Does Trust Matter? Exploring the Effects of Interorganizational and Interpersonal Trust on Performance

Akbar Zaheer, Bill McEvily, Vincenzo Perrone

Research output: Contribution to journalArticle

Abstract

A conceptual challenge in exploring the role of trust in interorganizational exchange is translating an inherently individual-level concept - trust - to the organizational-level outcome of performance. We define interpersonal and interorganizational trust as distinct constructs and draw on theories of interorganizational relations to derive a model of exchange performance. Specifically, we investigate the role of trust in interfirm exchange at two levels of analysis and assess its effects on negotiation costs, conflict, and ultimately performance. Propositions were tested with data from a sample of 107 buyer-supplier interfirm relationships in the electrical equipment manufacturing industry using a structural equation model. The results indicate that interpersonal and interorganizational trust are related but distinct constructs, and play different roles in affecting negotiation processes and exchange performance. Further, the hypotheses linking trust to performance receive some support, although the precise nature of the link is somewhat different than initially proposed. Overall, the results show that trust in interorganizational exchange relations clearly matters.

LanguageEnglish (US)
Pages141-159
Number of pages19
JournalOrganization Science
Volume9
Issue number2
DOIs
StatePublished - Jan 1 1998

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Costs
Industry
Inter-organizational trust
Interpersonal trust
Suppliers
Interfirm relationships
Negotiation process
Levels of analysis
Structural equation model
Buyers
Interorganizational relations
Manufacturing industries
Organizational level

Keywords

  • Interfirm Relations
  • Interorganizational Trust
  • Relational Governance

Cite this

Does Trust Matter? Exploring the Effects of Interorganizational and Interpersonal Trust on Performance. / Zaheer, Akbar; McEvily, Bill; Perrone, Vincenzo.

In: Organization Science, Vol. 9, No. 2, 01.01.1998, p. 141-159.

Research output: Contribution to journalArticle

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