Institutional Trust and Familiarity in Online Interorganizational Relationships

Proceedings of the European Conference on Information Systems (ICIS) Naples, Italy, June 23-25 (2003)

13 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: June 2003

Abstract

Institutional trust is necessary for inter-organizational relationships in e-commerce. Two types of institutional trust are herein proposed (a) third-party institution-based trust, which deals with intermediary-driven structures, and (b) bilateral institutionalized trust, which deals with dyadic inter-organizational processes. We examine how these two types of institutional trust develop through their underlying dimensions (i) structural assurances, (ii) facilitating conditions, and (iii) situational normality. We focus on how interorganizational trust and online relationship building can be longitudinally facilitated by institutional trust, which can initially substitute and progressively complement the role of familiarity. More specifically, this study focuses on the time-dependent nature of initial trust formation, and specifically on the role of relationship phase (from exploration to maturity), by describing (a) the role of bilateral relative to third-party institutional trust on interorganizational trust, and (b) the transition of the underlying dimensions of institutional trust. This research has implications for (1) the longitudinal nature and role of institutional trust in online relationship building, (2) the literature on initial trust formation, and (3) the strategic design and use of cost-effective trust-building mechanisms.

Suggested Citation

Pavlou, Paul A. and Tan, Yao-Hua and Gefen, David, Institutional Trust and Familiarity in Online Interorganizational Relationships (June 2003). Proceedings of the European Conference on Information Systems (ICIS) Naples, Italy, June 23-25 (2003). Available at SSRN: https://ssrn.com/abstract=2380660

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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