Wujin Chu

Bio: Wujin Chu is an academic researcher from College of Business Administration. The author has contributed to research in topics: Supplier relationship management & Competitive advantage. The author has an hindex of 21, co-authored 49 publications receiving 4696 citations. Previous affiliations of Wujin Chu include New Generation University College & Massachusetts Institute of Technology.

The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical Evidence from the United States, Japan, and Korea

Abstract: In this paper we investigate the relationship between supplier trust in the buyer and transaction costs and information sharing in a sample of 344 supplier-automaker exchange relationships in the United States, Japan, and Korea. Our findings indicate that perceived trustworthiness reduces transaction costs and is correlated with greater information sharing in supplier-buyer relationships. Moreover, the findings suggest that the value created for transactors, in terms of lower transaction costs, may be substantial. In particular, we found that the least-trusted automaker spent significantly more of its face-to-face interaction time with suppliers on contracting and haggling when compared to the most trusted automaker. This translated into procurement (transaction) costs that were five times higher for the least trusted automaker. Finally, we argue that trust is unique as a governance mechanism because it not only minimizes transaction costs, but also has a mutually causal relationship with information sharing, which also creates value in the exchange relationship. Other governance mechanisms (e.g., contracts, financial hostages) are necessary costs incurred to prevent opportunistic behavior, but do not create value beyond transaction cost minimization. Our findings provide empirical evidence that trustworthiness lowers transaction costs and may be an important source of competitive advantage.

The Determinants of Trust in Supplier-Automaker Relationships in the U.S., Japan and Korea

Abstract: We examine the determinants of trust in 453 supplier–automaker relationships in the US, Japan, and Korea. We define trust and derive a model of its determinants drawing upon (1) an embeddedness (relationship-based) perspective, (2) a process-based perspective, and (3) an economic (hostage-based) perspective. Our findings indicate strong support for the process-based perspective in all countries; embeddedness was only important in Japan, and the economic hostage-based variable (stock ownership) was not important in any country.

Strategic Supplier Segmentation: The Next “Best Practice” in Supply Chain Management:

Abstract: This study of 453 supplier-automaker relationships in the U. S., Japan, and Korea examines the extent to which automakers manage their "arm's-length" and "partner" suppliers differently. The findings indicate that U. S. automakers have historically managed the majority of their suppliers using an arm's-length model, Korean automakers have managed suppliers primarily as partners, and Japanese automakers have somewhat different relationships with suppliers depending on the nature (i. e., degree of asset specificity and value) of the component. Only Japanese automakers have strategically segmented suppliers in such a way as to realize many of the benefits of both the arm's-length as well as the partner models. Firms should think strategically about supplier management and should not have a "one-size-fits-all" strategy for supplier management.

Industrial Purchasing: An Empirical Exploration of the Buyclass Framework:

Abstract: The Robinson, Faris, and Wind buyclass framework has been called one of the most useful concepts in organizational buyer behavior, yet the entire model has received little empirical attention. Part...

Demand Signalling and Screening in Channels of Distribution

Abstract: This paper examines two ways channel members at the manufacturing and retail ends deal with asymmetric information in the context of new product introduction. A manufacturer who has private information that demand for a new product will be high can differentiate itself from a manufacturer less confident of demand by undertaking high levels of pre-launch advertising and offering a high wholesale price. A retailer, for its part, can screen potentially high demand from potentially low demand products by stipulating a take-it-or-leave-it slotting allowance, the assumption being that the offer will be accepted only by manufacturers confident of sufficient demand to recover the high initial cost of slotting allowances. It is shown that manufacturers prefer to signal demand through advance advertising and wholesale price, retailers to screen demand through slotting allowances. It is shown that, unless advance advertising is sufficiently effective, slotting allowances yield higher total channel profits and higher social welfare.

Green supply‐chain management: A state‐of‐the‐art literature review

Abstract: Vol. 9 Issue 1 pp. 000‐000 There is a growing need for integrating environmentally sound choices into supply-chain management research and practice. Perusal of the literature shows that a broad frame of reference for green supply-chain management (GrSCM) is not adequately developed. Regulatory bodies that formulate regulations to meet societal and ecological concerns to facilitate growth of business and economy also suffer from its absence. A succinct classification to help academicians, researchers and practitioners in understanding integrated GrSCM from a wider perspective is needed. Further, sufficient literature is available to warrant such classification. This paper takes an integrated and fresh look into the area of GrSCM. The literature on GrSCM is covered exhaustively from its conceptualization, primarily taking a ‘reverse logistics angle’. Using the rich body of available literature, including earlier reviews that had relatively limited perspectives, the literature on GrSCM is classified on the basis of the problem context in supply chain’s major influential areas. It is also classified on the basis of methodology and approach adopted. Various mathematical tools/techniques used in literature vis-a-vis the contexts of GrSCM are mapped. A timeline indicating relevant papers is also provided as a ready reference. Finally, the findings and interpretations are summarized, and the main research issues and opportunities are highlighted.

Supply Chain Coordination with Contracts

Abstract: Publisher Summary This chapter reviews the supply chain coordination with contracts. Numerous supply chain models are discussed. In each model, the supply chain optimal actions are identified. The chapter extends the newsvendor model by allowing the retailer to choose the retail price in addition to the stocking quantity. Coordination is more complex in this setting because the incentives provided to align one action might cause distortions with the other action. The newsvendor model is also extended by allowing the retailer to exert costly effort to increase demand. Coordination is challenging because the retailer's effort is noncontractible—that is, the firms cannot write contracts based on the effort chosen. The chapter also discusses an infinite horizon stochastic demand model in which the retailer receives replenishments from a supplier after a constant lead time. Coordination requires that the retailer chooses a large basestock level.

Do Norms Matter in Marketing Relationships

Abstract: Transaction cost analysis is rapidly becoming an important theoretical paradigm in marketing. However, the accumulation of transaction cost studies has been accompanied by a growing body of critici...

Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations

Abstract: Under a revenue-sharing contract, a retailer pays a supplier a wholesale price for each unit purchased, plus a percentage of the revenue the retailer generates. Such contracts have become more prevalent in the videocassette rental industry relative to the more conventional wholesale price contract. This paper studies revenue-sharing contracts in a general supply chain model with revenues determined by each retailer's purchase quantity and price. Demand can be deterministic or stochastic and revenue is generated either from rentals or outright sales. Our model includes the case of a supplier selling to a classical fixed-price newsvendor or a price-setting newsvendor. We demonstrate that revenue sharing coordinates a supply chain with a single retailer (i.e., the retailer chooses optimal price and quantity) and arbitrarily allocates the supply chain's profit. We compare revenue sharing to a number of other supply chain contracts (e.g., buy-back contracts, price-discount contracts, quantity-flexibility contracts, sales-rebate contracts, franchise contracts, and quantity discounts). We find that revenue sharing is equivalent to buybacks in the newsvendor case and equivalent to price discounts in the price-setting newsvendor case. Revenue sharing also coordinates a supply chain with retailers competing in quantities, e.g., Cournot competitors or competing newsvendors with fixed prices. Despite its numerous merits, we identify several limitations of revenue sharing to (at least partially) explain why it is not prevalent in all industries. In particular, we characterize cases in which revenue sharing provides only a small improvement over the administratively cheaper wholesale price contract. Additionally, revenue sharing does not coordinate a supply chain with demand that depends on costly retail effort. We develop a variation on revenue sharing for this setting.