Author(s): Madhumithaa N., Bharathi R., Manikandan N and Murugan M
This study probes into describing the characteristics of the current process of integration between Automobile MNC buyers and Auto component MSMEs, given the cultural differences. The study also probes the role of antecedents (Mediating Variables) in buyer’s integration in Indian auto component industry and strategies adopted to motivate MNC automotive buyers to engage in a collaborative buyer-supplier relationship. A descriptive research design was used to study the research problem, through which the role of mediating variables viz., commitment, learning, and trust in sustaining business relationships between IACMs (Indian suppliers) and MNC OEMs (MNC buyers) has been established. Analyses on impact of National and organizational culture on business relationships in cross-cultural setting was conducted. The study's conceptual model depicts the connections between various constructs that can be empirically tested and applied to cross-cultural business contexts such as the exporter-importer relationship or franchisee-franchisor relationships. Findings proved that organizational culture had more influence in business relationship than the national culture. Among the three mediating factors “trust” acts as the major influencer and trust in business relationship is created by learning attitude towards buyer’s culture. Learning and commitment were found to act as mediating variables to understand its effect in strengthened business relationship. Antecedents for learning and commitment were also identified. According to this research, business relationships can survive cultural differences because partners learn to live with the differences in order to achieve their goals. To summarize, this study attempts to fill some of the gaps in the literature regarding trust, commitment, and learning in contrasting cultural contexts. Tier III and upcoming SME Auto Component suppliers will benefit from this study's recommendations for strengthening their business relationships with their MNC original equipment manufacturers by developing and implementing the mentioned strategies.