Contractual control, the propensity to trust, active trust development: construction industry

Abstract

Purpose The purpose of this paper is to examine the assumptions concerning how the processes that foster trust are influenced by contractual control and managers’ propensity to trust. More specifically, the paper investigates the extent to which distinct types of trust (i.e. cognition- and affect-based trust) are differentially and interactively associated with contractual control and the propensity to trust. Design/methodology/approach The authors collected survey data on 260 architect–contractor project-based relationships in China. Findings The results of this paper show that contractual control and a project manager’s propensity to trust are positively related to the managers’ trust in their partners. However, the interaction of the propensity to trust and contractual control has a negative effect on cognition-based trust. Cognition-based trust, in turn, is linked to the unique and interactive relationships between contractual control, the propensity to trust and affect-based trust. Research limitations/implications While this paper adds to the literature on trust and control, future research is needed to fully understand the differences in interpersonal trust across alliances and countries. Practical implications These findings provide important implications for firms hoping to facilitate active trust development processes. Originality/value More is now known about the trust in inter-organizational settings at the individual level.

Enhancing Trust Between PPP Partners: The Role of Contractual Functions and Information Transparency

“…For example, Malhotra and Lumineau (2011) concluded that contractual control harmed goodwill trust. However, the results of this study are consistent with the study of Lu and Yan (2016), which indicates that contractual control is beneficial to enhance the relationship between partners. This may be due to the characteristics of the PPP project.…”

Supply chain governance: a conceptual model

“…Anderson and Narus (1990, p. 45) described trust in an interorganizational exchange relationship as “a company's belief that another company will take actions that will result in positive results for the company, in addition to not taking unexpected actions that would result in negative results for the company.” Scholars have conceptualized trust as either one-dimensional (Mayer et al , 1995; Zaheer et al , 1998) or multidimensional (McKnight et al , 1998; Lu and Yan, 2016; Kobayashi et al , 2017). However, trust has generally been strongly associated with benevolence, honesty, and competence among business partners (Mayer et al , 1995; McKnight et al , 1998; Wang et al , 2014).…”

Do control mechanisms always promote collaborative performance: the role of formal institutions and business ties

“…relational norms) control mechanisms and investigated their roles (Benoit et al, 2019;Feng and Krishnan, 2019;Lu and Yan, 2016;Zhou and Poppo, 2010), with conflicting results (Crosno and Brown, 2015). Specifically, as a formal control mechanism, some scholars have argued that contracts enhance collaborative performance (Lu and Yan, 2016;Romzek and Johnston, 2002) by providing standard procedures (Mahapatra et al, 2010), sanctioning breach of contract (Cao and Lumineau, 2015; and resolving potential conflicts (Petersen and Ostergaard, 2018;. Conversely, others have suggested that contracts can hinder collaborative performance (Heide et al, 2007), as they may be too inflexible to deal with frequent environmental changes (Fang et al, 2011;Tangpong et al, 2010).…”