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Does Trust Matter? Exploring the Effects of Interorganizational and Interpersonal Trust on Performance
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.
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The existence of a relationship of trust between parties reduces transaction costs, strengthens coordination among them, and lays the groundwork for conflict resolution.
“The existence of a relationship of trust between the parties reduces transaction costs, strengthens coordination among them, and lays the groundwork for conflict resolution (Zaheer et al., 1998).”
From Exploring the Moderating Effect of Ethical Project Management Practices in the Success of IT Project: Evidence From the Public Sector (2026) · cites this paper as Zaheer et al., 1998
Trust-based mechanisms identified by Zaheer et al. (1998) have the same impact on the effectiveness of traditional project management tools among project stakeholders within an organization as they do across organizations.
“The present study adds to this argument by applying it to a context where within-project relationships are defined and controlled at an individual level; trust-based mechanisms identified by Zaheer et al. (1998) have the same impact on the effectiveness of traditional project management tools in project stakeholders within an organization as they do on project stakeholders across organizations.”
From Exploring the Moderating Effect of Ethical Project Management Practices in the Success of IT Project: Evidence From the Public Sector (2026) · cites this paper as Zaheer et al., 1998
Trust and accountability moderate the relationship between traditional project management practices and project success (β = 0.19, ΔR2 = 0.068).
“Trust and accountability are both concepts identified as important dimensions that moderate the relationship of the two variables (β = 0.19, ΔR² = 0.068) which contributes to the reduction of transaction costs and stronger coordination between organizations relative to each other via interorganizational trust (Zaheer et al., 1998).”
From Exploring the Moderating Effect of Ethical Project Management Practices in the Success of IT Project: Evidence From the Public Sector (2026) · cites this paper as Zaheer et al., 1998
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Metadata
- Authors
- Zaheer, A., McEvily, B., & Perrone, V.
- Affiliations
- University of Minnesota (US)
- Carnegie Mellon University (US)
- Università degli studi di Cassino e del Lazio Meridionale (IT)
- Venue
- Organization Science
- Published
- 1998-04
- Volume
- 9
- Issue
- 2
- Pages
- 141-159
- ISSN
- 1047-7039 (ISSN-L)
- 1526-5455
- OpenAlex
- W2130660952
- Cited by
- 4,179
- References
- 9
- Citations by year
- 2026: 127 · 2025: 131 · 2024: 127 · 2023: 131 · 2022: 150 · 2021: 179 · 2020: 181 · 2019: 207 · 2018: 176 · 2017: 217 · 2016: 212 · 2015: 212 · 2014: 218 · 2013: 254 · 2012: 250
- FWCI
- 69.50
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Organization Science (publishedVersion)
- Archivio istituzionale della Ricerca - Bocconi (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Customer Service Quality and Loyalty
- Social Sciences › Business, Management and Accounting › Management Information Systems › Quality and Supply Management
- Social Sciences › Business, Management and Accounting › Management Information Systems › Outsourcing and Supply Chain Management
- Keywords
- inter-organizational trust, interpersonal trust, inter-firm relationships, buyer-supplier relationships, negotiation costs, conflict, interorganizational relationships, electrical equipment manufacturing
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