Mutual and Exclusive: Dyadic Sources of Trust in Interorganizational Exchange

Organization Science Volume: 28, Number: 1 (January-February 2017): 74-92.

Rotman School of Management Working Paper No. 2873777

40 Pages Posted: 23 Nov 2016 Last revised: 14 Apr 2017

See all articles by Bill McEvily

Bill McEvily

University of Toronto - Rotman School of Management

Akbar Zaheer

University of Minnesota - Twin Cities - Carlson School of Management

Darcy Fudge Kamal

California State University, Sacramento - College of Business Administration

Date Written: November 21, 2016

Abstract

Trust in interfirm exchange has traditionally been treated as mutually held and jointly determined by the two parties in a relationship. Yet, the expectations of exchange partners can, and routinely do, differ with respect to the goals, preferences, and vulnerabilities in their shared relationship. To account for such differences in expectations we propose a broadened conceptualization of the sources of interorganizational trust as dyadic. Viewing the sources of trust as dyadic expands the conventional focus on mutual elements to further emphasize exclusive features of an exchange relationship. To substantiate our theory, we examine a key source of interorganizational trust, exchange hazards, and assess the extent to which its effects vary as a function of: (1) the locus of exchange hazards (own vs. other) in the dyad, (2) the degree of power imbalance in the dyad, and (3) each party’s power position in the dyad. To assess the validity of our claims we devise a matched dyad research design and collect identical information from both buyers and suppliers in a given exchange relationship. Based on our results, we make three unique observations consistent with the notion of dyadic sources of trust. First, the same exchange hazards have contrasting effects on trust (enhancing versus diminishing) across the dyad. Second, the degree of power imbalance has opposing effects across the dyad. Third, the relative significance of partners’ exchange hazards varies based on their respective power positions.

Keywords: Trust, Dyad, Power, Interorganizational

Suggested Citation

McEvily, William J. and Zaheer, Akbar and Fudge Kamal, Darcy, Mutual and Exclusive: Dyadic Sources of Trust in Interorganizational Exchange (November 21, 2016). Organization Science Volume: 28, Number: 1 (January-February 2017): 74-92., Rotman School of Management Working Paper No. 2873777, Available at SSRN: https://ssrn.com/abstract=2873777

William J. McEvily

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Akbar Zaheer

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Darcy Fudge Kamal (Contact Author)

California State University, Sacramento - College of Business Administration ( email )

School of Business Administration
Sacramento, CA 95819-6081
United States

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