Relational Norms, Opportunism and Business Performance: An Empirical Evidence of Gem Dealers in Sri Lanka

Abstract

This paper attempts to explore the effect of relational norms on business performance of gem dealers in Sri Lanka. A quantitative approach was undertaken to study the research problem and the data were collected from 100 gem dealers in Ratnapura District, conducting face-to-face interviews. The data were analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM) employing SmartPLS version 3.0. The study revealed that relational norms between gem buyers and sellers have a significant positive impact on business performance (ß = 0.669 and t stat=8.1) highlighting it as a very powerful relational quality effect on business performance. It further exposed that relational norms have a significant negative impact on business opportunism (ß= - 0.888 and t stat=41.9). Whereas, opportunism denote a significant negative impact on business performance (ß = -0.303 and t stat=3.5). Thus, results confirmed all the hypothetical relationships of the study that relational norms enhance the business performance by mitigating business opportunism performing a complementary mediation effect.