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

Akbar Zaheer, Bill McEvily and Vincenzo Perrone
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Akbar Zaheer: Carlson School of Management, University of Minnesota, 321 19th Avenue South, Minneapolis, Minnesota 55455
Bill McEvily: Graduate School of Industrial Administration, Carnegie Mellon University, Schenley Park, Pittsburgh, Pennsylvania 15213-3890
Vincenzo Perrone: Universita' degli Studi di Cassino and SDA Bocconi University, Graduate School of Management, Italy

Organization Science, 1998, vol. 9, issue 2, 141-159

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.

Keywords: Interorganizational Trust; Interfirm Relations; Relational Governance (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (597)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:9:y:1998:i:2:p:141-159

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