Relationships for quality improvement in the Hong Kong‐China supply chain

Manufacturers recognize that trusting, long‐term relationships with suppliers can contribute to improving the quality of their products. However, developing these relationships has proved quite challenging. This study uses the theory of co‐operation and competition to specify the nature of these relationships and how they can be established. Results of structural equation analyses suggest that manufacturers and suppliers who build co‐operative rather than competitive or independent goals, are able to discuss quality issues open‐mindedly. This open‐mindedness, in turn, strengthens trust and a long‐term orientation which results in quality‐enhancing relationships with suppliers. Deutsch’s theory of co‐operation and competition, although developed largely through North American research, seems useful for understanding and developing quality supply chain partnerships in East Asia.