Relational quality: Managing trust in corporate alliances
AbstractThe 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 behaviour 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 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 experience of the parties with each others' behaviours as the alliance unfolds; and 3) the impact that external events or behaviours 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by IESE Business School in its series IESE Research Papers with number D/434.
Length: 22 pages
Date of creation: 12 Mar 2001
Date of revision:
corporate alliances; economic exchanges; monitoring;
Find related papers by JEL classification:
- M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Social Responsibility
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Miguel Rivera-Santos & Carlos Rufín, 2010. "Odd Couples: Understanding the Governance of Firm–NGO Alliances," Journal of Business Ethics, Springer, vol. 94(1), pages 55-70, July.
- Francis Bidault & Alessio Castello, 2008. "Trust and Creativity: Identifying the Role of Trust in Creativity-Oriented Joint-Developments," ESMT Research Working Papers ESMT-08-010, ESMT European School of Management and Technology.
- Susan Gensemer & Kiridaran Kanagaretnam, 2004. "Alliances and cost declaration," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(3), pages 121-136.
- Ranjay Gulati & Maxim Sytch, 2008. "Does familiarity breed trust? Revisiting the antecedents of trust," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 165-190.
- Rose, Timothy & Manley, Karen, 2011. "Motivation toward financial incentive goals on construction projects," Journal of Business Research, Elsevier, vol. 64(7), pages 765-773, July.
- Marc Fréchet, 2007. "Les difficultés relationnelles dans les partenariats d’innovation:une approche par le contrat psychologique," Revue Finance Contrôle Stratégie, revues.org, vol. 10(1), pages 125-148, March.
- Gagalyuk, Taras, 2012. "Goal achievement in supply chain networks: A study of the Ukrainian agri-food business," Studies on the Agricultural and Food Sector in Central and Eastern Europe, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO), volume 64, number 64, February.
- Vlaar, P.W.L. & Bosch, F.A.J. van den & Volberda, H.W., 2006. "On the Evolution of Trust, Distrust, and Formal Coordination and Control in Interorganizational Relationships: Towards an Integrative Framework," Research Paper ERS-2006-035-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Lui, Steven S. & Ngo, Hang-yue & Hon, Alice H.Y., 2006. "Coercive strategy in interfirm cooperation: Mediating roles of interpersonal and interorganizational trust," Journal of Business Research, Elsevier, vol. 59(4), pages 466-474, April.
- Chiara Guardo & Giovanni Valentini, 2007. "Taking Actively Advantage of MNCs’ Presence," Small Business Economics, Springer, vol. 28(1), pages 55-68, January.
- Ludwig Bstieler & Martin Hemmert, 2010. "Trust formation in Korean new product alliances: How important are pre-existing social ties?," Asia Pacific Journal of Management, Springer, vol. 27(2), pages 299-319, June.
- Garnsey, Elizabeth & Lorenzoni, Gianni & Ferriani, Simone, 2008. "Speciation through entrepreneurial spin-off: The Acorn-ARM story," Research Policy, Elsevier, vol. 37(2), pages 210-224, March.
- Ariño, Africa & Ring, Peter S., 2004. "Role of justice theory in explaining alliance negotiations, The," IESE Research Papers D/534, IESE Business School.
- Francis Bidault & Thomas Hildebrand, 2012. "The distribution of partnerships benefits: Evidence from co-authorships in economics journals," ESMT Research Working Papers ESMT-12-08, ESMT European School of Management and Technology.
- Gagalyuk, Taras & Hanf, Jon Henrich, 2010. "Success For The Whole Food Chain: Testing The Model Of Network Success In Ukraine," 50st Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93944, German Association of Agricultural Economists (GEWISOLA).
- Rebecca Guidice & Neal Mero, 2007. "Governing joint ventures: tension among principals’ dominant logic on human motivation and behavior," Journal of Management and Governance, Springer, vol. 11(3), pages 261-283, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvia Jimenez).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.