Trust in exporting relationships: the case of SMEs in Ghana

In this era of globalisation, firms and their managers are increasingly interested in building relationships with customers, suppliers and other stakeholders in order to successfully grow and compete. Trust has been found to be a defining factor in building up networks and relationships which firms use in economic exchanges both at national and international levels. However, the role of trust in the context of small and medium sized enterprises (SMEs) internationalisation is a recent phenomenon of academic inquiry that has not been widely studied particularly in the context of developing countries. Hence, this study aims to fill this knowledge gap by investigating the processes of development, use, violation and repair of trust in exporting SME relationships in a less developed African country, Ghana. At the theoretical level the study draws mostly on three perspectives: embeddedness, entrepreneurship and psychic distance. At the empirical level, this research uses a case study of 24 exporting SMEs in Ghana to study this subject in detail. The findings show that entrepreneurs had built and used personalised relationships while avoiding formal contracts and the courts in their internationalisation activities. They had mostly relied on institutional forms operating in parallel to formal state-based and legal systems. These are shown to be hybrid forms drawing on traditional cultural institutions such as chieftaincy and religion, combined with forms of corporations and cooperatives. The findings further reveal how organisations violate and repair trust when crossing cultural boundaries, looking at the particular issues that face smaller businesses. Particularly, it shows that culture is an important factor in trust based relations and therefore the concept of trust violation is socially constructed. While some aspects of networks and trust literature are confirmed, other aspects are refuted showing that context impacts on the processes of relationships and trust building, violation and repair. This study therefore contributes to the ongoing development of a theoretical understanding on networking, relationship building and trust in international entrepreneurship. Particularly it emphasises the importance of understanding cultural contexts in entrepreneurship research