The Transitional Role of Institutional Trust in Online Interorganizational Relationships

Proceedings of the 36th Hawaii International Conference on System Sciences, 2003

10 Pages Posted: 18 Jan 2014

See all articles by Paul A. Pavlou

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

Yao-Hua Tan

VU University Amsterdam

David Gefen

Drexel University

Date Written: 2003

Abstract

Given the uncertainty of the online environment, institutional trust is fundamental in building and retaining online interorganizational relationships. The authors propose two types of institutional trust (a) third-party institution-based trust, which deals with intermediary driven structures, such as those in online B2B marketplaces, and (b) bilateral institutionalized trust, which deals with dyadic interorganizational processes, standards, and norms. We examine how institutional trust develops through their underlyding dimensions (i) structural assurances, (ii) facilitating conditions, and (iii) situational normality to engender trust and influence relationship continuity. This study focuses on the time-dependent nature of institutional trust from the exploratory to the maturity phase by describing (a) the role of bilateral relative to third party institutional trust on buyer-supplier trust, and (b) the transition of the three underlying institutional dimensions on trust over the relationship’s life cycle. This research has implications for (1) the longitudinal role of institutional trust in online relationship building, (2) the design of trust-building mechanisms in online B2B marketplaces, (3) the safe and cost-effective building of online interorganizational relationships, and (4) the literature on initial trust formation.

Suggested Citation

Pavlou, Paul A. and Tan, Yao-Hua and Gefen, David, The Transitional Role of Institutional Trust in Online Interorganizational Relationships (2003). Proceedings of the 36th Hawaii International Conference on System Sciences, 2003. Available at SSRN: https://ssrn.com/abstract=2380296

Paul A. Pavlou (Contact Author)

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

Yao-Hua Tan

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

David Gefen

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

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