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Drivers and Performance Outcomes of Trust in International Strategic Alliances: The Role of Organizational Complexity

Cardiff Business School, Cardiff University, Cardiff CF10 3EU, United Kingdom
Leeds University Business School, University of Leeds, Leeds LS2 9JT, United Kingdom
J. Mack Robinson College of Business, Georgia State University, Atlanta, Georgia 30303
robsonmj{at}cf.ac.uk
csk{at}lubs.leeds.ac.uk
dbello{at}gsu.edu

Trust between partners has become a key construct in interfirm relationship management. However, elucidating the precise nature of the trust-performance link in international strategic alliances remains an important theoretical and empirical challenge for management scholars. Discordant findings evident in existing alliance research raise concerns that interpartner trust does not always enhance venture performance. To investigate this issue, we build and test a theoretical framework that integrates different perspectives of alliance functioning by focusing on the social and bureaucratic forces critical to cooperative processes. The model (1) identifies organizational complexity mechanisms underlying the development of trust in international strategic alliances, (2) points to alliance size as an important factor that conditions the trust-performance relationship, (3) incorporates a new, third-order conceptualization of interpartner trust in alliances, and (4) suggests a theory-based multidimensional assessment of alliance performance. Based on data collected through personal interviews in 177 international strategic alliances, the results suggest that, while interpartner trust is positively associated with alliance performance, this relationship becomes stronger when alliance size declines. We find that both distributive fairness and partner similarity are central to the achievement of a trusting alliance partnership. Managerial insights into developing successful trust-based international alliance exchanges are offered, and fruitful avenues of research are discussed.

Key Words: trust; complexity; performance; interorganizational relationship management