Commitment

Much of the literature on inter-organisational collaboration between two or more firms cites Morgan and Hunt‟s (1994) key article on the role of trust and commitment in developing quality relationships. Although these authors acknowledge the presence of contextual factors in determining the nature of inter-organisational exchange, they duly

68 emphasise the contribution of trust and commitment to relationship success. Both

variables are influenced by the presence of shared values, with trust also being positively influenced by communication, and negatively influenced by opportunistic behaviour (Morgan & Hunt, 1994). Commitment is linked closely with the degree of relationship benefit, and negatively affected by the perceived costs of terminating the relationship or switching to another party (Morgan & Hunt, 1994). When both commitment and trust are present, inter-organisational relationships will be conducive to an environment of

cooperation and collaboration, rather than competition and conflict.

Like trust, the concept of relationship commitment is grounded in long-term exchange between firms. From a network perspective, commitment is measured by a firm‟s desire and effort to maintain network linkages (Carson et al., 2004; Coote, Forrest & Tam, 2003; Dwyer et al., 1987; Morgan & Hunt, 1994; Morris et al., 2007). Such efforts require both willingness, and an ability, to make financial and non-financial investments in the

relationship (Morris et al., 2007). Non-financial investments can include time, effort, attention, and expertise, while financial investment can take the form of resources or membership fees. Commitment can, therefore, distinguish ongoing inter-organisational relationships from one-off transitory exchange between firms (Palmer, 2002). Further, commitment can be measured by analysing the frequency of communication between network members (Carson et al., 2004).

Many scholars have acknowledged the role of commitment in securing successful network relationships (see, for example, Anderson & Weitz, 1992; Dwyer et al., 1987; Hadjikhani & Thilenius, 2005; Morgan & Hunt, 1994). In particular, commitment has also been cited as key factor influencing the presence of cooperation between natural resource-based producers through its effect on efficiency and effectiveness (Felzensztein & Gimmon, 2008). However, commitment can also be viewed as an outcome of

successful inter-organisational relationships (Morgan & Hunt, 1994). The fact that all parties are willing to cooperate reduces the chances of any one party exiting the network.

69 Although there is wide agreement regarding the definition of inter-organisational

commitment, there is a lack of in-depth research that has specifically examined the nature of commitment at the horizontal network level. Instead, most studies focus on the nature of commitment in dyadic relationships between buyers and sellers (Anderson & Weitz, 1992; Coote et al., 2003; Somogyi et al., 2010). Coote et al. (2003), for example, argued that trust, communication quality, conflict, and social, ethnic and economic similarity, were all antecedents of commitment in non-Western buyer-seller relationships. Testing their theory empirically with a sample of over one hundred and fifty Chinese businesses, the authors found that communication and conflict appeared to be more important predictors of commitment, than trust and similarity. Overall, encouraging two-way communication and information exchange, and avoiding conflict and criticism, can assist firms to enhance the commitment and trust levels in their relationships and networks (Coote et al., 2003). This finding is somewhat inconsistent with previous research that argues trust is the primary precursor to, and mediating variable of, inter-organisational commitment (de Ruyter, Moorman & Lemmink, 2001; Morgan & Hunt, 1994).

In all forms of inter-organisational relationships, horizontal networks included,

commitment is grounded in the logic of stability and sacrifice (Anderson & Weitz, 1992; Hadjikhani & Thilenius, 2005). In the context of buyer-seller relationships, commitment implies that the parties have adopted a long-term orientation to the relationship and are willing to make short-term sacrifices for long-term gains (Dwyer et al., 1987).

Conversely, the presence of commitment in horizontal networks, such as cooperative marketing associations, has been more closely linked to the development of social bonds (Palmer, 2002). Frequent social interaction which occurs between parties in an industrial network is a precursor to firms sharing information and experiences, and in doing so, they begin to adapt their processes and products to suit other members of the network

(Zineldin, 2004). Over time, this behaviour evolves into commitment, which subsequently leads to higher levels of trust and a more conducive atmosphere for maintaining collaboration (Zineldin, 2004).

70 Levels of commitment may, however, vary between formal and informal networks and between members of the same network. In a formal business network, the firms that are more committed will generally devote more of their time and resources to fulfilling joint network activities (Bureau of Industry Economics, 1995). Similarly, commitment may be measured by analysing a firm‟s attendance at network meetings, and their willingness to stand for official positions of responsibility (Palmer, 2002). In informal networks, commitment may derive more from an individual‟s identification, affiliation, and an emotional attachment to the network (Achrol, 1997). In both formal and informal networks, firms that have similar goals and values are likely be more committed to the relationship because their actions benefit one another directly (Achrol, 1997).

Although commitment is a well-established precursor to successful inter-organisational relationships and networks, it rarely influences inter-organisational relationships on its own. By adopting a spirit of trust and commitment, firms adopt a win-win approach, and

in doing so, realise that it is more effective to create a „larger pie than [to] obtain a bigger slice‟ (Zineldin, 2004: 783). Additionally, when both trust and commitment are present in cooperative relationships between competitors, the firms involved are more likely to share critical information and experiences with one another (Morris et al., 2007). Commitment may also be influenced by the notion of mutual benefit. For example, Amaldoss, Meyer, Raju and Rapoport (2000) found that when firms in a horizontal alliance receive equal benefit from the relationship, commitment increases at a rapid rate. This finding is consistent with research conducted by Morgan and Hunt (1994), who suggested that firms show high levels of commitment when the relationship benefits are greater, as these in turn result in the firm experiencing improved productivity, wider distribution, higher customer satisfaction and better product performance. In contrast, when a firm no longer perceives there to be a benefit associated with networking, their commitment will subside and they will most likely choose to exit the network (Palmer, 2002).

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