An assessment of supply chain managers' trust in online auctions

Purpose – The purpose of this study is to empirically test the levels of trust supply chain managers exhibit regarding online auctions. The study seeks to test the hypotheses that supply chain managers with higher levels of trust in online auctions would exhibit more familiarity with online auctions, more positive relationships with suppliers, stronger focus on cost management, a stronger focus on revenue enhancement, and greater levels of participation. Design/methodology/approach – A review of the extant literature provided the basis for the development of an online pilot study that was e-mailed to 100 supply chain managers. The results of the pilot study were used to develop an online survey instrument that was e-mailed to 2,313 current members of the Council of Supply Chain Management Professionals (CSCMP) and the Institute of Supply Management. A total of 213 usable questionnaires were returned, resulting in a 9.2 percent response rate. Findings – The data were analyzed via t-test, MANOVA and ANOVA. The study indicated that online auction users exhibit high levels of trust in online auctions. The study also found that those with higher levels of familiarity with online auctions, with stronger positive relationships with online auction suppliers, and with stronger focus on cost management also exhibited higher levels of trust in online auctions. Contrary to expectations study findings indicate that higher levels of perceived firm profitability and of online auction participation do not lead to increased levels of trust in online auctions. Practical implications – The study provides a number of important implications. First, it is important for supply chain managers to recognize the important role that trust continues to play in business relationships. Supply chain managers are advised to be cognizant of the fact that some suppliers may be reluctant to participate in online auctions because they fear participation might damage customer relationships that they have spent years cultivating. Finally, supply chain managers are advised to consider the use of online auctions in order to achieve cost management objectives. Originality/value – The research makes an important contribution to the literature because it seeks to assess supply chain managers’ level of trust in online auctions and how this impacts on the extent to which they participate in this exchange mechanism. An equally important contribution provided by the research is that it focuses on the level of trust in online auctions in general, whereas the preponderance of past research has focused on reverse or price descending auctions only.