Environmental uncertainty and interfirm controls: The moderating effect of honesty

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This study investigates the moderating effect of honesty on the level of interfirm control in uncertain environments. Exchange parties relay information on markets and performance, with which they may or not be honest, and some-times face uncertainty regarding the market and the supply of products. In this study, honesty was revealed to be a crucial factor for buyers who need to develop a flexible relationship with a supplier in an uncertain situation. Buyers who trust the honesty of their supplier may have an advantage when adapting to uncertain environments by relying on the norm of flexibility. The honest supplier gives its buyer a perception that the supplier will not take advantage of the uncertain environment for its benefit. The buyer therefore can adapt to an uncertain environment by depending on flexibility.

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Journal of Marketing Thought