Trust in ISAs: The Role of Foreign Partners’ Knowledge Transfer, Senior Management Commitment, Goal Congruity and Control

Abstract

Abstract International Strategic Alliances (ISAs) are considered one of the most powerful mechanisms for combining competition and co-operation and for industrial restructuring on a global basis. Despite the fact that ISAs often fail to meet the goals set by the partners, their use has been rapidly increasing over the past two decades. A number of Greek enterprises seeking to expand their business activities abroad have formed ISAs with local partners, mostly in South East Europe. There is a general agreement on the role of trust on ISAs’ successful operation and positive outcomes. Furthermore, the construct of trust becomes even more important in the volatile environment of South East Europe. In this paper, three propositions are developed in order to investigate the impact of senior management commitment, control mechanisms and goal compatibility on trust among ISA partners. In addition, we suggest that trust has a positive impact on effective knowledge transfer from the partners to the ISAs. The objective of this paper is to lead to a better understanding of the above factors and to set the ground for future empirical research on the importance of trust in ISAs.