Trust under Pressure

Trust under Pressure

Empirical Investigations of Trust and Trust Building in Uncertain Circumstances

Edited by Katinka Bijlsma-Frankema and Rosalinde Klein Woolthuis

This book challenges the current thinking on trust largely based on studies in stable contexts, by presenting new empirical studies of trust and trust building in a number of less stable, less institutionalized settings. These contexts are gaining in prominence given the globalization and virtualization of organizational relations, development of high velocity markets, and the growing importance of intangible resources.

Chapter 8: Trust as a Market-based Resource: Economic Value, Antecedents and Consequences

Bruno Busacca and Sandro Castaldo

Subjects: business and management, organisation studies

Extract

1 Bruno Busacca and Sandro Castaldo 1. INTRODUCTION Trust has become a relevant subject in management literature since the increasing complexity of technology, consumer behaviour and competition has shown the need for new theoretical approaches, that can take account of the critical importance of intangible resources in the generation of competitive advantages and economic value. The resource-based view (for example Penrose, 1959; Rumelt, 1984; Wernerfelt, 1984; Barney, 1986 and 1991; Itami, 1987; Dierickx and Cool, 1989; Grant, 199l and 1996; Vicari, 1991 and 1992; Amit and Schoemaker, 1993; Peteraf, 1993; Hunt and Morgan, 1995) has shown that these intangibles can be of a different nature. Although there is much debate between scholars about the best way of classifying intangible resources, these are principally of two related types: knowledge and trust. Knowledge refers to the cognitive schemes that a firm possesses internally and that are sufficiently stable to allow the whole business system to function. Trust refers to the cognitive models that relate to subjects outside the firm (for example customers, distributors, suppliers, and financial institutions). Knowledge resources which are contained in the memory of the firm are ‘intellectual’ assets, while trust which is contained in the memories of outside entities, is based on the certainty of behavioural expectations that the firm is able to generate in other subjects (Vicari, 1991; Srivastava et al., 1998). Firms that are committed to the ‘improvement’ of knowledge and trust are best able to make strategic and management choices, and thus continuously generate economic...

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