Roles played by relational trust in strategic alliances (original) (raw)
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Relational quality: A dynamic framework for assessing the role of trust in strategic alliances
1999
The organizational literature has always posited that "trust" plays a key role in economic exchanges, particularly when one or another party is subject to the risk of opportunistic behavior, incomplete monitoring, or when moral hazard problems arise. These conditions are almost always present in the case of alliances and joint ventures between independent parties. This paper explores the concept of "relational quality" in one such interorganizational form -dyadic alliances -where past experience and the shadow of the future play an important role. Relational quality is important, as it affects the extent to which partners substitute reliance on trust for more formal control mechanisms. Building on theory, case studies and survey data, we develop a framework for thinking about trust in dynamic and practical terms. We define three elements affecting relational quality in alliances: the initial conditions surrounding the exchange, the cumulative experiences of the parties with each other's behaviors as they interact, and the impact that external events have on perceptions of behavior and attitudes of the parties about each other's trustworthiness. We use data on a sample of alliances with one Spanish partner to explore the relative impact of these elements and develop a more precise set of propositions from this framework. The paper should guide further work towards quantifying the role of trust as a control mechanism in the performance of strategic alliances. issues related to inter-organizational collaboration and trust currently dominate much of the management literature. The five volumes just mentioned are being followed by this issue of Organization Studies on trust, and a special issue of the Strategic Management Journal on strategic networks. These comprehensive collections of conceptual and empirical research on these two topics build on an impressive foundation of economic and behavioral studies laid during the last ten years (1). Furthermore, the international business literature goes back even further in its examination of the role and durability of joint venture structures (2).
Relational quality: Managing trust in corporate alliances
2001
The management literature has often argued that "trust" plays a key role in economic exchanges, particularly when one or another party is subject to the risk of opportunistic behavior and incomplete monitoring, or when problems due to moral hazard or asymmetric information arise. These conditions are almost always present in the case of corporate alliances and joint ventures. We propose that one aspect of trust, what we call "relational quality," is fundamental to the maintenance of good working conditions in two-party alliances where past experience and the shadow of the future play important roles. Relying on a growing body of theory and a number of case studies, we develop a framework for thinking about trust in dynamic and practical terms. We conclude that a reservoir of relational quality exists in any such relationship, and that the level of trust implied in such a reservoir will not only influence whether and how future conflicts are resolved, but also is in itself affected by the positive (or negative) resolution of such conflicts. Finally, we identify three elements that contribute to the relational quality reservoir in alliances: 1) the initial conditions surrounding the alliance formation; 2) the cumulative experiences of the parties with each other's behaviors as the alliance unfolds; and 3) the impact that external events or behaviors outside the alliance's context have on the perceptions and attitudes the parties have about each other's trustworthiness. We conclude with some recommendations for more effective management of corporate alliances.
Sources of alliance partner trustworthiness: Integrating calculative and relational perspectives
Strategic Management Journal, 2013
Research on the sources of organizational trustworthiness remains bifurcated. Some scholars have adopted a calculative perspective, stressing the primacy of actors' rational calculations, while others have approached trustworthiness from a relational perspective, focusing on its social underpinnings. We help to reconcile these seemingly disparate views by adopting an integrative approach that allows us to clarify the boundaries of both perspectives. Based on dyadic survey data from 171 strategic alliances, we find that the calculative perspective (represented by contractual safeguards) has higher predictive power when the partner lacks a favorable reputation. In contrast, the relational perspective (represented by organizational culture) predicts trustworthiness more strongly when familiarity with the partner organization is high.
Empirical test of the trust–performance link in an international alliances context
International Business Review, 2012
Despite the widespread use of trust as a determinant of successful relationships, limited empirical evidence exists to substantiate a positive relationship between trust and performance. Thus, the purpose of this study is to investigate the antecedents of trust and to examine the trust-performance relationship in international alliances. The conceptual model was tested empirically using primary data collected from 232 international alliances involving Portuguese and international firms. The results reported suggest that when controlling for the experience and size of a firm, trust has a strong and positive effect on performance. Key antecedents identified as significant influencers on trust are shared values, communication and opportunistic behaviour. Additionally, interaction effects are identified, indicating that similarities among partners enhance the positive relationship between trust and performance.
The importance of International Business (IB) Systems and in particular International Joint Ventures (IJVs) has increased in recent years. Great numbers of enterprises worldwide form International Strategic Alliances (ISAs) and IJVs in order to expand internationally and gain global competitiveness. One of the most important factors that affect the success of IJVs is the notion of trust between alliance partners, as evidenced by the growing volume of published research on the subject. The objective of this paper is to present a number of propositions on the contextual factors that have an impact on trust at the initial stages of the formation of an IJV and constitutes the basis for future research where we plan to examine the importance of trust in International Joint Ventures (IJVs) that include at least one Greek business partner.
Success through commitment and trust: the soft side of strategic alliance management
Journal of World Business, 2000
This article argues that the success of international strategic alliances requires attention not only to the hard side of alliance management (e.g., financial issues and other operational issues) but, also, to the soft side. The soft side refers to the development and management of relationship capital in the alliance. Relationship capital consists of the socio-psychological aspects of the alliance that are positive and beneficial to the alliance. Two important areas of relationship capital are mutual trust and commitment. Based on our findings from two major studies of Japanese strategic alliances, we develop a dynamic model of trust and commitment based on mutual adjustments of alliance partners. We also show how the dynamics of trust and commitment affect the performance of international strategic alliances with the Japanese. The article concludes with a discussion of the managerial implications of our findings and the dynamic model.
Industrial Marketing Management, 2005
Organizations are using strategic alliances to develop competitive advantages in quality, innovation, and cost. To capture the potential synergies of these alliances requires that the partners develop long-term relationships. This study develops a model of strategic alliance relationship development based on the theory of cooperative and competitive goal interdependence. Thirty pairs of supplier and customer organizations in Xian, China participated in a survey where the supplier indicated the commitment and goal interdependence and the customer rated the relationship's long-term orientation. Results suggest that the commitment by both supplier and customer organizations to quality develop cooperative interdependence, which leads to effective strategic partnerships.
WHEN DOES TRUST MATTER TO ALLIANCE PERFORMANCE
2006
We examine how uncertainty moderates the trust-performance relationship in alliances, building on the distinction between behavioral uncertainty, which relates to anticipating and understanding partners' actions, and externally caused environmental uncertainty. We argue that trust matters more to performance under behavioral uncertainty and less under environmental uncertainty. In data from 126 international alliances, the positive relationship between trust and performance is stronger under high behavioral uncertainty and weaker under high environmental uncertainty. We conclude that partners should concentrate on developing interorganizational trust where potential improvement in alliance performance justifies this effort, which in turn depends on the type of uncertainty faced.