Insights on Building Trust in Interorganizational Relationships

Deep Dive Podcast: Insights on Building Trust in Interorganizational Relationships
Trust is a cornerstone of successful partnerships, but understanding its types and impacts can maximize efficiency. Here are four key insights:
1️⃣ Integrity Matters More: Integrity-based trust significantly reduces transaction costs, especially during ongoing operations, by minimizing monitoring and conflict resolution needs.
2️⃣ Competence-Based Trust Has Its Place: While essential, competence-based trust mainly affects upfront costs, as partners often require detailed contracts to address technical dependencies.
3️⃣ The ROI of Trust: For managers, focusing on integrity yields greater long-term cost savings and smooth cooperation, reducing the likelihood of costly renegotiations.
4️⃣ Complex Contracts Complement Competence Trust: Competence-based trust encourages detailed, domain-specific contracts that enhance value through clear expectations and collaboration opportunities.
Get article: Connelly, B. L., Ketchen, D. J., Crook, T. R., Combs, J. G, & Aguinis, H. 2018. Competence- and integrity-based trust in interoganizational relationships: Which matters most? Journal of Management, 44(3): 919-945. doi.org/10.117...