Handbook of Research on Competitive Strategy
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Handbook of Research on Competitive Strategy

Edited by Giovanni Battista Dagnino

The Handbook of Research on Competitive Strategy presents a comprehensive state-of-the-art picture of current strategic management issues and demarcates the major investigation strands that are likely to shape the field into the future.
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Chapter 21: The Management of Trust in Competitive Strategy Research: Why it is Important and What is New

Sandro Castaldo and Katia Premazzi


Sandro Castaldo and Katia Premazzi INTRODUCTION This chapter discusses how trust, intended as a fundamental resource, plays an important role in both gaining and sustaining a firm’s competitive advantage in the current networking economy. One of the phenomena that best characterizes markets today is the exponential development of their complexity level, which directly affects the behavior of economic subjects. The most prominent implication is that the network of relationships in which a firm is nested, together with its networking inclination and ability, is crucial for achieving a competitive advantage (Dyer and Singh, 1998; Morgan and Hunt, 1999). Such a relational network constitutes a sort of ‘mine’ to be exploited in order to engender the resources that feed sustainable competitive advantages in current complex markets. These cognitive resources are generally knowledge- and trust-based. Firms that realize the importance of such networks will take steps to actively engage in and create networks with other firms or subjects who are characterized by complementary cognitive resources (Arora and Gambardella, 1994). Two main factors drive this trend: ● ● Knowledge-based factors engendering a ‘science-pushed’ networking trend; Customer-based factors favoring a ‘demand-pulled’ networking trend. As firms are incapable of autonomously managing the increasing level of environmental complexity, they therefore require specialization in the production of knowledge. Hence their need to liaise in networks and integrate complementary competencies and expertise in order to set up the resources required to face tougher competitive contexts. This need represents a knowledge-based (or science-pushed) vector that drives the constitution of networks of subjects...

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