Development and retaining model of long term relationship between buyers and sellers in supply chain of palm oil industry in Thailand: A seller's perspective

Abstract

This study aims to investigate important factors influencing on long term relationship between palm oil mill plants and palm oil yards in Thailand by studying on points of view of sellers (palm oil yards). This research is a quantitative research and its hypothetical model was created from related theories and researches. The obtained data was collected from 393 palm oil yards in Thailand and SEM was employed to test hypotheses. It was found that relationship quality had direct influence on long t e rm relationship while price satisfaction had no direct influence on long t e rm relationship. On the other hand, it had indirect influence on long t e rm relationship through relationship quality. Relational norms had direct influence on price satisfaction and indirect influence on long term relationship through relationship quality and long term relationship. Finally, supply strategy had direct influence on relationship quality as well as had indirect influence on long t e rm relationship through relationship quality. Executives of palm oil mill plants are able to apply this model by determining supply strategy and developing relational norms to be consistent with demands of palm sellers leading to price satisfaction and relationship quality influencing on intention to maintain long term relationship of palm sellers.