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The role of trust and contract in the supply of business advice

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  • Robert J. Bennett
  • Paul J. A. Robson

Abstract

The use of legal contract and personal trust are compared in this paper for the relationships between clients and their different advisers who supply business advice. Personal trust between client and adviser is found to operate as an exclusive means to manage relational exchange only for social and family relationships. Using a sample survey of small and medium sized enterprises, results demonstrate that trust and legal contract are most commonly overlapping categories. Comparing different types of adviser, the level of trust, extent of legal contract, service intensity, service costs and client impact and satisfaction are each found to interact. There are major differences between suppliers, but except in the case of social and family relationships to advisers, higher reliance on trust alone is generally associated with lower levels of client impact and satisfaction received. The combination of trust with contract tends to be the route which is most associated with higher levels of client impact and satisfaction. Copyright 2004, Oxford University Press.

Suggested Citation

  • Robert J. Bennett & Paul J. A. Robson, 2004. "The role of trust and contract in the supply of business advice," Cambridge Journal of Economics, Oxford University Press, vol. 28(4), pages 471-488, July.
  • Handle: RePEc:oup:cambje:v:28:y:2004:i:4:p:471-488
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    File URL: http://hdl.handle.net/10.1093/cje/beh021
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    Cited by:

    1. Bennett Robert J., 2016. "Management adaptation of business association services: long-term stability 1783-2012 and ‘change points’ for Irish chambers of commerce," The Irish Journal of Management, De Gruyter Open, vol. 35(1), pages 58-73, April.
    2. repec:eee:accfor:v:36:y:2012:i:1:p:38-50 is not listed on IDEAS
    3. Paola Valbonesi & Federico Biagi, 2016. "Incentivising Innovation and Adoption of ICT: ICT Innovation Voucher Programmes," JRC Working Papers JRC104057, Joint Research Centre (Seville site).
    4. Nick Williams & Colin C. Williams, 2012. "Evaluating the socio-spatial contingency of entrepreneurial motivations: A case study of English deprived urban neighbourhoods," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 24(7-8), pages 661-684, September.
    5. Praxmarer-Carus, Sandra, 2014. "Why the proposal of a complex contract may harm or foster a partner's trust," Journal of Business Research, Elsevier, vol. 67(7), pages 1421-1429.
    6. Capelleras, Joan-Lluis & Mole, Kevin F., 2012. "How ‘buzz’ reduces uncertainty for new firm founders," MPRA Paper 38170, University Library of Munich, Germany.
    7. Huo, Baofeng & Ye, Yuxiao & Zhao, Xiande, 2015. "The impacts of trust and contracts on opportunism in the 3PL industry: The moderating role of demand uncertainty," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 160-170.
    8. repec:enr:rpaper:0009 is not listed on IDEAS

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