Trust under Pressure
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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.
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Chapter 3: Formation of Trust in German–Mexican Business Relations

Torsten M. Ku_hlmann

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3. Formation of trust in German– Mexican business relations1 Torsten M. Kühlmann INTRODUCTION Since the 1980s, cross-border business cooperation has gained momentum as a third form of internationalization besides direct exports and the acquisition or foundation of foreign subsidiaries (Contractor and Lorange 1988). Over the years different forms of international cooperative arrangements have been established, such as strategic alliance, joint venture, contractual production, licensing or marketing partnership. In particular this trend is sustained by small and medium-sized companies (SMEs) that try to compensate for their disadvantage of scarce resources (for example finance, know-how, management capacity) by employing cooperation strategies in their efforts for internationalization (Weber and Kabst 2000). Yet cooperative interfirm relationships which cross national borders are difficult to manage and tend to show high failure rates. In order to explain the widespread break-up of international business cooperation, management scholars have repeatedly argued that mutual trust is of paramount importance for cross-border collaboration to be successful (Aulakh et al. 1996; Ariño et al. 2001; Child 2001; Currall and Inkpen 2002; Sako 1998). The importance of trust stems from the interdependence of cooperating partners and the behavioural uncertainty inherent in any cooperation (Seifert 2001). Interdependence is characteristic for a cooperation because the goals of one partner can only be obtained depending on the cooperating partner’s choice of means, which takes the interests of both parties into consideration. Cooperating partners depend on the longstanding existence of the collaboration, because they make transaction-specific investments that only pay off...

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