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Trust Dimensions in the Business Relationship

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Abstract

In recent years, the aspect of trust in the context of inter-organizational relationship has deserved an increased attention from foreign scientists. The importance of investigation has been shown by a growing number of publications on the role of trust in international relations. The interest in this field of study, on the one hand, was determined by the changes in the business environment. The abundance of information, the appearance of network organizations, dynamics of environment conditions and the need for innovations lead the companies to a greater or smaller trust in business partners. Another reason lies in the positive effect of trust for successful interorganizational relationship. The trust in an organization also means trust in its people working in this organization. It affects the fact that the assesment of trust in business partners can be related to the highlighting of the aspects of psychology as well as behavior of the individuals. On the other hand, this evaluation may be related to the identification of the trust evaluation criteria (both in the level of individuals and organizations) and determination of the reasons of trust formation.
ISSN 1822-8011 (print)
ISSN 1822-8038 (online)
INTELEKTINĖ EKONOMIKA
INTELLECTUAL ECONOMICS
2013, Vol. 7, No. 4(18), p. 497–509
TRUST DIMENSIONS IN THE BUSINESS RELATIONSHIP
Eglė KAZLAUSKIENĖ
Mykolas Romeris University
Ateities str. 20, LT-08303 Vilnius, Lithuania
E-mail: egle.kazlauskiene@mruni.eu
Ilona BARTUŠEVIČIENĖ
Mykolas Romeris University
Ateities str. 20, LT-08303 Vilnius, Lithuania
E-mail: ilona.bartuseviciene@mruni.eu
doi:10.13165/IE-13-7-4-08
Abstract. In recent years, the aspect of trust in the context of inter-organizational re-
lationship has deserved an increased attention from foreign scientists. e importance of
investigation has been shown by a growing number of publications on the role of trust in
international relations. e interest in this eld of study, on the one hand, was determined
by the changes in the business environment. e abundance of information, the appearance
of network organizations, dynamics of environment conditions and the need for innovations
lead the companies to a greater or smaller trust in business partners. Another reason lies in
the positive eect of trust for successful interorganizational relationship. e trust in an or-
ganization also means trust in its people working in this organization. It aects the fact that
the assesment of trust in business partners can be related to the highlighting of the aspects of
psychology as well as behavior of the individuals. On the other hand, this evaluation may be
related to the identication of the trust evaluation criteria (both in the level of individuals and
organizations) and determination of the reasons of trust formation.
JEL classication: M21, D23, L14.
Keywords: trust, business relationship, trust levels and forms, reasons for trust forma-
tion, trust criteria.
Reikšminiai žodiai: pasitikėjimas, verslo santykiai, pasitikėjimo lygmenys ir formos,
pasitikėjimo formavimosi priežastys, pasitikėjimo kriterijai.
Introduction
Recently, trust dimension within business relationship context has attracted an in-
creased attention of foreign scholars. e interest in this research subject has been main-
ly impacted by the changes in the business environment. e abundance of information,
498 Eglė KAZLAUSKIENĖ, Ilona BARTUŠEVIČIENĖ
dynamics in the environmental conditions and the need for innovation make companies
more or less rely on business partners. According to Zanini and Musante (2013), trust
relationships have become a highly desirable property not only as informal coordination
mechanism, but also as a competitive advantage in the new business environment.
Another reason lies within the positive impact of the trust while creating and de-
veloping high performance, valuable inter-relationships among dierent businesses. e
trust enhances the eectiveness of the business functioning and remains the main condi-
tion for any kind of relationship creation and development, including inter-relationships
among business partners.
e assessment of business partner’s trust is a complex objective. Trust in the or-
ganization equals trust in the sta, performing in the organization, which leads to the
formulation of the scientic problem – what is the composition of the trust dimension
within an individual as well as organizational level?
e objectives of this article are the following: 1) to reveal theoretical aspects of the
trust formation in the business relationship, exploring the concepts of the trust, its forms
and levels; 2) to identify the reasons for trust formation within business relationship; 3)
to exclude the criteria/components for the trust assessment, presenting the empirical
research results.
1. eoretical aspects of the trust formation in the business
relationship
e aspects of trust formation among business partners. Recently, scholars have
been enhancing their focus on the trust concept, which is highly valued within business
relationship creation and development. e importance of the trust can be explained
as a key ingredient, contributing to interpersonal relations, internal company relation-
ships and inter-organizational relationship building. Forming business relationship, each
organization in the market is free to choose partners. In order to nd external sources
of supply and product marketing opportunities, an organization has to cooperate with
other companies and start building the networks.
On the one hand, network based relationship establishment and development re-
quire a long period of time, eort and nancial recourses, which, in case there is a need
to change a business partner, is not easily and quickly accomplished, due to the trans-
actional cost. On the other hand, business relationship is formed between partners in
the ongoing process of resource exchange. Single exchanges are an integral part of the
organizations relationship formation, when partners, in the adaptation process, start
gradually building mutual trust.
It is important to stress the fact that incomplete or distorted information presenta-
tion can occur while being in the development of business relationship adaptation pro-
cess. Such opportunistic behavior occurs when one organization nds the opportunity
to maximize its own prots at the expense of mutual relations. is may lead to a lack of
condence and reciprocal behavior. Mutual trust in business is rarely formed spontane-
ously; rather, it arises from the experience gained over a long period of interaction with
499
Trust Dimensions in the Business Relationship
a business partner. Trust is dynamic, where the outcome and the reasons depend on the
partner’s mutual understanding of business relationships. is is one of the outcomes or
the results of the business inter-relationship process formation.
Trust concept, forms and levels
Trust in business relationships can be examined from dierent perspectives and
within dissimilar context, it includes non-violent action and the voluntary binding diver-
sity; according to it, partners help each other, provide information and support in other
ways of mutual cooperation. According to Lane (2000), trust is the belief or expecta-
tion that potential loss, which can occur due to the cooperation risk, will not become a
benet for another organization. Expectations can be directed to the value of standards.
ese expectations may be calculative, value or norm based, or based on common cog-
nitions (Batt, 2003). According to Vollan (2011), trust consists of expectation having a
positive inuence on the social actor and is formulated under conditions of uncertainty.
In other words, one can talk of trust in a situation, where an actor is not sure of what
the other will do, but has good reasons to be condent that the latter will conform to
his or her own expectations (Tejpal, Garg and Sachdeva, 2013). McKnight and Webster
(2001) distinguished between these levels of trust: individual, interpersonal/intergroup
and institutional/cultural (Martins, 2002). Payan (2006) focused also on interpersonal
and interrm trust.
According to Wehmeyer and Riemer (2007), trust is oen seen as a psychological
state; therefore, only individuals can share the trust. is argument is supported by uy
and Quang (2005), they argue that trust between organizations is oen understood as
the existence of trust between individuals from dierent organizations. at is to say, co-
operation between organizations oen form close personal relationships among the re-
presentatives of these organizations, thus forming interpersonal trust level. Nevertheless,
the trust formed at the interpersonal level does not reect the trust that exists between
the business partners. According to Ambrose and Fyne (2005), inter-organizational trust
can be understood in two ways: as a trust, when a representative of the organization
trusts another representative from a dierent organization, or a trust, where a repre-
sentative of the organization has a trust in another organization as a whole.
ere is no solid opinion regarding trust dimension levels, although it is important
to emphasize that business trust relies on the trust of the individuals; therefore, human
personal qualities, their ability to participate in the business relationship development
process have a severe impact on the overall trust.
According to Tejpal, Garg and Sachdeva (2013), trust can be identied in dierent
forms:
Characteristic trust. Characteristic perspective of trust deals with factors, such
as perceptions, reliability, dependability, credibility, commitment, honesty, be-
nevolence, fairness, goodwill, emotions, etc.
Rational trust deals with factors, such as economics of relationship, dynamic
capabilities of partners and technology adoption.
Institutional trust deals with factors, such as control mechanisms between mem-
bers through legal frameworks, commercial law, contracts, agreements, bank
guarantees and insurance (Child and Mollering, 2003).
500 Eglė KAZLAUSKIENĖ, Ilona BARTUŠEVIČIENĖ
Anticipatory trust is the kind of trust, in which someone trusts the other, since
one expects him or her to act routinely. It is the normal pattern of behavior that
forms the foundation for trust. e main element in the (implicit) decision to
trust is the analogy between the present case and former cases, in which the
other has acted in a trustworthy way.
Responsive trust. e main vulnerability of responsive trust is that presupposed
shared moral values do not necessarily lead to trust.
Calculus-based trust and identication-based trust. Calculus-based trust (CBT)
and identication-based trust (IBT) are dierent. In CBT, which is most oen
related to the workplace, people tend to operate on a reward punishment system
(Lewicki and Wietho, 2000). e value in completing a task or a goal is not
seen as personal satisfaction, but rather because of the consequences of doing
so. In CBT, trust is built slowly. (Tejpal, Garg and Sachdeva, 2013).
Zucker (1986) describes trust between organizations in context of process-based
trust, characteristic-based and institutional-based trust:
1. Process-based trust is derived from a social system of mutual obligations, where
each partner has clear expectations of the other’s behavior.
2. Characteristic-based trust is tied to specic individuals, where various demo-
graphic features serve as indicators of membership to a common cultural system
with shared expectations.
3. Institutional-based trust rests both on the membership in subculture, within
which clearly delineated expectations are held, and from various intermediary
mechanisms that the trustee undertakes to protect the interest of both partners.
(Batt, 2003).
Trust is described as interpersonal and impersonal. Interpersonal trust is some-
thing, which is essentially personal, relational and which exists between two parties,
a trustor and a trustee (Husted, 1998). It can only be granted by, and gained from, in-
dividuals, whether singly or as part of a wider group. It involves emotions and values
and it evolves from our experience of working with others. Trust requires not only the
condence that another shares, the commitment, but the belief that he or she will not
take any actions which would be harmful to the interests and, further, that he or she
will proactively seek to protect the position, thus reducing vulnerability (Skinner and
Spira, 2003).
Sako (1992) nds it necessary to dierentiate between contractual trust, compe-
tence trust and goodwill trust:
1. Contractual trust rests on the moral norm of honesty and keeping promises.
2. Competence trust is based on the expectation that the trading partner will per-
form its role competently.
3. Goodwill trust is described as willingness of the exchange partner to do more
than expected (Batt, 2003).
is expectation of trust is conrmed when parties (1) demonstrate reliability by
carrying out their promises, (2) act fairly when dealing with each other, and (3) exhibit
goodwill when unforeseen contingencies arise.
501
Trust Dimensions in the Business Relationship
In analyzing trust, some authors emphasize its psychological aspect (Rousseau,
Sitkin, Burt and Camerer, 1998), while others point to the behavioral one (McAllister,
1995). Sarkar, Cavusgil and Evirgen (1997) emphasize the importance of both of these
aspects. e psychological state point of view denes trust in terms of interrelated cog-
nitive processes and orientations towards beliefs or positive expectations in relation to
others. Some denitions apply to contexts, where these others are identiable, such as
in Rousseau, Stikin, Burt and Carmerer, “trust is a psychological state comprising the
intention to accept vulnerability based upon positive expectations of the intentions or
behavior of another”. In other denitions, trust is presented as a more general attitude
or expectancy about other people or about the general social system. Common to these
denitions is the reference to states of “vulnerability”, “condence, and “positive expec-
tations” (Janowicz and Noorderhaven, 2002).
Trust as a choice of behavior can be seen as the willingness to take risks by acting on
the basis of words, actions or decisions of others. In some denitions, trust is viewed as
a more or less rational decision, motivated primarily by perception of risks, concerning
either the probability of successful cooperation or the possibility of transaction cost-
reduction. More recent denitions argue the need to conceptualize trust not only as cal-
culative orientation towards risk, but also as a social orientation toward other people
and societies as a whole. As recent research has demonstrated, one does not only ‘think’,
but also ‘feels’ trust. roughout research, various behaviors have appeared indicative of
trust, such as cooperative behaviors including open communication, acceptance of inu-
ence, forbearance from opportunism, and lack of monitoring.
Although dierent, trust as a psychological state and trust as a choice of behaviors
are in principle compatible approaches (Costa, 2004).
According to Nooteboom (2001), it is crucial to identify the dierences between
dierent behavior aspects, which are competencies and intentions. Some individuals as-
sess the trust through competence plane, others – through intentions. In other words,
individuals have dierent behavioral aspects in mind when assessing the trust. Some
trust the competency, some – intentions, and there are those, whose realizations of the
trust can be inuenced by both behavioral aspects. As the literature review ndings re-
vealed, trust dimension denition is quite a complicated matter; therefore, it is benecial
to involve psychological, behavior, competency and intention trust in the research.
Trust dimension can be seen as a dynamic, ever-changing, depending on the in-
teraction of various factors, a specic situation or a certain context, examined by the
authors. All of these factors can aect the formation of trust in business relationships,
since aer all the trust is temporary.
e reasons of the trust formation. Trust is central to a successful relationship, be-
cause it encourages working at preserving relationship investments by cooperating with
exchange partners, resisting attractive short-term alternatives in favor of the expected
long-term benets and viewing potentially high-risk options as being prudent because of
the belief that their partners will not act opportunistically (Mukherjee and Nath, 2003).
Dierent reasons why organizations are trying to form a trust can be excluded, but
the most important reason is that trust is essential for a strong and successful collabora-
tion between business partners, since:
502 Eglė KAZLAUSKIENĖ, Ilona BARTUŠEVIČIENĖ
the trust reduces the need for control and has a direct impact on the eective-
ness of the control methods;
the trust encourages organizations to commit;
the trust helps to reduce the perceived risk and the perceived relations between
operational risks and helps to bear;
the trust helps to resolve conicts and promote tolerance among organizations;
the trust promotes the sharing of information and knowledge among organizations;
the trust encourages inter-organizational innovation adoption.
One of the reasons to form the trust is striving to minimize the control or make it
more ecient. Scientists have dierent point of view regarding the interaction between
trust and control. According to Vourenmaa (2006), the trust is a control mechanism,
where trust and control act as substitutes; in addition, condence and control comple-
ment each other. However, Das and Teng (2001) argue that trust can partialy replace
the extent of the control, since a higher degree of trust reduces the need for control and
condence drop increases the need for control. us, according to Mohr (2003), there is
a negative correlation between trust and control: trust reduces the need for control and
strong control leads to a decrease in condence.
According to Knights, Noble, Vurdubakis and Willmott (2001), trust and control
can act as substitutes for one another, because both trust and control are related by the
desire to reduce uncertainty and increase the predictability of the business partner’s be-
havior (Vlaar, 2006).
Organization strives for a higher level of mutual trust in order to reduce the need
for control, for several reasons. First, greater control requires more eort, cost and time.
In addition, according to Beck and Kieser (2003), a very high level of control and co-
ordination can be harmful to the organizations activities (Vlaar, Bosch and Volberda,
2006). According to Ring and Van de Ven (1994), excessive control leads to conicts
and disagreements between business partners (Vlaar, Bosch and Volberda, 2006).
Consequently, over-control is more harmful than helpful; therefore, control reduction,
due to the trust increase, might solve the issues associated with the excessive control.
According to Das and Teng (2001), trust has the impact on the eectiveness of the con-
trol methods. Also, control and monitoring implementation of the organizations require
a certain level of condence. Trust increases the eectiveness of the control, since it re-
duces the level of resistance and brings harmony between the controller and the one, who
is controlled. In addition, trust reduces the possibility of retaliation because partners,
who share the trust, are more likely to develop mutual understanding and tolerance.
Based on Vuorenmaa (2006), trust is seen as particularly necessary for the implementa-
tion of eective control, even under circumstances where there is a possibility to apply
strict controls, as stringent controls do not provide positive results if there is no trust
between the partners. In addition, according to Das and Teng (2001), trust can be in-
termediary between the control mechanism and achieved control level. In other words,
in order to achieve an eective level of control, it requires a certain level of trust other-
wise the control cannot be justied. As the ndings revealed, an eective control can be
achieved only if there is a minimal trust between partners.
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Trust Dimensions in the Business Relationship
According to Krishnan and Martin (2006), trust is particularly important when or-
ganizations strive for an open and strong commitment towards each other. Goo and Nam
(2007) admit that trust has a positive impact on the commitment, which is necessary
for organizations’ inner-relationship. Moreover, according to Hakansson and Snehota
(1995) and Morgan and Hunt (1994), trust is a precursor of commitment because it is
based on experience and knowledge of the business partners’ behavior; therefore, the
trust leads towards the thoughts about the future, and eventually, partners engage in the
commitment (Cater, 2006).
According to Das and Teng (2001), trust lowers the level of risk and contributes
towards its assumption. Trust can impact the realization of the subjective risk, but has no
impact on the objective, a factual one. e critical dierence between risk and perceived
risk needs to be noted. Risk (or objective risk) is based on the consequences or outcomes
of alternatives and their probabilities. Risk can be objective because it is something in-
herent in given situations. In many cases, such as lottery and card games, risk can be
objectively calculated, based on known possible outcomes and their probabilities. On
the other hand, perceived risk (or subjective risk) is decision makers’ estimate of objec-
tive risk (Dowling, 1986; Fischho, 1985). Decision makers, thus, may have dierent
estimates about the level of risk in a given situation.
While trust reduces perceived risk, it may not reduce actual risk inherent in the
relationship. Because trust is a state of mind rather than an action, it does not do any-
thing about objective risk in a relationship. Nevertheless, as a positive expectation about
others, trust does lead to a perception of lowered risk in a relationship. In this sense, it is
maintained that perceived risk is reduced (or lowered) by the presence of trust. Besides,
if trust leads to behavioral reliance on the trustee, then the trustor voluntarily becomes
vulnerable to the actions of the trustee (Mayer et al., 1995). is may actually increase the
risk to the trustor. Similarly, control does not always reduce objective risk, as it may be
only an ‘illusion of control’. Besides, rms may opt for control that is excessive (Garnsey
and Wilkinson, 1994), precluding increased productivity that may accrue if a degree of
autonomy is granted in alliances. Accordingly, risk, as used in this article, refers to sub-
jective or perceived risk rather than objective risk (Das and Teng, 2001).
When there is neither trust, nor prior experience, organizations can take other
steps to reduce the perceived risk, but in some situations, a business relationship be-
tween the participant’s risk reductions could mean another increase in risk. Knowledge
of the business partner is accumulated over a period of time, both in direct contact and
indirectly getting information from independent third parties. Where there is doubt
touching freight exchange, the partners try to use tactics to minimize the perceived risk
by looking into various suppliers and engaging into activity with a well-known supplier,
with whom they have worked in the past. Usually, partners are strongly attracted to those
participants, who are less risky. Organizations are more likely to sell or buy from those
suplliers, with whom they have had contact in the past. Changing the partner could lead
into to high conversion costs, since the process of building the trust is usually associated
with nancial recources, as well.
According to Krishnan and Martin (2006), partners, who share the trust, are more
tolerant to each other’s unusual behavior, which is explained by the need to maintain the
504 Eglė KAZLAUSKIENĖ, Ilona BARTUŠEVIČIENĖ
stability of the relationship. Overall, the trust contributes towards conict mitigation and
tolerance increment within the partnership. Lane (2000) agrees that trust has the impact
on the inter-organizational tolerance increase and also facilitates the solution of the con-
ict (uy and Quang, 2005).
Ellonen, Blomqvist and Puumalainen (2008) emphasize the fact that trust has the
impact on partners’ willingness to share the knowledge and information. It could be
concluded from these various research results that there is a substantial support for the
assumption that high levels of trust have a positive eect on the eectiveness and quality
of organizational knowledge sharing and innovation. Trust helps to curb the motivation
of the partners to behave opportunistically and allows making the organizational inter-
face more leakage-proof (Kale et al., 2000; Janowicz and Noorderhaven, 2002). If one
party trusts the other, it perceives less risk in divulging relevant, comprehensive, accu-
rate and timely or proprietary information to the other (Chiles and MacMackin, 1996).
In contractual relationships lacking in trust, on the other hand, information exchanged
may be inaccurate, incomprehensive and untimely (Janowicz and Noorderhaven, 2002).
Trust will be critical if two situational factors are present: risk and incomplete informa-
tion (Hawes, 1989). Since most transactions present some degree of risk and uncertainty,
trust acts as an information resource rather than reduces the perceived threat of informa-
tion asymmetry and performance ambiguity. Trust enables exchange partners to adopt
schemas, which leave them free to act without trying to process more information than
they are capable of handling (Tomkins, 2001), or where they are unable to acquire suf-
cient information about future events (Batt, 2003).
Trust enables innovation adoption in the organization. According to Ellonen,
Blomqvist and Puumalainen (2008), a high level of trust has a positive impact on creating
favorable conditions for innovation, since it lowers the perception of partners’ possible
opportunistic behavior and also promotes an open communication, commitment and
willingness to share knowledge and information.
It can be argued that trust dimension denes business partners’ need to minimize
the control, increase the degree of mutual commitment, increase the dissemination of
knowledge and information, promotes innovation, and therefore, identication and ex-
pression of these reasons could be one of the objectives in the trust assessment case.
2. Empirical and methodological aspects of trust assessment
In order to highlight the methodological aspects of trust evaluation, it is important
to understand what are the main characteristics or conditions, which dene the trust,
what are trust evaluation criteria. ere is plethora of trust components dened in the
scientic literature; therefore, it is quite complicated to identify the most important ones.
Trust evaluation criteria/componnets. According to Martins (2002), trust criteria
could be the following: integrity, competence, vulnerability, reliability, expectations. Mayer
et al. (1995) distinguish between these components: ability trust, benevolence trust, integ-
rity trust (Wietho and Lewicki, 2005). Moorman (1993) reveals trust concept using these
components: perceived expertise, sincerity, integrity, tactfulness, timeliness, condential-
505
Trust Dimensions in the Business Relationship
ity. erefore, Mayer argues that trust components are best identied using these criteria:
ability, benevolence, integrity (Batt, 2003). Unambiguously, the authors use these trust con-
ditions, which could assess the trust among business partners. Unfortunately, until today,
there has been no solid systematic measuring system, although aer expiration of various
opinions and views regarding trust denition, the following criteria/components are being
distinguished as having the most impact on the trust within business partners:
Competence/ability;
Foresight/perceptiveness;
Honesty/promise keeping;
Reputation/image;
Goodwill/altruism;
Trust/openness;
Tolerance, respect, tactfulness.
Trust evaluation criteria are closely associated, intertwined and, in some cases, dif-
ferent literature sources duplicate one another. Reliability in both aspects, business part-
ner representatives (individuals) and the organization as a business partner, is assessed
by the full set of trust criteria. Which components are selected for the research mostly
depends on the specics of a planned research.
Empirical research results of the trust criteria. Trust criteria at the individual
level are related to individual’s need to develop certain characteristics. In this regard,
decision was made to survey students, studying in business, economics and nance pro-
grams. e research was performed by surveying Mykolas Romeris University bachelors
and masters students, studying in Business and Economics programs in 2012. e re-
spondents were being asked “What personal traits do you think are the most important
for the entrepreneur?” Criteria used in the survey were selected those, which might be
important in the trust dimension assessment.
In 2011-2012, N students studied in these programs. According to the Panniot for-
mula, a sample of 393 students was needed to get representative results. In this research,
answers of 420 students were used to get the results. It is important to emphasize the fact
that part of the students were employed or had their own business. Likert scale was applied
in the survey with values 1 (not important) to 5 (extremely important). Survey results were
processed using SPSS statistical program with a permissible 5 percent error. In order to
identify the links between the criteria, correlation analysis was applied. Pearson correlation
coecient allowed the assessment of the linear relationship strength.
Table 1. e necessity of individual traits, associated with a trust
in business correlation coecient
Pearson Correlation 1. 2. 3. 4. 5. 6. 7.
1. Foresight/perceptiveness 1
N 422
2. Honesty/promise keeping ,184** 1
N 422 423
506 Eglė KAZLAUSKIENĖ, Ilona BARTUŠEVIČIENĖ
3. Competence/ability ,343** ,333** 1
N 422 423 423
4. Reputation/image ,237** ,148** ,236** 1
N 422 423 423 423
5. Goodwill/altruism ,073 ,474** ,214** ,115* 1
N 422 423 423 423 423
6. Tolerance, respect, tactfulness ,178** ,466** ,237** ,200** ,491** 1
N 422 423 423 423 423 423
7. Trust/openness ,064 ,370** ,186** ,133** ,462** ,430** 1
N 421 422 422 422 422 422 422
* Correlation is signicant at the 0.05 level (2-tailed).
** Correlation is signicant at the 0.01 level (2-tailed).
According to the research results, obtained values almost in all cases (18 out of 12)
were statistically signicant (p = 0,000 < 0, 01). e strongest correlation was identied
between these individual traits associated with a trust in business:
Goodwill/altruism and honesty/promise keeping with correlation coecient
of 0,474**; tolerance, respect, tactfulness with correlation coecient 0,491**;
trust/openness conrmed correlation of 0,462**.
Honesty/promise keeping and tolerance, respect, tactfulness revealed correlation
coecient of 0,466**; trust/openness showed correlation coecient of 0,370**.
Trust/openness and tolerance, respect, tactfulness showed a correlation coef-
cient of 0,430**.
It can be argued that along with the increase of personal traits, which would be asso-
ciated with the trust in the business environment, there is a deant need for other traits, as
well, and vice versa. It can be stated that at the condence level of 95 percent, trust criteria
and their need, in business in a sense of legitimacy, are statistically signicantly associ-
ated. In trust dimension within business relationship identication, coverage is a complex
process, which leads towards the need for a further in depth research study. e emphasis
on the trust research direction develops methodological base, which allows performing
investigations regarding trust formation within partnerships. e emphasis on the trust
components has created a methodological framework, which might be usefull in perform-
ing the research study analyzing inter-organizational trust formation possibilities.
Conclusion
Aer analyzing organizations’ trust among business partners’ formation and as-
sessment theoretical assumptions and highlighting trust assessment methodological as-
pects, the following conclusions were formed.
e concept of trust is very diverse and mainly depends on the research problem,
which is subjective to the author’s point of view. Some authors think of trust as a psycho-
logical state, while others think of trust as a behavioral aspect. In addition, there is the third
507
Trust Dimensions in the Business Relationship
opinion, which argues that these two approaches can go together. Also, trust dimensions in
business relations are closely related to risk, vulnerability, expectations and other factors.
Trust dimensions can exist at dierent levels, such as individual, organizational and
inter-organizational. In addition, trust among organizations can be explored within indi-
vidual, group of individuals or organizational level. Variety of reasons aect trust in busi-
ness relations process formation and development, which cause certain advantages, such
as willingness of business partners to minimize the control and increase the eciency,
increase of mutual commitment degree, facilitation of the conict resolution, increase in
tolerance, and the enhancement in knowledge and information dissemination as well as
innovation implementation.
e assesment of trust dimension in business relations is closely related to the
criteria identication, including competence/ability, foresight/perceptiveness, honesty/
promise keeping, reputation/image, goodwill/altruism, trust/openness, tolerance, re-
spect, tactfulness. ese trust criteria are closely related, yet their components can vary
depending on the research study being performed. e empirical study revealed that
certain individual traits are necessary to build trust in business. Statistical data results
showed that the respondents paid less attention towards goodwill and altruism, with the
enhanced emphasis on the competencies/ability and reputation/image. Estimates of the
correlation analysis showed that there is a week positive statistically signicant relation
among all criteria used to identify the trust.
Trust enhances the eciency of business and is an inherent condition for any type
of relations as well as for the appearance of business relations among partners. Although,
despite the necessity of trust existence, the assesment of trust for business partners is
a complicated and complex task to be solved, which requires further research studies
within organizational and inter-organizational level.
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PASITIKĖJIMO DIMENSIJA VERSLO SANTYKIUOSE
Santrauka. Pastaraisiais metais pasitikėjimo dimensija verslo santykių kontekste sulaukė
daugiau užsienio mokslininkų dėmesio. Susidomėjimą šia tyrimo sritimi, viena vertus, lėmė verslo
aplinkos pokyčiai. Kita priežastis – teigiamas pasitikėjimo poveikis kuriant ir plėtojant našius ir
naudingus tarpusavio santykius skirtingose verslo srityse. Pasitikėjimas padidina verslo funkcio-
navimo efektyvumą ir yra būtina sąlyga bet kokiems santykiams, taip pat ir santykiams tarp verslo
partnerių, atsirasti ir plėtotis. Pasitikėjimas organizacija reiškia pasitikėjimą žmonėmis, dirbančiais
toje organizacijoje, todėl dažnai jis yra nagrinėjamas psichologiniu ir elgesio aspektais. Pasitikėjimo
verslo partneriais vertinimas yra sudėtingas ir kompleksiškai sprendžiamas uždavinys. Norint
įvertinti pasitikėjimo formavimosi priežastis, svarbu identikuoti pasitikėjimo vertinimo kriterijus
tiek individų, tiek ir organizacijų lygmeniu. Išanalizuota pasitikėjimo dimensijos verslo santykiuose
aprėptis leidžia atskleisti pasitikėjimo, kaip tyrimo objekto, sandarą ir turinį, lygius ir formas, pa-
sitikėjimo formavimosi priežastis ir vertinimo kriterijus bei reikalauja tolesnių organizacinio bei
tarporganizacinio lygmens tyrimų.
Eglė KAZLAUSKIENĖ, Doctor in Economics, Professor in Economics and Management
Institute, Head of research programme “National Sustainable Growth in the Context of Glo-
balisation. Research interests: business systems, organizational networks, problems of services bu-
siness and development.
Eglė KAZLAUSKIENĖ – Mykolo Romerio universiteto Ekonomikos ir vadybos instituto
profesorė, ekonomikos mokslų daktarė. Mokslo programos „Šalies darni plėtra globalizacijos są-
lygomis“ vadovė. Mokslo tyrimų sritys: verslo sistemos, organizacijų tinklai, paslaugų verslo ir plėt-
ros problemos.
Ilona BARTUŠEVIČIENĖ, Mykolas Romeris University, Doctoral student in Economics.
Research interests: intangible assets, economic eciency.
Ilona BARTUŠEVIČIENĖ – Mykolo Romerio universiteto ekonomikos krypties doktorantė.
Pagrindinės tyrimų sritys: nematerialūs ištekliai, ekonominis efektyvumas.
... Mutual trust is trusting each other that refers to the belief that each party will fulfill its obligations and act as expected (Kazlauskienė & Bartuševičienė, 2013;Ring & Ven, 1992), which includes voluntary engagement, mutual helping partners, providing information and supporting ways of cooperation in other fields (Kazlauskienė & Bartuševičienė, 2013). Meanwhile, connecting people and creating trust is considered as a fundamental component in forming a reliable collaboration environment (Mazzella & Sundararajan, 2016) and the key requirement for establishing long-term business associations (Palvia, 2009). ...
... Mutual trust is trusting each other that refers to the belief that each party will fulfill its obligations and act as expected (Kazlauskienė & Bartuševičienė, 2013;Ring & Ven, 1992), which includes voluntary engagement, mutual helping partners, providing information and supporting ways of cooperation in other fields (Kazlauskienė & Bartuševičienė, 2013). Meanwhile, connecting people and creating trust is considered as a fundamental component in forming a reliable collaboration environment (Mazzella & Sundararajan, 2016) and the key requirement for establishing long-term business associations (Palvia, 2009). ...
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Strategic alliances, buyer-supplier relationships, joint ventures and other forms of interorganizational cooperation are of increasing importance for the competitive advantage of organizations. Formalization – in the form of contracts, rules and procedures – is considered to be a crucial factor for these relationships. Nevertheless, an integrative framework of its role in interorganizational relationships has hitherto remained absent in the literature. Drawing on conceptual developments, an in-depth case study and survey data, this study provides such an integrative framework. Six main research findings emerge. First, tensions between the need and the ability to formalize can be reduced by investing in information processing and sensemaking. Second, formalization has functions beyond coordination and control, such as increasing legitimacy and enabling sensemaking. Third, managers are not only occupied with the “right” degree of formalization, but also with managing tensions between the functions and dysfunctions of formalization. Fourth, when formalization is accompanied by standardization, its contribution to interorganizational performance declines, due to lower degrees of “mindfulness” by contracting parties. Fifth, interorganizational performance is highly dependent upon the levels of formalization and trust at the start of relationships, with intermediary levels of both governance forms exhibiting more positive effects than extreme levels. Finally, formalization is substituted and complemented by other governance mechanisms, requiring partners to consider portfolios of mechanisms when deciding on formalization. These findings and the integral framework to which they are connected suggests that researchers and practitioners should regard formalization from multiple disciplines, theories and perspectives. They enrich their understanding of its role in interorganizational relationships, and enable them to utilize formalization so that it contributes to performance.