Trust in Value Co‐Creation Strategies: Moving Toward a Conceptualization We Can Trust

• Author: Stanley E. Fawcett,Yao Henry Jin,David Read
• Published date: 01 March 2014
• DOI: http://doi.org/10.1111/jbl.12040
• Date: 01 March 2014

Dialogue

Trust in Value Co-Creation Strategies: Moving Toward a

Conceptualization We Can Trust

David Read

1

, Yao Henry Jin

2

, and Stanley E. Fawcett

1

1

Weber State University

2

Miami University

Within the relational view, trust is a vital governance mecha-

nism. Trust enables companies to: (1) mitigate safeguarding, (2)

establish efficient resource-sharing routines, and (3) integrate and

leverage complementary competencies for collaborative advan-

tage. As a central psychological construct, extensive research

across diverse domains has posited multitudinous trust defini-

tions. Yet substantive inconsistencies exist in conceptualizations

of interorganizational trust. Focusing on the supply chain man-

agement (SCM) domain, Whipple et al.(2013) find that despite

agreement that trust is a nuanced, multifaceted phenomenon, 39

of 42 articles operationalized trust as a single construct. Whipple

et al. argue that extant trust scales are underdeveloped, suggest-

ing we cannot trust them. We continue this dialogue commenting

on the consequences of trust conceptualizations and propose a

new lens to help us better measure and manage trust as an

enabler of value co-creation.

CONSEQUENCES OF UNDERDEVELOPED TRUST

CONCEPTUALIZATIONS

Trust is most-often defined as a combination of benevolence,

credibility, and integrity. These are characteristics to aspire to—

especially in today’s environment where companies seek to be

perceived as good corporate citizens. Conceptualizing trust this

way may, however, lead trust to be viewed as an end in and of

itself. Who can argue that a company should not be credible,

should not possess integrity, or should not avoid exploiting part-

ners? Yet, when trust becomes a “good”thing of itself, decision

processes can become counterproductive. Should a company seek

to build trust if higher levels of perceived trust dissipate value?

Clearly, the answer is, no!But, does that mean that high-level

trust is bad? This is the question raised by researchers as they dis-

cuss the dark side of trust, arguing that high levels of trust invite

partner complacency and/or opportunism.

THE TRUST CONSTRUCTION LENS

The tendency to perceive trust as “good or bad”may be mislead-

ing, opening the “dark-side”argument and diminishing manag-

ers’ability to proactively govern through trust. Consider, for

example, the other common interorganizational governance

mechanism—the contract. Few would argue that using a contract

is bad. Rather, most would focus on the quality of the contract—

and the contracting process. Is it possible to construct a bad con-

tract or to use it inappropriately? Yes—on both counts!Viewed

similarly, trust should be conceptualized as an enabler and man-

agers should be tasked with constructing governance-specific

trust to enable desired outcomes. In SCM, for example, the gov-

ernance goal is enhanced, nonimitable value creation capability

—a precursor to outstanding customer satisfaction and loyalty.

APPROPRIATENESS

From a construction perspective, trust, like training or technology,

is an enabler of strategic vision. Similarly, like training or technol-

ogy, trust can be pursued well or poorly. When we interviewed

managers at over 100 firms, they identified trust as an essential alli-

ance governance mechanism. They noted that establishing the

appropriate level and type of trust is the key to alliance success.

Transaction relationships need little proactive governance. Invest-

ing in high-level trust yields no return—at high costs. The goal is

simply to avoid the loss of partner trust (i.e., nonexploitation). By

contrast, relationships that offer unique value co-creation require

intensive governance—both to reduce vulnerability and to guide

value creation. A high level of trust is thus required. Such trust

must be more than collegiality; it must be capability based.

TRUSTWORTHINESS

Seeking an appropriate level and type of trust to achieve strate-

gic goals shifts the focus from trust to the process of construct-

ing trust. This focus on process moves the discussion from trust

to trustworthiness. Managers can proactively (1) signal trustwor-

thiness via specific behaviors and (2) assess partner reciproca-

tion. If both sides of a buyer/supplier dyad repeatedly exhibit

trustworthiness, trust emerges. To explore trust construction, we

studied two companies known for proactively signaling trustwor-

thiness, interviewing buying managers at the focal firm as well

as account owners from suppliers. Figure 1 depicts an overview

of the data structure, showing how two theoretical dimensions of

trustworthiness—perform-to-promise capability and relationship-

commitment capability—emerged from the coding process.

Corresponding author:

Stanley E. Fawcett, Business Administration, Weber State University,

WB 267, Ogden, UT 844408, USA; E-mail: stan.e.fawcett@gmail.com

Journal of Business Logistics, 2014, 35(1): 97–98

© Council of Supply Chain Management Professionals