Understanding dynamics of trust in business relationships

Trust has been widely studied in the context of business relationships and is viewed as one of the drivers for relationship development. However, it has long been treated as a static construct explained in terms of other relationship variables. The way it changes over time and the drivers of this have been largely ignored and underexplored. The research reported in this thesis adopts an evolutionary perspective in understanding the dynamics of trust in dyadic business relationships. In particular, it addresses two research questions. Firstly, how does trust change and develop over the course of a relation? Secondly, what are the underlying mechanisms that drive the dynamics of trust in relationship development?Longitudinal case studies are conducted using event-based narrative analysis, assisted by the computer software of ETHNO. The event-based narrative analysis is still being developed and has not been used in marketing before. Collectively, these studies reveal important and interesting findings of the dynamics of trust in business relationships. A key conceptual distinction is made, that is often ignored in the literature, i.e. between trusting attitudes and trusting actions, though they are interconnected. The existence of trusting attitudes is a prerequisite for trusting actions to take place, but the occurrence of a trusting action is also impacted by trusting firms’ behavioral intentions subject to particular external, internal and relational environments at a given time. The trusting actions and their outcomes, in turn, reshape, redevelop and restructure the nature and extent of trusting attitudes held by partner firms in the relationship.Different sets of mechanisms are identified underlying changes in trusting attitudes and the emergence of trusting actions. Changes/non-changes in trusting attitudes are mainly explained by cognitive mechanisms, such as learning, adapting, stereotyping, evaluating, affective, transferring, and institutionalizing mechanisms. The emergence of trusting actions is more strategic and controlled and is affected by not only cognitive mechanisms but also by various types of economic, psychological and emotional mechanisms.Being one of the first efforts to investigate the dynamics of trust over time in real business relationships, this research fills an important knowledge gap. The research leads to the identification of several fruitful areas for future research including further studies of business relations and networks in other contexts and the development of agent based models of relationship and network dynamics and evolution. The results and the mechanisms identified are of value also to managers in terms of how to develop better strategies for developing, maintaining and using trust in business relationships