Question

they a lack of trust between trading partners as one of the main obstacles to fully achieving integration.

Describe some of the reasons why a company may not trust its suppliers, and suppliers might not trust their business customers. Then describe what each party can do to build trust.

Answer 1

Company may not trust its suppliers due to the following reasons

1) Suppliers may have better terms with reveal business or competitors

2) Suppliers from an enemy country for example: Indian Firms will not easily believe in Pakistani suppliers American Firms can’t easily believe with Chinese companies or suppliers.

3) Poor quality products and after purchase services

4) Non payment of dues on time

5) Poor sales and services representative

6) Not delivering products on time, costly producers and many other issues related to the same.

7) Using unethical and non competitive practices.

Suppliers may not trust its clients due to following reasons:

1) If, payment is not getting on time from the business level customers.

2) Posing pressure on suppliers without any specific reasons

3) Without assigning reason, returning of goods and claiming services.

4) Engaged in some legal actions without any reasons.

5) Changing agreement randomly or too much frequently basis.

6) Not making order on bulk basis.

7) Not increasing prices of purchase since many years.

Mutual trust for integration can be devised by regular talk, dialogue and efforts to build trust in business deals. Executives from both sides may try to care the terms and conditions of the agreement of business. A regular incentives and discounts may be initiated by both sides as per size of deal. There should be a mutual program in which recognition to people of both sides may be given by joint efforts. Any challenges must be immediately removed by the organizations top level executives.