Trust in Market Relationships

Trust in Market Relationships

Sandro Castaldo

Trust in Market Relationships illustrates that the importance of trust in a commercial arena has intensified as markets have become more complex. As business relationships become ever critical for a firm’s economic results in highly competitive markets, and trust represents the basic platform for the development of successful long-term collaborations.

Chapter 2: The Value of Trust

Sandro Castaldo

Subjects: business and management, marketing, organisation studies


INTRODUCTION The previous chapter highlighted the critical role of relationships and networks in enabling firms to cope with increasing environmental complexities and achieve a sustainable competitive advantage. Yet, in order to define the actual scope of the reticular or relational approach, it is useful to assess its impact on the capability of gaining a competitive advantage and generating economic value. Such an approach will prove to be sustainable whenever the firm is capable, by means of an innovative managerial strategy, of producing value – be it considered as an accumulation of intangibles or as an effect generated at the economic level. This chapter aims at demonstrating, synthetically, how firms, by gaining trust, can succeed in expanding and enhancing both their immaterial assets and economic value. Thus, according to the recent evolution of the resource-based view, this chapter will initially examine the impact of firm relationships – and in particular trust – on intangible assets (section 2). Some typologies of trust-based relational resources will be highlighted, to the extent to which they integrate and strengthen the traditional interpretative apparatus of intangible resources based on the firm’s internal competencies (section 3). Subsequently, the impact trust has on the firm’s management processes (section 4) and its economic performance (section 5) will be briefly analysed. The latter effect lends itself to a twofold interpretation. Firstly, trust can be seen as a vector capable of stabilizing relations with the demand and, consequently, increasing the firm’s customer portfolio value (section 5.1). Secondly, on a more...

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