Proceedings of the 2nd International Conference of Business, Accounting and Economics, ICBAE 2020, 5 - 6 August 2020, Purwokerto, Indonesia

Research Article

Trustworthiness and Fulfilled Commitment in the Supplier-SMEs Relationship

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  • @INPROCEEDINGS{10.4108/eai.5-8-2020.2301181,
        author={Sesilya  Kempa and Alberthus Sandhy Pramana Santoso and Widjojo  Suprapto},
        title={Trustworthiness and Fulfilled Commitment in the  Supplier-SMEs Relationship},
        proceedings={Proceedings of the 2nd International Conference of Business, Accounting and Economics, ICBAE 2020,  5 - 6 August 2020, Purwokerto, Indonesia},
        publisher={EAI},
        proceedings_a={ICBAE},
        year={2020},
        month={10},
        keywords={transaction cost supplier relations trustworthiness fulfilled commitment},
        doi={10.4108/eai.5-8-2020.2301181}
    }
    
  • Sesilya Kempa
    Alberthus Sandhy Pramana Santoso
    Widjojo Suprapto
    Year: 2020
    Trustworthiness and Fulfilled Commitment in the Supplier-SMEs Relationship
    ICBAE
    EAI
    DOI: 10.4108/eai.5-8-2020.2301181
Sesilya Kempa1,*, Alberthus Sandhy Pramana Santoso1, Widjojo Suprapto1
  • 1: Petra Christian University, Siwalankerto 121-131
*Contact email: sesilya.kempa@petra.ac.id

Abstract

Strong global competition demands a strong relation and maintains the relationship between suppliers and small business enterprises (UKM). This study examines trust and commitment which are affected by transaction cost and supplier relations. The data were collected from business owners of UKM Kampung Kue in Surabaya, using questionnaires that were distributed to 65 respondents. The collected data were processed with a smartPLS software to get the outer model and the inner model. The results show that transaction cost has a positive and significant effect on supplier relations and trustworthiness, with P value of 0.000, and trustworthiness has a positive and significant effect on fulfilled commitment, with P value of 0.000. The results also show that the strongest relationships happen between transaction cost and supplier relations, of 0.732, and between transaction cost and trustworthiness, of 0.612. Therefore, transparency in pricing, supply availability, and payment becomes important aspects in building partnerships for both parties.