Question

A different small supplier (to a large pharmaceutical company) wants to improve its capabilities in a bid to help it become a preferred supplier. The question is which capabilities to focus on first. One member of your team suggests that a large company like your customer will probably be impressed most by technical expertise, and recommends you focus first on credibility. Evaluate this suggestion in the context of Green’s trust equation. Is this the best choice, or should your team focus first on some other capability that will address some other element of the trust equation? Explain your reasoning.

Answer 1

The trust equation provided by its founder Charles Green suggests a trust model. The trust model provides a framework to evaluate trustworthiness. The Green provided four objective variables to measure the trustworthiness to calculate the Trust Quotient, generally referred to as a TQ. These four variables are Self-Orientation, Intimacy, Credibility, and Reliability. The Green defined the TQ as addition of Intimacy, Credibility, and Reliability divided by Self-Orientation. In the trust equation, as we can see the most important variable is Self-Orientation. A seller with a low self-orientation is able to completely and honestly focus on the customer needs instead of focusing on his own sake, but for the sake of the customer.

So, when we try to analyze the given situation with a small seller trying to improve its capabilities in a bid to help it become a preferred supplier to a large pharmaceutical company. Definitely the suggestion of the team member to first focus on the credibility of the small seller, might not be the best choice to start with in order to be the preferred supplier for the large pharmaceutical company. The Green trust equation suggests that the most important objective variable is Self-Orientation, so the small seller should have first focused on the Self-Orientation for the successful bid. If a small seller is able to decrease the value of the variable Self-Orientation, the value of the trust(the TQ) will automatically get increased and the value of the other three object variables (Intimacy, Credibility, and Reliability) will automatically get increased.

So, in summary, the best choice for the small seller to start with the focus on Self-Orientation, in order to improve its chances in a bid with the large pharmaceutical company.