Trust at Different Organizational Levels

Abstract

The authors explore the effects of trust at three distinct organizational levels in a marketing collaboration: interorganizational trust between collaborating firms, each firm's agency trust in its own representatives assigned to a collaborative entity (coentity), and intraentity trust among the representatives assigned to the coentity. Dyadic survey and longitudinal objective performance data from 114 international joint ventures indicate that trust at each level has unique effects but similarly influences the collaborating firms' resource investments or the coentity's use of those resources. Interorganizational and agency trust motivate resource investments in the coentity, particularly in the context of a differentiation strategy, whereas intraentity trust promotes coordination within the coentity, and interorganizational trust and a differentiation strategy magnify that effect. Intraentity trust can also undermine coentity responsiveness to environmental change, especially when joined by interorganizational trust between collaborating firms and formalized decision making within the coentity. These findings demonstrate that managing and building trust at multiple levels is critical to the success of interorganizational marketing collaborations.