About my dissertation

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About my dissertation

• Dissertation Committee
• Prof. Martin E. Dresner, Chair (Logistics and
  Transportation)
• Prof. A. Michael Knemeyer (Supply Chain
  Management)
• Prof. Curtis M. Grimm (Supply Chain Management
  and Strategy)
• Prof. William J. DeWitt (Logistics and
  Transportation)
• Prof. Donna B. Hamilton, Deans representative
  (English)
• Defended proposal in May, pretest in process

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About my dissertation

• Research questions
• What factors impact firm partnering behavior with
  third-party logistics providers (3PLs)?
• What is the interplay between firm,
  inter-organizational, and environmental factors?
• Expected contributions
• Academic
• Theory-based model of partnering in logistics
  outsourcing relationships
• Integration of partnering and marketing
  literatures, applying them in a different context
• Practical
• Assist 3PLs by enhancing their relationships with
  customers, thus retaining and expanding customer
  base
• Research methodology cross-sectional survey,
  structural equation modeling
• Unit of analysis relationship, 3PL customer is
  the focal firm

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Building closer relationships is growing in
importance for 3PLs and customer firms

• On the customer side
• Globalization
• Competition
• Complex supply chains
• Increasing customer demands

• On the 3PL side
• Increasing customer demands
• Increasing competition
• Higher fuel prices, driver shortages
• Capacity crunch

Need to work together!
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Showing that they are reliable partners is a
strong feature of 3PLs marketing strategy
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Theory-based 3PL research has focused on the
positive effects of close logistics outsourcing
relationships

• Relationship characteristics (e.g.,
  communication, reputation) positively influence
  performance and relationship outcomes (e.g.,
  customer retention, referrals, service recovery)
  (Knemeyer and Murphy 2004, 2005)
• Relationship orientation improves supply chain
  effectiveness and performance (Panayides and So
  2005)
• Positive effect of relational performance on
  customer market share (Stank et al 2003)

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and this research aims to look at the
antecedents of these relationships.
The model builds upon Ganesan (1994)
Determinants of long-term orientation in
buyer-seller relationships Theoretical
framework relationship marketing social
exchange theory (SET)
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Structure of the model
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Defining the dependent variable degree of
partnering

• A partnership is a tailored business
  relationship based on mutual trust, openness,
  shared risk and shared rewards that result in
  business performance greater than would be
  achieved by the two firms working together in the
  absence of partnership. (Lambert et al 2004)
• Partnership behavioral elements are drawn from
  relational contract literature (Gardner et al
  1994)
• planning
• sharing benefits and burdens
• extendedness
• systematic operational information exchange
• mutual operating controls

No partnership elements present
Many elements of partnership present
Just short of full vertical integration, e.g.,
corporate vertical marketing systems
Arms length
Range of relationship styles
(Source Gardner et al 1994)
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SET suggests that relationship formation and
development are based on interorganizational
factors Lambe et al 2001
A firm engages in a relationship because it
believes it will be rewarding
Interactions
gt CL ?
satisfaction
Outcomes are compared to two standards (Comparison
Levels - CL)
dependence
gt CLalt ?
Trust is built over time
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Earlier partnering experiences with other 3PLs
might affect the firms capability to engage in
such relationships

• - From a social network perspective, prior
  experiences with other partners (Uzzi 1996)
• Shape firms expectations regarding the new
  relationships
• Increase the likelihood of future endeavors
• - Previous positive experiences with other 3PLs
  should impact a firms comparison level
• Learning effect
• More realistic expectations

Hypothesis Prior experience with partnering with
3PLs is positively associated with the degree of
partnering with the focal 3PL.
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Relationship marketing research has emphasized
that some firms employ relationship marketing as
a philosophy Relationship Marketing Orientation

• - To use relationship marketing, a relationship
  orientation must pervade the mind-set, values and
  norms of the organization (Day 2000)
• Relationship Marketing Orientation an
  organizational culture that puts the buyer-seller
  relationship at the center of the firm strategic
  or operational thinking (Tse et al 2004, Sin et
  al 2005)

• - Carriers within buyer-seller partnerships
  exhibit higher degrees of partnership elements
  (Gentry 1996)
• Trust and commitment are mediators of
  satisfaction only for high relational customers
  (Garbarino and Johnson 1999)

3PL
relationship
3PL customer
buyer
relationship
Hypothesis A 3PL customers relationship
marketing orientation is positively associated to
the degree of partnering with a 3PL
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A model of 3PL customers degree of partnering
7 Primary Hypotheses
Sub-model 1
Sub-model 2
Based on and expanded from Ganesan (1994)
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The antecedents of dependence are related to
environmental, relationship, and firm specific
factors

• Environmental uncertainty in the market for 3PL
  services
• Diversity negatively related to customers
  dependence on 3PL
• Volatility positively related to customers
  dependence on 3PL
• Environmental uncertainty in the product market
• Diversity positively associated with customers
  dependence on 3PL
• Volatility positively associated with customers
  dependence on 3PL
• Transaction-specific investments
• TSI by customer positively related to dependence
  on 3PL and negatively related to perceived 3PL
  dependence
• Perception of 3PL TSI negatively related to
  customers dependence and positively related to
  perceived 3PL dependence
• Firm specific
• Complexity of logistics operations positively
  associated with customers dependence on 3PL
• Customers logistics capabilities negatively
  associated with customers dependence on 3PL

Antecedents of Dependence (Sub-model 1)
Dependence of customer on 3PL
Perception of 3PLs dependence on customer
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The antecedents of trust are mainly related to
the partners behavior and experience with the
partner
Antecedents of Trust (Sub-model 2)

• A 3PL customers perception of the 3PLs TSI is
  positively related to the customers perception
  of the 3PL credibility and benevolence.
• The reputation of a 3PL is positively related to
  its customers perception of the 3PLs
  credibility.
• A customers experience with a 3PL is positively
  related to the customers perception of the 3PLs
  credibility.
• A 3PL customers satisfaction with past outcomes
  is positively related to the customers
  perception of the 3PLs credibility and
  benevolence.

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Final Model
Dependence of customer on 3PL
Perception of 3PLs dependence on customer
Based on and expanded from Ganesan (1994)
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Research Methodology

• Web-based survey of customers of Rapidão Cometa,
  a large Brazilian 3PL
• Large array of services offered
• Diverse customer base various industries,
  sizes, logistics functions contracted, experience
• Diversity of relationship styles

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Survey design and implementation
Research Methodology

• Measurement of the constructs
• most items adapted from existing research
• logistics complexity and capabilities new
  scales
• Survey pretests concurrent and retrospective
  think-aloud interviews
• Survey implementation
• Sample size approximately 4,000 customer firms
• Key informants provided by Rapidão Cometa
• Pre-notification e-mail (Rapidão Cometa)
• Web-based survey implementation
• Thank you/reminder e-mails
• Test for non-response bias

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Structural Equation Modeling
Research Methodology

• Quality of data evaluation
• Check for outliers
• Check for symmetry
• Check for missing data
• Controls (as in Knemeyer and Murphy 2005) firm
  size and number of functions outsourced
• Tests for unidimensionality, convergent and
  discriminant validity, and scale reliability
• Two-step SEM with EQS software
• Measurement phase
• Structural phase
• Check goodness-of-fit information
• Interpretation of path coefficients

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Concluding Remarks

• Managerial implications
• What factors should 3PLs emphasize in their
  relationship with customers and in the pursuit of
  new customers
• Relative impact firm vs. environmental vs.
  relationship characteristics on partnering
  behavior
• Limitations
• Not capturing dyadic observations
• All firms are customers of a single 3PL - asset
  based firm

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Thank you! Questions? Comments?
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Extras
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Partnership Construct (Gardner et al 1994)
..
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Partnership Construct a second order factor?
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Primary Hypotheses
H1 Dependence of a customer on a 3PL is
positively related to the customers degree of
partnering. H2 Perceived dependence of a 3PL on
a customer is negatively related to the
customers degree of partnering. H3 A
customers trust in a 3PLs credibility is
positively related to the degree of
partnering. H4 A customers trust in a 3PLs
benevolence is positively related to the degree
of partnering. H5 A customers satisfaction
with past outcomes of the relationship with a 3PL
is positively related to the customers degree of
partnering with that 3PL. H6 There is a
positive relationship between prior experience
with partnering with 3PLs and the degree of
partnering with the focal 3PL. H7 There is a
positive relationship between a customers
relationship marketing orientation and the degree
of partnering with a 3PL, all else constant.
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Antecedents of dependence
H8 Environmental volatility in the product
market is positively related to a customers
dependence on a 3PL. H9 Environmental diversity
in the product market is positively related to a
customers dependence on a 3PL. H10
Environmental volatility in the market for 3PL
services is positively related to a customers
dependence on a 3PL. H11 Environmental
diversity in the market for 3PL services is
negatively related to a customers dependence on
a 3PL. H12 A customers logistics complexity is
positively related to a customers dependence on
a 3PL.\ H13 A customers TSIs are positively
related to a customers dependence on a
3PL. H14 A customers TSIs are negatively
related to a customers perception of 3PL
dependence on a customer. H15 A customers
perception of a 3PLs TSIs is negatively related
to a customers dependence on a 3PL. H16 A
customers perception of a 3PLs TSIs is
positively related to a customers perception of
a 3PL dependence. H17 There is a negative
relationship between customers perceived
logistics capabilities and dependence on a 3PL.
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Antecedents of trust
H18 The reputation of a 3PL is positively
related to its customers perception of the 3PLs
credibility. H19 A customers satisfaction with
past outcomes is positively related to the
customers perception of the 3PLs
credibility. H20 A customers satisfaction with
past outcomes is positively related to the
customers perception of the 3PLs
benevolence. H21 A customers experience with a
3PL is positively related to the customers
perception of the 3PLs credibility. H22 A
customers experience with a 3PL is positively
related to the customers perception of the 3PLs
benevolence. H23. A customers perception of 3PL
specific investments is positively related to the
customers perception of the 3PLs
credibility. H24. A customers perception of 3PL
specific investments is positively related to the
customers perception of the 3PLs benevolence.