Trust is the expectation that the other party will behave in a predictable and mutually acceptable way. In inter-firm relationships, the presence or absence of trust can affect the level of cost in a relationship. The existence of trust is thought to lower the transaction costs in a relationship. For example, if a buyer inspects incoming goods to check that the goods supplied correspond to the goods ordered, this adds a layer of cost. This in turn reflects an absence of contractual trust. Some of the benefits of cooperative sourcing strategies are based on reducing system costs by substituting cooperation for opportunism.

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Discover the world’s largest Glossary of Procurement terms

With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.