Inter- and Intraorganizational Trust in International Construction Joint Ventures

Abstract

International joint ventures in construction often face a highly complex and dynamic environment because, in most instances, they are formed to build large-scale engineering projects. One can distinguish two organizational levels that together constitute the joint venture system: (1) the interorganizational level formed by the partners and (2) the intraorganizational level of the joint venture. The partners seek to reconcile their different interests on the interorganizational level, as each of them follows the goal of profit optimization. Here, formal control mechanisms are more important than trust. Actors on the intraorganizational level face the construction task. One of the primary requirements is to reduce the project complexity. Within the joint venture, many international construction joint ventures disentangle their responsibilities by functional separation and delegation of work. In a social group, delegation of work requires trust in the capability and willingness of others to perform their duties without supervision. Especially during the initial phase, international construction joint ventures are high-pressure environments without established teams. Trust is a mechanism that allows to reach goals efficiently within this setting. As a consequence, we can find a special form of trust in international construction joint ventures: necessitated general trust that is extended to everyone even without prior knowledge. These findings are new and have high practical relevance as trust proves to be a most important success factor.