The role of collaboration and technology diffusion on business performance

Purpose The purpose of this paper is to empirically test the joint impact of trust, technology diffusion and organisational capacity on collaboration and investigate the effect of the interaction among them on business performance. Design/methodology/approach A conceptual model is formulated to achieve the study’s purpose. The research employs quantitative methodology to test the validity of the model. Pilot interviews were used to select applicable attribute for each of the model’s constructs and to revise the survey questionnaire. The survey is addressed to CEOs and senior managers of 500 electrical product manufacturers in Wenzhou province, China. The questionnaire covers 20 attributes of the model’s constructs, which are measured on a seven-point scale. A structured equation modelling software known as AMOS is used to analyse data. Findings Results indicate that trust is an antecedent factor for successful collaboration, but not as a factor directly affecting business performance. However, the research shows that collaboration plays a full mediator between trust and business performance. The empirical evidence from this research implied that technology diffusion do not translate properly into collaboration and the organisations do not give adequate attention to the process performance in making collaboration with partners. In addition, the electrical Chinese organisations do not consider that the commitments of their partners exceed the expectations. Research limitations/implications This research limits investigation in China only and considers one type of industry, that is, the manufacturers of small products. Practical implications The conceptual model can be used as an audit tool for evaluating the effect of collaboration on business performance. Thus, managers could recognise weak attributes and plan for improvement. Originality/value This study provides new measurement instrument for evaluating the joint impact of collaboration, technology diffusion, trust and organisational capacity on business performance.