What Makes Executives Trust Each Other? The Determinants of the Willingness to Rely on Trust in Business Partnerships

Abstract

This paper is concerned with understanding and identifying factors that affect the willingness of business executives to rely on trust as a governance mechanism in the context of partnerships. An instrument was designed (a short business case study followed by a questionnaire) to collect data on how different executives react to the objective conditions of a business deal. Through the questionnaire, individual willingness to rely on trust, individual reaction to traditional types of trust, and sensitivity to other situations that evolve during the deal were measured. It is shown that willingness to rely on trust varies amongst executives and is not fully determined by the conditions of a deal. Furthermore, consistent with a psycho‐sociological approach to trust, it is also shown that demographic factors are related to propensity to rely on trust, and that across nationalities, the sensitivity to factors affecting trust such as partner interaction and external information differ.