Impact Assessment of Inter-Organizational Trust on Virtual Organizations Performance in Nigerian Service Firms

Abstract

This investigation examines inter-organizational trust on virtual organizations performance of selected Nigerian service firms. Inter-organizational trust is the extent to which members of a firm hold a collective trust orientation towards another organization. Virtual organization is a functionally culturally diverse firm that is connected by electronic forms of communication and/or use of ICT for collaborations. In inter-organizational relationships, the most common success factor, and possibly the most critical one is trust. Trust is widely acknowledged as being important for the efficient operation of interorganizational business activities, the formation of trust remains challenging, the experience with trust despite increased interest and the acknowledged role of trust to a company’s competitiveness is that there has not yet been theoretically and empirically coherent attempts to measure trust in inter-organizational contexts to the best of my knowledge. The apparent, lack of inter-organizational trust and reliability in virtual organizations as a result of perceived risks from privacy concerns and vulnerability to fraud may impede organizations’ performance. In carrying out this investigation, three research objectives and three research questions were formulated alongside with three research hypotheses. Relevant data were reviewed, this provide an understanding of previous work in an area of investigation thereby providing basis for the researchable problem at stake. The chief instrument for data collection was questionnaire, which was designed for low, middle and top level management staff. The data was analyzed using a chi-square statistical technique. The result of the study showed that inter-organizational trust impact significantly and positively on virtual organizations commitment and performance and firm benefitted more from inter-organizational trust when the degree of interdependence between two organizations was higher. When we examine inter-organizational trust in virtual organizations from the perspective of network organizations, then we certainly conclude that interorganizational trust in virtual organizations is a new type of network. Finally, it was recommended that, the formation of organizational process should be based on trust and not on the basis of power which will result in increased commitment, job-satisfaction, performance and growth of employees and the organizations in general.