Session 50

Trust and Relational Governance

Track N

Date: Monday, October 8, 2012


Time: 09:30 – 10:45

Common Ground

Room: Club E


  • Africa Ariño, IESE Business School

Title: How to Gain Trustworthiness in an Asymmetric Relationship: Lessons from Selling Assets


  • Miriam Flickinger, LMU Munich

Abstract: This study uses a qualitative analysis of multiple firms’ asset selling processes to explore and understand how trustworthiness can be demonstrated and therefore gained by an organization. Also, it seeks to gain knowledge on what the benefit of this trustworthiness can be in an asymmetric relationship. I accentuate sellers’ ambitions to manifest themselves as a trustworthy party so that buyers will find this behavior credible and respond to it by giving trust. The results suggest that effective sellers develop interpretive schemes to make sense of the asset for buyers in order to achieve a favorable result of the asset sale for themselves. The study sheds some light on the sources of trust in an asymmetric interorganizational relationship.

Title: Managing R&D Alliances: Individual Relations and their Impact on Performance and Reformation


  • Alba Sanchez Navas, University of Barcelona
  • Martin Rahe, EADA Business School
  • Xavier Ferras Hernandez, ACC10 - Catalonia Competitiveness Agency

Abstract: Our research creates and tests a model to explain the effect of individuals’ relationship on performance, satisfaction and reformation in R&D alliances. Tests of our hypotheses using data on 261 individuals that participate in R&D alliances showed that trust, conflict, commitment and communication are positively related to alliance performance, although trust and communication are the characteristics with the strongest fit. In addition, successful alliances influence positively on individual satisfaction and raise the willingness to reform the alliance with the existing alliance members, which also increases alliance performance due to the experience accumulation of partners involved.

Title: Relational Signaling, Informal Norms and Formalization in Multifirm Projects


  • Marco Furlotti, Tilburg University

Abstract: In response to the dearth of systematic study of interorganizational projects we focus on the use of informal relational norms in this type of interfirm collaboration. We argue that relational signaling theory enables solving certain empirical and theoretical puzzles better than extant accounts of relational governance and that it sheds light on the interdependence between formality and informality. It suggests that due to its signaling value, non-contractual formalization is complementary to informal norms, while contracts, though necessary, serve different objectives and are rather orthogonal to informal governance. Relational signaling also helps predicting the effect of a number of other contingencies. We test our hypotheses on a large sample of multifirm projects, and we find broadly supportive results that are robust to a number of controls.

Title: Should Firms Balance Arm’s Length and Embedded Ties? The Role of Partner Selection Motives


  • Murat Tarakci, Erasmus University Rotterdam

Abstract: Should firms have weak arm’s length or strong embedded ties with their network partners? Network embeddedness theory has so far recommended that firms should have a mix of arm’s length and embedded relationships. The present study introduces firm’s network orientation, i.e. firms’ motives for choosing network partners, as a stable behavioral characteristic of firms. Our results show that recommendation of embeddedness theory holds only for firms selecting their network partners with calculative motives. However, for relationally motivated firms such a strategy is detrimental. This study extends dominant structuralist view of social network theory by considering firms’ behavioral orientation, and contributes to embeddedness theory by reformulating it along the behavioral lines.

Title: The Effects of Trust and Trust Expectations on Satisfaction in International Joint Ventures


  • Gokhan Ertug, Singapore Management University
  • Ben M. Bensaou, INSEAD
  • Ilya Cuypers, Singapore Management University

Abstract: This paper studies the effects of trust and trust expectations on satisfaction in international joint ventures. Consistent with previous literature on trust, we argue that a focal joint venture partner’s trust in the other party will have a positive effect on the focal partner’s satisfaction. However, we also study the effects of the focal partner’s trust expectations in the other party and argue that, controlling for the actual level of trust, these expectations will have a negative effect on the focal partner’s satisfaction. Our empirical support comes from data on 134 international joint ventures operating in Asia.

Title: The Influence of Trust on Alliance Performance: The Mediating Roles of Governance Mechanisms


  • Yang Fan, Erasmus University-Rotterdam

Abstract: we investigate how trust affects alliance performance through formal governance and informal information exchange. Based on a survey of Dutch IT industry, we found that trust has a direct positive impact on alliance performance. This relationship is negatively mediated by formal governance, and positively mediated by informal information exchange. The results suggest under lower levels of trust, firms are more likely to use formal governance mechanisms and less likely to use informal information exchange, which would further dampen alliance performance. It is worthwhile noticing that although trust may compensate for the lack of formal governance (Gulati & Nickerson, 2008), formal governance cannot compensate for the lack of trust on alliance performance. The findings seem to suggest that contracts (or other formal governance mechanisms) are not sufficient to maintain a smooth and productive relationship, with trust being a necessary condition.

All Sessions in Track N...

Sun: 08:00 – 09:15
Session 100: Interdisciplinary Perspectives on Cooperative Strategies
Sun: 09:30 – 10:45
Session 101: Practicing Cooperative Strategies
Sun: 11:15 – 12:30
Session 102: Research Methods in Cooperative Strategies
Sun: 15:15 – 16:30
Session 46: Value Creation and Capture in Alliances
Mon: 08:00 – 09:15
Session 44: Network Contingencies and Alliance Performance
Mon: 09:30 – 10:45
Session 50: Trust and Relational Governance
Mon: 13:30 – 14:45
Session 45: New Perspectives on Alliance Termination
Mon: 16:30 – 17:45
Session 51: Resource- and Knowledge-Based Views of Cooperative Strategies
Tue: 08:00 – 09:15
Session 248: Cooperation and Industry Contingencies
Tue: 11:00 – 12:15
Session 247: Cooperative Strategies
Tue: 14:15 – 15:30
Session 48: Managing Alliance Dynamics
Tue: 15:45 – 17:00
Session 49: Organizational Learning and Alliances
Tue: 17:30 – 18:45
Session 47: Governing and Managing High-Tech Collaborations

Strategic Management Society