Interpersonal factors as drivers of quality and performance in Western-Hong Kong inter-organizational business relationships

The authors report the findings of a study conducted among a sample of 202 Hong Kong-based Chinese importing companies regarding their working relationships with Western export manufacturers. In particular, the study emphasizes the effect of interpersonal factors on financial performance through the intervening roles of intercompany trust and relationship quality. Using structural equation modelling, the authors confirm that (1) several interpersonal relational dimensions - namely, personal communication (sijiao), personal credibility (xinyong), and personal affection (ganqing) - positively influence interfirm trust; (2) trust plays an instrumental role in enhancing the components of the interfirm relationship quality (i.e., cooperation, commitment, and satisfaction); (3) interfirm relationship quality is positively related to superior financial performance; and (4) most of the associations between each of the interpersonal factors and interfirm trust were moderated by the importer's size and foreign supplier's origin as well as by the length of the relationship and which party initiated the relationship. The authors extract several conclusions and implications from the findings and provide directions for further research.