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Inter-organizational trust and the dynamics of distrust

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Abstract

Early research on inter-organizational trust drew on theories about social ties among individuals, for example, duration of ties and amount of interaction, yet these proved inadequate to explain the diverse arrangements arising in international business. Dyer and Chu's award-winning JIBS paper demonstrated that trust was best predicted by organizational processes that developed positive expectations of predictability, reliability, and competence, not only within national boundaries but also in cross-national relationships. This review of recent trust research building on Dyer and Chu draws attention to six themes: (1) new conceptualizations that explore identity, roles, and rules as foundations of presumptive trust at the organizational level; (2) dynamics of trust and distrust over time, how violations of trust are interpreted, and what affects ease of repair; (3) pendulum swings in inter-organizational relationships, arising from plural governance and alternation between modes, but also resulting in the continuous coexistence of positive and negative states; (4) the impact of intra-organizational conflict and inter-organizational coalitions on the establishment and maintenance of trust; (5) the relative impact of nation-level vs organization-level differences in culture as influences on trust; and (6) whether intermediate modes of exchange in between transactional and relational modes are unstable, transitional hybrids or embody complementarities that yield both value and stability.

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Notes

  1. It is worthwhile to reflect briefly on the institutional context that made this research possible. Dyer and Chu's research, as well as that of Helper and Sako, was funded by the International Motor Vehicle Program (IMVP), which was founded at MIT in 1985 with a mandate to investigate differences in competitive capabilities among automakers and suppliers globally. IMVP encouraged primary data collection on the entire automotive value chain, from manufacturing and product development to supplier relations and distribution, and spawned a great many international collaborations. In the early 1990s, IMVP became part of the Sloan Foundation's Industry Studies Program. This program recently became the basis for the Industry Studies Association, a new professional association whose mission is to advance cross-disciplinary research by scholars who “make the kind of personal investment of time that is necessary to learn about the market, firms, and institutions in the industry or industries they study” (www.industrystudies.org) – a description that fits Dyer and Chu's research perfectly.

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Acknowledgements

Thanks to two anonymous referees for helpful suggestions and Editor-in-Chief Lorraine Eden for insightful comments on the differences between mistrust and distrust.

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Accepted by Lorraine Eden, Editor-in-Chief, 18 October 2010. This paper has been with the authors for one revision.

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MacDuffie, J. Inter-organizational trust and the dynamics of distrust. J Int Bus Stud 42, 35–47 (2011). https://doi.org/10.1057/jibs.2010.54

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