Chapter 11: Trust Attitudes, Network Tightness and Organizational Survival: An Integrative Framework and Simulation Model
Arjen van Witteloostuijn and Marc van Wegberg Introduction Anecdotal evidence suggests that dynamic high-growth ﬁrms run a large risk of not being able to honor trust. The boom and bust of the dotcoms and the Enron-type scandals provide examples of fast-growing ﬁrms that caused a breakdown of trust. This anecdotal evidence suggests that trust building and high dynamics may be conﬂicting conditions. Fast-growing ﬁrms respond to new opportunities. To this end, they may engage in transactions with new partners. New partners may make promises that are hard for them to honor. Without making promises, they will not be invited into a partnership. Once in the partnership, they may not have the resources or the incentives to make it a success. Lack of trust and lack of trustworthy behavior can be a problem with new partnerships. A ﬁrm that wants to engage in opportunities with new partners may have to take the risk of nontrustworthy behavior. There is a tradeoﬀ between building trust and participating in a dynamic setting. To realize its goals, an organization tends to need resources from other organizations. This can lead to a state of dependence which the resource-providing organization can opportunistically exploit. Opportunism diminishes the value of the cooperation, and may prevent cooperation where that would be optimal (Roy Chowdhury and Roy Chowdhury, 2001). If the partners in cooperation trust each other, they may be able to overcome the problems of opportunism. Trust can be deﬁned as an expectation held by one trading partner...
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