty, the decreased need for structure opens up the relationship to risk-taking and opportunistic behavior. Such unreliable behavior impacts the reliability of the relationship,
“Normally what we see in China is that the first sample is something that you can deliver to the queen, they are so nice. But gradually over time, the quality of the samples starts to go down”
(C14). Hence, it seems that in less structured environments the chances of uncertainty and opportunistic behavior increase.
Reliability in most cases (all except 1, 2, 5, 6, 9, 11) was valued by purchasers. Purchasers requested product and process standards to verify the competences of the suppliers before signing an agreement, “ISO certificates, global certification and also certification of their plant
in the US. We talked about their capacity, the way to transport it from US in a container to Europe and we talked about pricing and the specifications” (C8). By sharing information, the
buyer and supplier minimized uncertainty and the chances of opportunistic behavior, hence, increasing the reliability. It was also found that the emphasis on supplier standards is much more strict in cases that were tolerant of ambiguity (C12, C14, C15, C16, C17) compared to the other cases, “Two and three means that we sent physically people over to the supplier. For
instance a check on the waste water, child labor etc. Two and three are mandatory in Asia, in Europe only the first one would suffice because they have an ISO certificate” (C15). Due to the
tolerance of ambiguity, these cases are more exposed to uncertainty, hence, it seems that buyers consider them as less reliable.
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lower than shown in the bookkeeping. So they have a double bookkeeping” (C18). A possible
explanation for this is that suppliers in these cases often have a different perception of ethical behavior as experienced by the buyers (C12, C14), “For suppliers it could be child labor or
safety issues, then we often see that our eyes look differently than our Chinese colleagues”
(C14). Meaning that they act according to their standards that differ from the buyer’s standards, creating a misunderstanding of the ethical norms that are in place to prevent violations of the social contract.
Furthermore, tolerance of ambiguity influences the relational norms due to a common understanding of ideals and the willingness to tolerate supplier influence by buyers. In certain cases (C7, C10, C12, C14, C17, C18) buyers want to exclude uncertainty from the relationship by being flexible in shaping the content of the social contract and adjust to supplier’s norms in the pre-contractual phase, “Sometime it is, you know that some countries and some cultures,
they really want a relationship, and also your presents and visits are important” (C10). As
demonstrated in the quote, buyers try to understand the suppliers’ norms and adjust their own norms, e.g. taking part in reciprocity of gifts, to mitigate the uncertainty that originates from the differences in culture. Hence, this willingness to adapt influences the relational norms. Furthermore, due to the intolerance of uncertainty by buyers, many gather pre-knowledge of specific cultural aspects of suppliers to alienate risks and uncertainty. Such cultural awareness of uncertainty creates a common understanding of the cultural differences in the BSR and leads to the buyer cooperating with the supplier’s beliefs, thus, influencing the relational norms. Throughout almost all cases (all except 4, 8, 9, 11, 16) cultural awareness allowed the buyer to respond to known uncertainties, “Again, these are the expectations. With an European or
American supplier you agree on a quality and you keep that. But in China, generally speaking you need to have a lot more follow up” (C14). It appears that by understanding certain cultural
facets of suppliers, buyers try to prevent misunderstandings of the social contract and mitigate potential uncertainty.
Intolerance of ambiguity influences the social norms between the buyer and supplier, due to unclear communication that generates uncertainty and impact the relationship’s structure and also due to different understandings of appropriate behavior. Some purchasers (C13, C14, C15, C18) indicated that in their relationships with suppliers, language barriers lead to unclear communication, “There are other aspects you have to take into consideration. For example the
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case in China, there could be misunderstandings here” (C15). So it appears that
misunderstandings of the social contract can emerge when the content of the social contract cannot be properly communicated, which weakens the structure and opens the relationship up to risks. Furthermore, it was found that these language barriers are only present in BSRs with Chinese suppliers, characterized by their tolerance of ambiguity.
Besides the more obvious linguistic barriers, tolerance of ambiguity influences social norms due to different understandings of appropriate behavior by both parties. Different understandings impact the social norms because behavioral standards have to be implemented to govern the behavior to minimize uncertainty in the BSR. In this research it was found that in cases with similar expectations of behavior (C1, C2, C3, C6, C8) structure is present and uncertainty is minimal, “The expectation is that there will not be very big surprises in this
relationship, we are aligned in culture, proceeds, way of working and [overall] it is a very professional relationship” (C1). Contrarily, in cases, primarily, tolerant of ambiguity (C7, C13,
C14, C15, C18) the buyer and supplier had different expectations of behavior, which increased the likelihood of opportunistic behavior and uncertainty, “Like I explained, our culture is
different. We are more punctual in the way we work, in the way we do business and the way we communicate: more direct. And they have different perspectives on these topics” (C7). So, it
seems that the emphasis on social norms is bigger in cases that are more exposed to uncertainty and are more tolerant of ambiguity. In table 10 an overview of the findings on tolerance of ambiguity is presented.
TABLE 10
34 4.1.3 The influence of Inequality
The findings show that in a part of the cases (in)equality of the power distribution in the pre-contractual phase of the BSR has an impact on the content of the social contract due to the mutual agreement of power distribution, forcing cooperation, and acceptance of power usage. In some cases (C1, C8, C11) inequality influenced the attitudes in the relationship due to parties forcing a cooperative attitude upon the other by using the power imbalance to their advantage,
“They approached us and said: this is how we want you to do the business. It was very quickly established how to work together, is was very easy and not very formal” (C1). Hence, it seems
that power advantages are used in the pre-contractual phase to coerce the other party to contribute to their agenda and give in to their interests of how the BSR should be constructed. Furthermore, in other cases (C2, C10) equality of power distribution influenced the beliefs of the social contract due to the mutual agreement of the power distribution. Because a power balance was maintained, they agreed to the current power distribution and were not able nor interested to coerce the other into its own interests. Leading to a common understanding of the interests and mutual satisfaction, “After that we discussed the importance of the relationship
for both companies and the equality of the power structure” (C10). In some other cases (C2,
C11, C14) parties also agreed with the power distribution, leading to common understanding of goals, “So it was necessary to make different agreements with them since they became more
powerful and responsible for a larger quantity. After that we also made some agreements on long-term goals, improvement efforts, and already determined some KPIs that would later be put in the formal contract” (C2).
Moreover, in two cases (C4, C15) inequality influenced the social norms that are established in the pre-contractual phase due to the acceptance of the unequal power distribution by buyers. By using their awareness of the suppliers’ cultures, these buyers took advantage of the power distribution, “That is good, when you are not agreeing about the price, and the higher boss is
coming to the negotiations, you know you reached a boundary. When we do not agree then, there is nothing possible anymore. They are very formal and hierarchy is that strong in Germany” (C4). This way it seems that buyers can use this awareness to pursue their own
agenda over that of the collective by governing the behavior in the BSR. Aside from pursuing goals, buyers also agreed with the power distribution to safeguard their ideals and govern the behavior in the relationship on the long-term, “Why is it so important to respect this culture? If
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help you. This trust does not grow overnight” (C15). So, being aware of hierarchy and adjusting
the supplier approach as a result of unequal power distribution can govern the behavior and the long-term success of a BSR. In table 11 an overview of the findings on inequality is presented.
TABLE 11
INFLUENCE OF INEQUALITY ON CONTENT OF SOCIAL CONTRACT
4.1.4 The influence of Future-Orientation
It was found that future-orientation has an influence on the content of the social contract, due to the sacrifices firms are willing to make in the short term to benefit from mutual gains on the longer term. In some select cases (C1, C3, C6, C9) future-orientation lead to the formation of strategic partnerships, firms were willing to invest resources in the short-term, to benefit from mutual gains on the long-term, “Yes we do, because when we have a strategic supplier, we have
a supplier profile, every quarter we score the supplier on that, suppliers are scored on quality, logistics, techniques and costs” (C6). Hence, it seems that there is a mutual attitude to establish
long-term relationships. Besides being cooperative, in some cases (C5, C11) certain parties showed uncooperative attitudes due to a lack of future-orientation, “If you have a project like
this, your supplier needs to understand that this is a long-term business. Some suppliers are impatient and want to do business in 6 months” (C5). Meaning that there was no intention of
giving up short-term benefits for neither mutual or long-term gains.
Besides attitudes, future-orientation also influences the beliefs of the social contract, due to collaboration and future-oriented behaviors. Throughout most cases (all except C8, C13, C14, C15) both parties believed that mutual goals were important from the pre-contractual phase and onwards in the BSR, “Mutual goals like cost reduction, added value, which is maybe the most
important one for our business, and risk mitigation” (C9). Such mutual goals were believed to
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with Asian suppliers is for them, always a long-term focus, they are very interested in building the relationship, getting you on board and maintaining you as a customer” (C13). These cases
are all relationships with suppliers from cultures characterized by their future-orientation. In table 12 an overview of the findings on future-orientation is presented.
TABLE 12
INFLUENCE OF FUTURE-ORIENTATION ON CONTENT OF SOCIAL CONTRACT
4.2 Role of the Social Contract
It was found that the coordinating, adaptation and safeguarding roles of the social contract are all influenced by the variables of culture. A detailed presentation of the findings is given in the sections below, the findings are discussed for the cultural influences self-interest, tolerance of
ambiguity, inequality, and future-orientation respectively.
4.2.1 Influence of Self-Interest
The nature of self-interest in the BSR influences the adaptation role of the social contract, due to the creations of mutual trust. Mutual trust is important to establish in some cases (C14, C15, C18) before even starting the negotiations in order to do business, “We had dinner, but the trust
was not mutual yet. So we did the contract negotiations, and after that was finished, he came to me and talked to me in fluent English … Before that he spoke Chinese and used interpreters to communicate. After that he told me that he studied at Harvard” (C18). This implies that in
order to establish mutual trust and seek mutual interests, buyers should adapt to the supplier’s cultural environment and corresponding norms and values.
Besides influencing the adaptation role, the nature of self-interest also influences the safeguarding role, that protects the common understanding of the social contract, by sustaining mutual trust. In some cases (C6, C10, C18) mutual trust is sustained by being open towards other cultural environments, “The goal is to understand each other, to get to know each other,
understand the company, understand the culture and understand the processes” (C10). In other
cases (C1, C9) due to commitment that is established. Commitment is created by the willingness from both parties to collaborate, “Both sides tried to establish the relationship, but also both
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mechanisms contribute to minimizing opportunism and to safeguarding of the interests in the BSR. In table 13 an overview of the findings on self-interest is presented.
TABLE 13
INFLUENCE OF SELF-INTEREST ON ROLE OF SOCIAL CONTRACT
4.2.2 Influence of Tolerance of Ambiguity
The coordination role of the social contract is influenced by tolerance of ambiguity because openness to different cultural environments leads to increased coordination and harmonization of desired beliefs, attitudes, and goals to maintain structure in the BSR. In a part of the cases (C6, C7, C9, C10, C11, C14, C18) the importance of structure in the BSR affected for instance the coordinating role with different understandings of norms and values in the BSR, “Every
time you are there as a Western-European you mention things that are important. Safety is important, environment is important, human rights are important. You need to say that every single time so that they would understand that it is something that should be really considered”
(C14). By coordinating and harmonizing both the buyer and supplier’s understandings of norms and values into a common understanding, the risks of uncertainty and opportunistic behavior are minimized.
In some cases (C7, C14, C18) the common understanding that has been harmonized by the coordination role, is used as a mechanism to avert risks in the BSR. Aside from adapting to a supplier’s cultural environment to seek for mutual interests through trust and commitment, adaptation also functions as a tool to avert risks and uncertainty and is thus heavily intertwined with the safeguarding role of the social contract, “It was a meeting with Chinese people who
know everything about the culture in Europe. There was told how to deal with certain situations. We had role play to see what went wrong. Just to make sure that if someone was send out to china that they would know something about the culture, and how to behave” (C18). This
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and exchanging information beforehand because it creates an understanding and a support base” (C2). Hence, it appears that a common understanding mitigates uncertainty and risks of
opportunistic behavior. Furthermore, in some cases (C10, C13, C14, C15) buyers indicate that they safeguard the social contract by bridging uncertainty originated by cultural differences through the use of local offices, that act as intermediaries, “We even have an own office in
China. Why do we have that? We need people to understand the culture, we need to connect the European culture with the Chinese culture” (C15). This implies that less emphasis is needed
on the safeguarding role since there is already a common understanding between the supplier and the local office. In table 14 an overview of the findings on tolerance of ambiguity is presented.
TABLE 14
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5 DISCUSSION
Up to the researcher’s knowledge, this study is one of the first to investigate how national culture characteristics influence social contracts. This study acknowledges the influence of national culture on social contracts, that already was identified by Leung et al. (2005), and extends it by showing the relationship between national culture and the content and role of the social contract. Moreover, it is recognized that social contracts are initiated from the first contact with the supplier, far before the formal contract is signed (Karjalainen & Salmi, 2013; Li & Choi, 2009). Therefore, it links to the limited explored field of social contracts in the pre-contractual phase of BSRs. This is considered important since it is found that the pre-pre-contractual phase already has an influence on a firm’s performance (Broekhuis & Scholten, 2018). In sections 5.1, 5.2, and 5.3, the main outcomes of this research will be discussed by formulating propositions.
5.1 A Tailored Approach due to Cultural Influence
In practice, the tendency of buyers to push their own norms, values, and behavior on culturally different suppliers is still widely observable, often leading to conflicts (Johnson et al., 2006). Hence, the purpose of this research is to see how national culture characteristics influence the content and role in the pre-contractual phase of the social contract to determine a suitable relational approach for buyers to increase the BSR’s performance. From the findings, it became evident that the dimensions self-interest, tolerance of ambiguity, inequality, and
future-orientation all have an influence on how the content of the social contract is shaped. It was
made clear that cultural influences determine the content of the social contract because different cultural environments lead to different understandings of the norms and values of the social contract. The same applied for the roles, cultural influences lead to a higher need for coordination and adaptation of different understandings of the norms and values, into a common understanding. As well is there a higher need to safeguard this common understanding to enable a successful BSR. Since culturally different suppliers need a more extensive social contract and also need more coordination and safeguarding to reach a common understanding, compared to suppliers with similar cultures to the buyer, the following is proposed:
Proposition 1: National culture influences the content and role of a social contract and
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5.2 Influence of National Culture on the Content of the Social Contract
In this subsection, the influences of self-interest, tolerance of ambiguity, inequality, and
future-orientation on the content of the social contract will be discussed separately. The discussion of
each separate variable will conclude with a proposition that answers the research question. Influence of Self-interest
This study identified that self-interest influences the attitudes and beliefs of the social contract, due to respectively a mutual dependency and common understanding of beliefs between the buyer and supplier. Buyers often select suppliers that share a similar culture, because these have a similar understanding of attitudes and beliefs and are suitable to undertake collective actions with, acknowledging the findings of Dunfee et al. (1999). Meanwhile, self-interest also influences the attitudes due to independency that is present in the BSR. Independency is often found in relationships that share a different understanding of attitudes and interests, leading buyers to seek their own interests. Furthermore, an uncommon understanding of beliefs often paved the way for personal beliefs about the relationship by buyers to pursue their own ideals. Buyers often had cultural predispositions of the supplier. These were often related to trust-issues and impacted the long-term performance of the relationship (Cannon et al., 2010). Therefore, the findings of this study contradicted with collectivistic values of the supplier’s cultures. Buyers rather opt for suppliers that have a common understanding of attitudes and beliefs, that have an individualistic nature, than for suppliers that have a collectivistic nature and an uncommon understanding. Moreover, values of self-interest influenced the relational norms due to transparency that was established by information sharing. Hence, the following is proposed:
Proposition 2A: The content of the social contract is influenced by self-interest due to
the relational posture, the common understanding, and the level of transparency that are established in the BSR, leading to the pursuance of individual or mutual goals.
Influence of Tolerance of Ambiguity
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the chances of opportunistic behavior to strengthen the BSR. Furthermore, this study confirms the finding of Dunfee and Warren (2001) that culture influences the norms due to different expectations of behavior. This research extended this finding by specifying that tolerance of ambiguity influenced the social and ethical norms due to a different understanding of appropriate behavior in the BSR and due to unclear communication. As the openness to uncertainty in the BSR leads to different expectations of behavior, language barriers and to unethical behavior of the supplier, the likelihood of uncertainty and opportunistic behavior increased. Moreover, intolerance of ambiguity impacts the relational norms due to mutual understanding of ideals, buyers prevent uncertainty and opportunism due to their awareness of different beliefs and attitudes of suppliers. Last, tolerance of ambiguity influences relational norms due to tolerating supplier’s influence by adjusting to the supplier’s cultural values to mitigate opportunism. From the above, the following is proposed:
Proposition 2B: The content of the social contract is influenced by tolerance of
ambiguity due to reliability, the understanding of appropriate behavior, common understanding of ideals, and the communication norms that are established in the BSR, leading to risk-averting behaviors.
Influence of Inequality
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Proposition 2C: The content of the social contract is influenced by inequality due to
the power distribution, the mutual agreement of the power distribution, and the acceptance of power usage that are established in the BSR, leading to individual or mutual satisfaction.
Influence of Future-orientation
Consistent with Peterson et al. (2002) this research found that future-orientation influences the social contract due to mutual dependency of the buyer and supplier. This research extended these findings by specifying that mutual dependency influences the attitudes of the social contract. This mutual dependency leads to mutual investments in the relationship on the short-term to ensure long-short-term gains, which is consistent with the findings of Ganesan (1993). Aside from mutual dependency, this study also found that future-orientation influences the attitudes due to independency of parties, leading to uncooperative attitudes and hindering future strategic development of the BSR. Thus, this research identified that Dutch buyers do not engage in strategic partnerships with suppliers outside of the West, despite being more long-term oriented. This ties in with earlier findings about trust-issues, language barriers, and the differences in culture with such suppliers. Furthermore, orientation influences the beliefs due to future-oriented behaviors that are shown in the BSR. This is in line with Cannon et al. (2010) who found that future-oriented behaviors ensure relationship continuity by locking down commitment and aiming for long-term goals. This study adds to the literature that buyer and supplier do not collaborate with suppliers from cultures that are short-term oriented, thus, the influence of future-orientation is visible. Hence, the following is proposed:
Proposition 2D: The content of the social contract is influenced by future-orientation
due to the relational posture and future-oriented behaviors that are established in the BSR leading to commitment and a long-term orientation.
5.3 Influence of National Culture on the Role of the Social Contract
In this subsection, the influences of self-interest, tolerance of ambiguity, inequality, and
future-orientation on the role of the social contract will be discussed separately. The discussion of
each separate variable will conclude with a proposition that answers the research question. Influence of Self-interest
