An Investigation of Justice in Supply Chain Trust and Relationship Commitment-An Empirical Study of Pakistan

In recent years supply chain integration (SCI) has received increasing attention from scholars and practitioners. However, our knowledge of what influences the supply chain integration practice of relationship commitment is still very limited. The objective of this study is to investigate the relationship among supply chain justices (procedural, distributive and interactional), trust and inter-firms relationship commitment in mainland Pakistan. The research variables have considerable importance in the literature of supply chain management (SCM). The conceptual model comprises five hypotheses. Then hypotheses are tested via an empirical study in which data are collected from 170 manufacturers, distributors, suppliers and retailers of main stream spectrum industries in Pakistan. We used exploratory factor analysis (EFA), confirmatory factor analysis (CFA) to examine the validity and reliability of the measurement model, and structural equation modeling (SEM) to test the hypotheses. The findings delineate that supply chain justices can develop relationship commitment (affective and continuance) via establishing trust among supply chain partners. Moreover, this study reveals interesting and useful implications of supply chain justices, trust and relationship commitment for practitioners.


INTRODUCTION
Supply chain integration (SCI) research has gained much attention and interest due to the changing manufacturing strategies and dramatic increase in globalization (Cousins & Menguc, 2006).Relationship commitment is the most famous practice of supply chain integration in supply chain management literature (Zhao et al., 2008;Flynn et al., 2008).
Relationship commitment is an attitude of Supply chain partners about the development and maintenance of a stable, long lasting mutual relationship (Anderson & Weitz, 1992;Moore, 1998).It is the willingness to invest, financial, physical and relationship based resources in relationship (Moorman, 1992;Morgan & Hunt, 1994).Moreover, Allen & Meyer (1990) have characterized commitment as an affective and continuance.The affective commitment is based on the "affective or emotional attachment to the organization such that the strongly committed individual identifies with, is involved in, and enjoys membership in the organization.The continuance commitment in exchange relationship is built on the side bets, switching costs and scarcity of alternatives.
It is investigated that successful alliances have a long term orientation that required loyalty, trust, sharing of risk and reward and information (Ellram & Cooper, 1990).In the logistics alliances parties of the relationships seek to benefit from synergy of working together (Bowersox, 1990).Supply chain partners can develop trust by sharing benefits and burdens, so in this way relationship parties are able to manage their risk.Subsequently, these relationships are characterized by a high level of trust, dependency, cooperation, sharing of risk and rewards (Moore, 1998).Based on the aforementioned researches, we deduce that trust and commitment play significant role in the supply chain integration.Therefore, we are interested to verify and understand the supply chain justices (procedural, distributive and interactional) consequences in the Pakistan firms supply chain.The key research questions this study tries to address are as follows: How justice can develop trust in the supply chain of Pakistan firms?Does trust contribute to establish strong relationship commitment in the Pakistan firms supply chain?
The remainder of this paper is structured as follows.Section 2, a brief literature review of supply chain justices, trust, relationship commitment, and a set of four hypotheses related to the conceptual model are presented.Section 3, the research methodology is described.Section 4, data analysis and discussion of results are given.Managerial implications, conclusions, limitations and future research direction are illustrated in Section 5.

LITERATURE REVIEWS AND RESEARCH HYPOTHESES
This study investigates the effects of supply chain justices on trust and the consequent impact on relationship commitment.A review of detailed related literature was undertaken with the main focus on defining the research variables as well as the conceptualized relationship between them.The research framework is presented in Fig. 1.

The relationship between supply chain procedural justice and trust
The first dimension is supply chain procedural justice (PJ).It refers as fairness about the policies and procedure to be used to handling the vulnerabilities between the partners.It refers that fairness regarding means which have been used to determine the outcomes in the relationship.Procedural justice has the stronger effects on the relationship as compared to the distributive justice, weaker partner has examined and evaluate the strong partner system of PJ which stimulate and strengthen the relationship intensity (Kumar, 1996).
Faire procedures and processes have been found that moderate the impact of negative reactions such as mistrust.The various dynamics of procedural justice have linked to a number of positive attitudinal and behavioral reactions as improved trust in management (Tyler & Lind, 1992).
PJ has a positive influence on the manager's belief to encourage the employee initiatives and to share information with them (Wang & Nayir, 2009).Particularly, recognizing the importance of Integrity ensures the fair and consistent application of moral and ethical procedure to generate equity and trust (Bews & Uys, 2002).However, the lack of procedural justice has likely to generate lower levels of trust.These kinds of perceptions have more impact as compared to distributive justice because the outcomes have been viewed to happening only once while procedures are consistent and considered to have a more enduring quality (Pillai et al., 2001).Therefore, we propose the following hypothesis.
H1: There is a positive relationship between supply chain procedural justice and trust in the context of supply chain relationships of firms in Pakistan.

The relationship between supply chain distributive justice and trust
Distributive justice is the second dimension, and Adams (1965) defines distributive justice as equity; likewise ratios of outcomes to inputs are equal to the ratio of outcomes to inputs of others.It refers as the equity of reward commensurate as efforts expanded in the relationship shared between the partners (Kumar, 1996).It argues that higher level of organizational outcome distribution will likely ensure the highest level of trust (Pillai et al., 2001), the manifestation of trust is based on the fulfillment of the obligations (Herriot et al.,1998) and fulfillment of obligations is positively related with generation of trust (Saunders & Thornhill, 2003).Therefore, we propose the following hypothesis.
H2: There is a positive relationship between supply chain distributive justice and trust in the context of supply chain relationships of firms in Pakistan.

The relationship between supply chain interactional justice and trust
The third dimension is interactional justice, which deals the aspect of the communication processes and the degree to which partners perceives the exchange of information as fair in the relationship.It is the way to acquire the appropriate insights about the individual who are conducting the business and the organizations themselves (Narasimhan et al., 2013).It is the only justice dimension that is the best predictor of organizational performance (Wang et al., 2010).Moreover, interactional justice comprising two forms, namely interpersonal and informational justice.Interpersonal justice refers as individual reactions about the decision outcome while information justice refers as individual reactions about the procedures (Greenberg, 1990;Greenberg & Greenberg, 1993).Interactional justice in which people have been treated has likely to generate the significant impact on the perceptions not only about the process, but also the moral obligations to treat everyone fairly, that reinforces the process and their levels of trust (Saunders & Thornhill, 2003).Therefore, we propose the following hypothesis.
H3: There is a positive relationship between supply chain interactional justice and trust in the context of supply chain relationships of firms in Pakistan.

The relationship between supply chain trust and relationship commitment
Trust is a willingness to rely on the exchange partner (Moorman et al., 1993).Trust has gained significant importance and to become one of the top priorities of upholding the relationship among the supply chain partners (Yeung et al., 2009).The high level of trust relationship produces vital benefits for supply chain partners as it improves firm performance and increase the relationship satisfaction ( Johnston et al., 2004).Relationship commitment has been identified, one the critical factor that discriminate whether relationship to be continued or break down (Wilson & Vlosky, 1998).Allen and Meyer (1990) have characterized commitment as an affective and continuance.The affective commitment is based on the "affective or emotional attachment to the organization such that the strongly committed individual identifies with, is involved in, and enjoys membership in the organization.The continuance commitment in exchange relationship is built on the side bets, switching costs and scarcity of alternatives.
Particularly trust increases the confidence of the partners and improves commitment that reduces risk of opportunistic behavior in the effectiveness of the future exchange relationship and enforced to commit to the relationship (Moore, 1998;De Ruyter et al., 2001).Therefore, we propose the following hypotheses.

H4: There is a positive relationship between supply chain trust affective commitments in the context of supply chain relationships of firms in Pakistan.
H5: There is a positive relationship between supply chain trust and continuance commitment in the context of supply chain relationships of firms in Pakistan.

Questionnaire design
The questionnaire included questions about the demographic profile of the companies, and questions related to the supply chain justices, trust and processes integration.Therefore, we surveyed the literature to identify valid measures for related constructs and adapted existing scales to measure supply chain justices i.e. procedural and distributive (Narasimhan et al., 2013;Griffith et al., 2006), interactional (Narasimhan et al., 2013;Luo, 2007), trust (Kumar et al., 1995;Chen et al., 2011) and relationship commitment (Allen & Meyer, 1990;Wu et al., 2004).Since the drawn scales from literature were in English.Thus, we used the English version questionnaire with minor modifications in mainland Pakistan, because the official language is English in Pakistan.All the items were measured on a seven-point-Likert scale ranging from strongly disagree to strongly agree (1=strongly disagree; 7=strongly agree).The complete scales are listed in Appendix A.

Sampling and data collection
The data used to test the hypotheses are drawn from the diverse spectrum of industries in Pakistan.The study sample units were consisted of a wide range of industries including electronics and communication, mechanical manufacturing (tractors), cement, foods, textile, agriculture (fertilizers and pesticide), petroleum, furniture, retail and tobacco.The companies taking part in the survey have regional, national and international operational domains.The survey was conducted from June to August 2014.The study respondents belong to the medium and large sized companies which are residing in major cities (i.e.Karachi, Sukkur, Dera Ghazi Khan, Multan, Sahiwal & Lahore) of Pakistan.
The survey provides the respondents an incentive for completing and returning the questionnaires.Therefore, two hundred fifty questionnaires were distributed initially, a total of 197 questionnaires were returned.Out of the 197 collected, 27 questionnaires were either incomplete or answers were found to be unreliable.Subsequent data analyses were conducted on the 170 usable questionnaires.The response rate was 78.80%.The profile of the useable respondents and their characteristics are listed in Table 1.

Reliability analysis
We used Cronbach's alpha to evaluate the construct reliability (Flynn et al., 1990), with threshold value of 0.70 recommended by Hair et al. (2006).In our study all the constructs are higher than the minimum recommended critical value.As shown in Table 3, Cronbach's alpha values of the measures are above the minimum recommended critical value and ranged from 0.88 to 0.95.Therefore, results demonstrate the highly reliable theoretical constructs of the study.

Unidimensionality
Confirmatory factor analysis (CFA) is used to establish unidimensionality.The CFA results of all measurement models have acceptable fit indices that prove unidimensionality of the constructs which can be seen from Table 4. Furthermore, the convergent and discriminant validities established in the subsequent section to solidify the extent of unidimensionality of the constructs.
The average variance extracted (AVE) of each construct is greater than the variance shared with other constructs that can be seen in Table 3.That exhibited the discriminant validity of all scales is adequate.Moreover, all AVE exceeded 0.50, which indicates strong construct validity.In overall the measurement results are satisfactory and recommended that it is appropriate to proceed with the investigation and evaluation of the theoretical constructs.Moreover, the higher value of AVE, CR and factor loading results show the adequate convergent validity of the measurement items.The results of the convergent validity test are also presented in Table 3.

DATA ANALYSIS AND DISCUSSION OF RESULTS
We used AMOS to analyze the data and demonstrate structural equation modeling (SEM), which is a powerful multivariate analysis technique used to measure latent variables and investigate the causal relationship among variables.Particularly, SEM allows conducting confirmatory factor analysis (CFA) for theory development and testing.It is helpful and deemed a suitable tool to test the hypotheses in this study.The overall model fit indices are x 2 =500.82,df=251 (p-val-ues=0.00),GFI=0.91,AGFI=0.91,NFI=0.91,CFI=0.95,RMSEA=0.048indicating that model is acceptable with no substantive differences.The fit indices of structural model are presented in Table 4. Moreover the description of the model factor correlation matrix is given in Table 5.The higher, the better The higher, the better In fact, trust is essential to developing and maintaining relationships between firms in supply chains (Skandrani et al., 2011).Supply chain justice can mitigate damage trust in varying disruption situations i.e. isolated vs. widespread, short term vs. long duration (Wang et al., 2014).However, the trust has been warranted continuity of the supply chain relationships.While justice has played a critical role to eliminate the unethical behaviors, because unethical behavior negatively effects of continuity of the relationships (Kaynak et al., 2015).Therefore, our study results are supported by the aforementioned studies.In sum, supply chain justice can establish trust in supply chain relationships of the diverse range of the industries especially developing countries.
Similarly, supply chain justice also developed both sorts of relationship commitment between partners.In the volatile business environment, justice is vital for supply chain integration and relationship performance.

MANAGERIAL IMPLICATIONS
The purpose of this study is to understand how supply chain justices i.e. procedural, distributive and interactional improve relationship commitment through developing trust among the supply chain partners.Data collected from 170 manufacturers, distributors, suppliers and retailers of Pakistan.We find that a higher level of justice mutually perceived by all parties is positively associated with a higher level of trust, which is devoted to supply chain activities by all parties.In turn, the higher level of trust contributes to improve affective and continuance commitment of supply chain partners.
The findings of this study provide new insight for the justice and supply chain management literature, and also have some practical implications for managers.First, supply chain justices mutually shared by all supply chain partners can contribute in the development of trust which improves both sorts of relationship commitment significantly.Second, it is important for supply chain manager to create justice atmosphere by incorporating the three dimensions of justice.Third, the results of this study indicate that each of the three justice types contributes to a fair and just atmosphere in the supply chain integration; in such an atmosphere firms will be more likely to develop trust which in turn to ultimately improve affective and continuance commitment of supply chain partners.

CONCLUSIONS
We examined the supply chain justices' role in the development of trust and relationship commitment based on the sample of Pakistan supply chain firms.We confirmed that supply chain justices have directly contributed in the development of supply chain partners' trust, which in turn to improve the relationship commitment of supply chain partners.
This study encompasses several limitations which create a new paradigm for further research.
First, the study sample units consist of various industries.Therefore, it is the strength of this study, but some industries have very small sample contributions.Second, there is not a differentiation concerning the size of the firms involved in this study.Thus, results may differ for SMEs and large size firms.Third, results reported in this paper from a Pakistan.Therefore, results may differ for firms located in different areas which are operating in different cultural, environmental and political conditions.Therefore, future research might be conducted to examine the justices' impact on trust in the specific industries under different geographic settings.
Our partners have often provided us with information that has later proven to be accurate.
Our partners usually keep the promises that they make to our firm.
Whenever our partners give us advice on our business operations, we know that they are sharing their best judgment.
Our organization can count on our partners to be sincere.
Though circumstances change, we believe that our partners will be ready and willing to offer us assistance and support.

Relationship Commitment (Affective)
Your supply chain partner feels that if some problems happen in this supply chain, these problems must be made by them Your supply chain partner feels like "part of the family" in this supply chain relationship Your supply chain partner feels "emotionally attached" to this supply chain relationship 1.

3.
This supply chain relationship has a great deal of personal meaning for your supply chain partner Your supply chain partner feels a strong sense of belonging to this supply chain relationship

Relationship Commitment (Continuance)
Your supply chain partner is afraid of what might happen if he leaves this supply chain relationship It would be very hard for your supply chain partner to leave this supply chain relationship right now, even if he wants to It would be too costly for your supply chain partner to leave this supply chain relationship Your supply chain partner staying with this supply chain relationship is a matter of necessity as much as desire 4.

Tab. 3 -
Results of internal reliability and convergent validity tests.Source: Authors Own

Tab
Hair et al. (1998)iance explanation reaches 75.61%.All the items have strong loadings >0.30 on the construct in the pattern matrix.Hair et al. (1998)supported this value.The results of EFA are shown in Table 2.
).Source: Authors Own level, and also indicates the data for exploratory factor analysis (EFA) fitting.We used maximum likelihood analysis for data reduction and promax rotation with Kaiser Normalizations for clarifying the factors.Hence EFA was conducted with specifying six numbers of factors.