Trust In Business Relationships Research Articles

Evolving trust in business relationships – A behavioural experiment

Abstract Using situation-specific and dyadic data, we analyse how trust in inter-organisational relationships evolve over time. Based on a multidisciplinary approach, we define four trust-related concepts, which include both behavioural and perceptual aspects of this multifaceted phenomenon. We also develop the hypothesis that the behavioural consistency of the trustee affects the level of his/her trustworthiness as perceived by the trustor. To test this hypothesis, the paper specifies a finite Dynamic Trust Game that, in a unique way, models longer-term relationships characterised by interdependent actions between partners. In contrast to the simple Repeated Games modelling discrete exchange episodes, this game corresponds to the requirements of the interaction approach of the relationship management, since the iterations of the game are interrelated and embedded in previous ones. Timely development of the behavioural variables in the game reflects an inverse U-shape with an increasing willingness to cooperate until round 8, with a maximum cooperation level of 80% on average. Behaviour seems to affect the perceived level of trustworthiness. However, we need additional experimental data on inconsistent behaviours to get a clear understanding of this effect.

The moderating role of cultural similarity in developing commitment in the industrial importer-supplier relationship

PurposeThis study aims to examine whether and how cultural (dis) similarity between business entities enhances or impairs the development of commitment in the trust building process in industrial importer-foreign supplier relationships.Design/methodology/approachDrawing on theoretical lenses of transaction cost economics, resource-based view and dynamic capability view, this study investigates how cultural (dis)similarity moderates the effects of opportunism, transaction-specific investment (TSI), the relative advantage of importing and communication on commitment, leading to building trust in business relationships. Using structural equation modeling and moderated regression analysis, the study tested several predicted effects using a sample of 154 industrial importers drawn from a developing country in Asia.FindingsA key finding of the study suggests that supplier opportunism comes into play and is negatively associated with industrial importer commitment as cultural dissimilarity increases. For culturally similar countries, opportunism does not affect commitment. Conversely, TSI has a positive effect on commitment for culturally similar countries; for dissimilar countries, TSI has no effect. The study also corroborates several additional hypotheses prevalent in the literature.Research limitations/implicationsCross-sectional data rather than longitudinal data, single country rather than multi-country perspectives and data from the importer’s side rather than from both importer and exporter may affect generalizability. Future research ought to address these issues to provide further insights.Originality/valueThe paper enriches the literature and extends the nomological network for international business theory by introducing the moderating effect of business cultural similarity in building commitment. Managerial perspectives are also gleaned from the findings.

Spirituality and entrepreneurship: integration of spiritual beliefs in an entrepreneurial journey

Purpose The role of spirituality in entrepreneurship is a new area of inquiry that has emerged from different scholarly fields. There is no specific way to study spirituality as it rather depends on the context and influence of religious beliefs. This paper aims to study the integration of spirituality in the entrepreneurial journeys of individual entrepreneurs in Pakistan. Thereby focusing on the factors that set reassurance for entrepreneurs to practice their spiritual beliefs in an emerging market context. Design/methodology/approach Using a qualitative research approach and data from entrepreneurs in different businesses, this study examines how entrepreneurs reach the point where they are willing to run their businesses based on their spiritual beliefs. The data analysis technique used to study the entrepreneurs is the Gioia method of analysis, which enables key themes to emerge. Findings This study finds that the process through which Pakistani entrepreneurs run their businesses based on spiritual beliefs within their mission and goals can be considered as discerning spiritual beliefs, affirmation of spiritual beliefs and materializing beliefs into action. Each of these spiritual beliefs has been accumulated through lifelong learning and experience in which trust in business relationships is highlighted. Social implications The insights of this study can be applied to different entrepreneurial ventures to create a framework of entrepreneurial businesses that incorporate spirituality within their mission and vision statements. It can then be used to design education and training activities for other spiritual entrepreneurs to enable further entrepreneurial development in different communities. Originality/value Spirituality can alter the entrepreneurial nature of a business. This means that entrepreneurs who possess high spiritual beliefs can incorporate their spirituality within specific business functions to enable a more positive outcome. This study stands as the first in Pakistan to consider the ways entrepreneurs incorporate their spiritual beliefs in their entrepreneurial journey.

Fiduciary Law and the Preservation of Trust in Business Relationships

This chapter explores the role of mandatory fiduciary obligations in preserving trust between business parties. Because contracts are inevitably incomplete, after investment there is always a risk of opportunism. While the parties could try to draft a more detailed agreement prohibiting various forms of opportunism, the very act of haggling over such protections may signal distrust, eliciting costly reactions (defensive measures/hedging/lack of intrinsic motivation) in the counterparty. In the absence of fiduciary protections, a vulnerable party may decide to forgo important protections against opportunism, not because such protections are suboptimal or hard to specify ex ante but because bargaining for them would signal distrust. By contrast, state-imposed fiduciary obligations remove the invocation of distrust by either party to the agreement. We further observe that while fiduciary protections can help prevent distrust among a small number of contracting parties, fiduciary protections may prove inadequate in some settings, especially in addressing horizontal conflicts between beneficiaries. The chapter concludes by observing that the limits of contract and fiduciary law leave a residual zone of vulnerability in which trust and other mechanisms of risk reduction play a significant role.

Protection of public interests in the administration of legal metrology in Medan

As a metropolitan city, Medan has several advantages that support the trading activities. However, these advantages must be underpinned by legal certainty in conducting trade transactions. Measuring instruments serves as the prominent equipment in building mutual trust in business relationships. The instruments are regulated in Law Number 2 of 1981 concerning Legal Metrology (LLM). This study is legal research using a normative legal method. The data were collected from literature and were analyzed qualitatively. The results reveal several problems in the administration of legal metrology. Limited budget, lack of calibration officers, lack of support from local policies in the implementation of services, and insufficient facilities and infrastructure are the current circumstances in almost all regions including Medan. Such condition occurs because of the incomplete issues of competency in the field of legal metrology between the central and local governments after regional autonomy implementation. In conclusion, the overlapping authority between the central and local government resulted in a non-optimal administration of legal metrology in the regions. A synergy between the centralized LLM and decentralized Law Number 32 of 2014 concerning Local Government is needed. Thus protection will be achieved in the application of legal metrology services.

DEFINITION AND NATURE OF TRUST IN BUSINESS RELATIONSHIPS

The role of trust in business relationships is indisputable. Research on this phenomenon is related to different aspects. However, due to the complexity of the concepts and different theoretical backgrounds used in researches, it is difficult to capture the phenomenon of trust and its essence. Interest in the topic of trust in marketing and management is growing again. The growing number of studies and publications focusing on the role of trust in B2B marketing in leading scientific journals can be observed.The paper is a theoretical in its nature and is based on a review of literature from the field of business relations. The aim of the article is to introduce the concept of trust, its dimensions and dynamics, together with an indication of the research challenges in those areas.

Trust in cross-cultural b2b financial service relationships: The role of shared values

Trust in business-to-business supplier–customer relationships in financial services is an area of considerable research interest. The bulk of prior empirical research in this field has concentrated on trust in business relationships within a Western cultural context. However, shared values are acknowledged to be an important antecedent to trust. The premise of this study is that in circumstances where there are substantial cultural differences between parties to a supplier–customer relationship, these differences will be reflected in shared values, which will in turn be reflected in differences in the nature of trust. A qualitative study was conducted among business bankers and their corporate clients in the context of the United Arab Emirates. In all 170 respondents were interviewed; of these, 160 were paired respondents, that is, where a client and banker from the same business relationship were interviewed (yielding 80 interview dyads). Substantial differences with respect to trust were found between relationships that involved only Emiratis, those that involved Emiratis and non-Emiratis, and those that involved only non-Emiratis. For Emiratis mutual trust is substantially based on family and clan ties and exhibits strongly affective characteristics. For non-Emiratis trust is largely based on business considerations, and exhibits strongly cognitive characteristics.

Inter-personal and inter-organizational trust in business relationships: An attitude–behavior–outcome model

This study contributes to understanding the role of trust in business-to-business relationships at two different levels of operation: the inter-personal and inter-organizational levels. A nomological model was built around an overall framework consisting of three main groups of business relationship characteristics: attitudes, behaviors, and outcomes. Data collected from 331 informants in the UK was used to empirically test the model. Inter-personal trust and inter-organizational trust were found to be two distinct constructs, with the results of a structural equation analysis supporting the overall model that was developed. However, one suggested effect (the negative effect of supplier's opportunistic behavior on relationship-specific investments) was not supported. Potential explanations for this finding are introduced. The research contributions and implications are also discussed.

Trusting and Monitoring Business Partners throughout the Relationship Life Cycle

Purpose: The goal of this research is to understand the theoretical and empirical confluence of multi-dimensional trust with the role of monitoring as business partnerships unfold and evolve dynamically throughout the course of the relationship life cycle. Methodology: A pilot study is run in which in-depth interviews are conducted with managers to glean their insights regarding the theoretical questions and to verify terminology for survey items. A large-scale survey study is then conducted to test hypotheses about the relationships among the focal constructs. The participants in both studies are real procurement professionals reporting on their primary supplier relationships. The qualitative study and the samples of real world managers enhance the external validity of this research. Findings: In early stages of business relationships, monitoring and benevolence trust interact to positively impact business performance. Continued monitoring in later stages interact with benevolence trust to performance detriment. Conversely, monitoring and competence aspects of trust hurt business performance in earlier life stages. Research Implications: Theoretical frameworks that include the constructs of multidimensional trust, monitoring, and relationship life cycle stages can build on the nuanced 3-dimensional contingencies established in this research. In particular, this research furthers the concepts of monitoring and the relationship life cycle. Practical Implications: There is a time and a place to trust one's business partners, and a time and a place to verify their trustworthiness. As business partnerships are forged, monitoring and benevolence trust can be particularly fruitful. Contribution: In this research, the authors build on the business marketing literature that has begun to delineate the benevolence and competence dimensions of trust in business relationships; they demonstrate the role that partner monitoring has in maintaining business commitments; and establish how these effects are modified over the stages of the relationship life cycle; i.e., from exploration, to build-up, maturity, and decline.

The dynamics and evolution of trust in business relationships

Trust is a key dimension in business relationships and has been much studied. But less attention has been given to understanding the dynamics and evolution of trust and the causal mechanisms and processes driving this. We propose a process model of the dynamics and evolution of trust in business relations based on a view of business relations as complex adaptive systems. Trust changes depending on the experience and outcomes of the actions and interactions and other events taking place over time in the focal as well as in connected relations. The psychological, social and economic mechanisms driving these changes in trust are identified. Our model has important implications for generating, sustaining and protecting trust in business relationships and networks and for future research.

Constructing a typology of trust in asymmetrical food business relationships

PurposeThis paper aims to present insights into representations of discursive trust in asymmetrical business‐to‐business relationships in food chains. The purpose is to understand and define the interorganisational trust in business relationships by viewing these inductive findings in light of the relevant literature.Design/methodology/approachDiscourse analysis of interviews with individuals in the food processing industry is used to determine different representations of trust.FindingsThree representations of trust emerged from the interviews. They indicate that trust is a complex and dynamic phenomenon. The representations found were: a key operational element; recognition of context; and relationship resource stemming from individual bonds and personal characters. Trust is associated with control and context in the food industry as well as with a business's size and its customer reputation.Research limitations/implicationsThe implications for food chain participants and other stakeholder groups are discussed to emphasise further the research on trust. However, because the discursive representations are context‐specific, changes in economic, market or relationship power situations can prompt new and different representations.Practical implicationsThis paper provides complementary insights into the challenges that business relationships face in their daily processes. The results can be used to recognise and analyse the dynamic and asymmetrical contexts of business relationships and build the competitive advantages of businesses. Trust can actively be used as a tool to distinguish a business from its competitors.Originality/valueThis research increases understanding of the representations of trust in an asymmetrical food business context and offers some new analytical tools for the current trust research.

Trust and quality management: Perspectives from marketing and organisational learning

In this paper, the concept of trust is elaborated upon and compared with the traditional values of quality management. Trust is approached from the areas of relationship marketing and organisational learning where it is a frequent element. The purpose is to create a framework of trust based on previous research, particularly in the areas of relationship marketing and organisational learning, and to analyse whether trust should be regarded as a core value of quality management. Properties of the concept of trust in quality management, relationship marketing and organisational learning are described. Concerning trust as a quality value, it is found that dissimilarities with the current values make it an unsuitable candidate for inclusion in this group. However, examination of the underlying components of the current values of quality management is encouraged with the conviction that trust will prove to be an important element in this endeavour. A tentative framework based on the two dimensions of aspects of trust and components of the relationship is proposed. This framework broadens the view of trust and its implications for quality management. The proposed framework should be helpful for managers in providing a more structured view of the different aspects of trust in business relationships.

Authentic Trust in Modern Business

The authors analyze the foundations of trust in business relationships and show the importance of trust between business partners as the fundamental basis of any sustainable business. They focus on trust as the foundation of the wealth management relationship and analyze different possible actions that can be taken to establish and build trust in a relationship. But the authors also stress the dangers of using these actions as a technique to increase short-term revenues: Trust is hard to gain in practice but very fragile as well and can easily be lost. The authors demonstrate that even minor trust violations can increase doubt about the relationship and eventually harm future business. Clients increasingly demand trustworthy and authentic business partners that differentiate themselves through their actions from competitors—who may not be interested in building trusting relationships at all or may use trust only as another sales technique. <b>TOPICS:</b>Wealth management, in wealth management

Trust: looking forward and back

PurposeThis paper considers ways forward in the study of trust in business relationships and networks.Design/methodology/approachThe 25 papers focusing on trust previously published in theJournal of Business &amp; Industrial Marketingare categorized as to their focus and compared to the body of work on trust concluding there is little considering the nature of trust. A model that integrates conceptualizations of the past and present and extends these to incorporate nature of trust as affective – including calculation and emotion – is presented.FindingsThis broadened conceptualization of trust contains focused, interacting components enabling both holistic and well as focused study of relationships and the role of trust within them.Research limitations/implicationsAn important direction for business relationship and network research is consideration of thebestway to conceptualize and measure trust. The way that trust components combine and vary in different settings, including in different cultures is also needed in future work. Operationalisations that are both more parsimonious and valid are likely.Practical implicationsUnderstanding as to value of measures of propensity to trust (which this model can guide) has potential value to managers as does an effective measure of generalized trust and understanding as whether this is a first step in relationship trial.Originality/valueThis is first detailed model of the nature of trust in business relationships that has been published in the marketing literature.

Which trust and when? Conceptualizing trust in business relationships based on context and contingency

This is a conceptual paper that sheds light on how trust works by distinguishing 'placed trust' from 'trust as response'. This distinction has implications for management practice and provides directions for future research. The paper reviews, critiques and re-interprets different understandings of trust across several strands of management literature. Trust, as a means of coping with uncertainty by reducing perceived risk, is contrasted with two other options, regulation and opportunism. Trust reduces risk by placing obligations on the trustee to be trustworthy and it is argued that trust is calculating by contrasting it with naiveté. Consideration is then given to its role in creating customer satisfaction, service quality and commitment. The distinction conceptualized between the initiatory act of trusting and the response of trusting enables retail and distribution management to optimize use of trust in the service encounter.

Extending trust and mutual trust in business relationships towards a synchronised trust chain in marketing channels

Although trust is discussed widely in the literature, there are still discrepancies in the existing conceptualisations of the trust concept. These are usually either unidirectional or bi‐directional, and a limited or narrow approach is usually applied or taken into consideration. There is an apparent lack of mutual and simultaneous considerations beyond the dyadic business relationship. It is argued that an approach beyond dyadic business relationships is necessary to truly understand the trust between two actors in a marketing channel. In the first place, the trust in other upstream and downstream dyadic business relationships affects the trust in the dyad at focus. At the same time, the dyadic business relationship at focus is affected by upstream and downstream trust in other dyadic business relationships. Therefore, a generic model of the synchronised trust chain concept is introduced, as well as managerial implications and research proposals in the area.

Trust and Co-operation in Business Relationship Development: Exploring the Influence of National Values

This paper makes an initial exploration of whether and to what extent different national values may affect the development of business relationships between individuals in different countries, by specifically examining the development of trust and co-operation between people. It first identifies key factors that may determine the nature and effect of trust in business relationships. Trust based on calculus, knowledge, and identification are distinguished. Inhibitions to co-operation are also identified, which include the perceptions of economic value, of social returns, of risk, and of competence of the potential co-operating parties. A model of trust formation and its impact on co-operation enabling detailed interpretation of empirical data is presented. Notions of national values developed in previous research are outlined, and a set of formal tabulated propositions regarding how these may be expected to influence different aspects of trust formation in different European countries is developed. The relevance and applicability in understanding different approaches to business development in different countries is then explored. The trust relationships of three matched case companies, one each from France, Holland and the United Kingdom are examined in terms of the propositions detailed, by means of verbal protocol analysis. Marked differences were found between the three individual business leaders, and these largely matched the theoretical propositions generated. Different types of trust relationships were sought and required by the individuals examined, and they each needed different co-operation criteria to be addressed before they would co-operate. This study is only exploratory, and stereotypes need to be avoided, but more concrete propositions can be suggested as to why and how national values influence business to business relationships. National values appear to influence the relative importance placed by individuals in the types of trust they require to co-operate with others, and the criteria they implicitly employ in deciding whether to co-operate or not.