How Much do you Trust Me? The Dark Side of Relational Trust in New Business Creation in Established Companies

Shaker A. Zahra, R. Isil Yavuz and Deniz Ucbasaran

Entrepreneurship Theory and Practice, 2006, vol. 30, issue 4, 541-559

Abstract: Entrepreneurship in established companies centers on new business creation that is essential for profitability and growth. Yet, it is a complex process that is riven with technical, organizational, and political uncertainties. In this article, we explore the role of trust in the new business creation process in established companies. While there is agreement that trust is conducive to entrepreneurial activities in these companies, research on the dysfunctional effects of trust on new business creation initiatives has been sparse. We contribute to the literature by discussing the various stages of the business creation process (focusing on opportunity recognition, evaluation, refinement, championing, and implementation) in established companies, examining the positive effects of relational trust on each of these stages, and analyzing the negative effects of overreliance on relational trust for each stage. We conclude by highlighting the key managerial and theoretical implications of our analyses and by outlining promising avenues for future research.

Date: 2006
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:30:y:2006:i:4:p:541-559

DOI: 10.1111/j.1540-6520.2006.00134.x

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