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Building trust in international alliances

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  • Parkhe, Arvind

Abstract

Two facts stand out unambiguously in today's global business. One, international alliances are proliferating, underscoring the strategic importance managers increasingly attach to "competition through cooperation." Two, trust is key to successful international alliances. Together, these two facts point to the need to better understand trust, a task that was attempted in an earlier article (Parkhe, 1998). Yet such understanding, while necessary, is not sufficient. This article, the second of a two-part series, shows how partners can proactively manage an alliance relationship in order to develop trust. Toward this goal, the discussion includes trust generation through process-based, characteristic-based, and institutional-based mechanisms, which are to a significant degree within alliance managers' control. Managers must also be mindful of several critical features of alliance dynamics. These are described in some detail, as is the need to appropriately "calibrate" trust level in an alliance to the lifecycle stage of the alliance. With proper management attention, too much and too little trust can be avoided.

Suggested Citation

  • Parkhe, Arvind, 1998. "Building trust in international alliances," Journal of World Business, Elsevier, vol. 33(4), pages 417-437, January.
    • Handle: RePEc:eee:worbus:v:33:y:1998:i:4:p:417-437
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    References listed on IDEAS

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    1. Jay B. Barney & Mark H. Hansen, 1994. "Trustworthiness as a Source of Competitive Advantage," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 175-190, December.
    2. Lei, David & Slocum, John W. & Pitts, Robert A., 1997. "Building cooperative advantage: Managing strategic alliances to promote organizational learning," Journal of World Business, Elsevier, vol. 32(3), pages 203-223, October.
    3. Arvind Parkhe, 1991. "Interfirm Diversity, Organizational Learning, and Longevity in Global Strategic Alliances," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(4), pages 579-601, December.
    4. Gary Hamel, 1991. "Competition for competence and interpartner learning within international strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 83-103, June.
    5. Parkhe, Arvind, 1998. "Understanding trust in international alliances," Journal of World Business, Elsevier, vol. 33(3), pages 219-240, October.
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