Distinguishing Trust and Power in Interorganizational Relations: Forms and Façades of Trust*

Abstract

During recent years, the role of trust in interorganizational relationships has become an increasingly popular topic in organizational studies. Furthermore, as Sydow discusses in Chapter 1 of this volume, much of the literature has heralded the virtues of trust. Trust is supposed to make interorganizational relations function more effectively by curtailing opportunistic behaviour, by reducing complexity, and by fostering co-ordination and co-operation in ways that more formal contracts cannot (e.g. Ouchi 1980; Zucker 1986; Lewis and Weigert 1985a,b; Bowen and Jones 1986; Dasgupta 1988; Gambetta 1988; Donaldson 1990; Hill 1990; Ring and van de Ven 1992; Morgan and Hunt 1994). In this way, trust has been suggested as an alternative or supplement to hierarchies and markets (e.g. Barney and Hansen 1994) and to rational prediction (Lewis and Weigert 1985a). Trust has also been considered, implicitly or explicitly, as an important component in interorganizational co-operation (e.g. Alter 1990; Knoke 1990; Alter and Hage 1993), collaboration (e.g. Gray 1989; Nathan and Mi troff 1991), joint ventures (Harrigan 1985) and strategic alliances (Kanter 1990). For such ‘collective’ strategies (Astley 1984; Bresser and Harl 1986) to be successful, trust is needed to reduce uncertainty, produce co-operation, solve problems, and uncover innovative solutions (Dodgson 1993; Sabel 1993).