Determinants of Trust in Global Strategic Alliances: Amrad and the Australian Biomedical Industry

Abstract

Although the importance of trust in creating and maintaining interorganizational relationships has been acknowledged, little research has focused on the processes leading to the development of trust in international strategic alliances. This article addresses this shortcoming and reports the results of field research on the evolution of AMRAD Pharmaceuticals, a strategic alliance between U.S. and Australian biomedical firms. Based on this case study, a process model of trust is developed which describes how trust can be created and expanded between strategic alliance partners, and its implications for alliance performance. Propositions are developed to motivate and guide future empirical investigation.

How managers can build trust in strategic alliances: a meta-analysis on the central trust-building mechanisms

“…They know each other better and can predict and understand each other's behavior (Nielsen 2007;Parkhe 1998b), capabilities and needs (Rosenkopf et al 2001). A history of past interaction and collaboration can create a unique path to trust (Jennings et al 2000;Poppo et al 2008;Ybarra and Turk 2009). Although economists view trust in the context of future gains or losses and sociologists focus on the common context, past history and a jointly developed background (Zaheer and Harris 2006), both agree upon the idea that a joint cooperative history provides critical information on past cooperative behavior, offers the opportunity to establish relation-specific routines and reduces the perceived likelihood of opportunism (Parkhe 1993a).…”

Strategic Alliance Outcomes: a Transaction‐Cost Economics Perspective

“…While there are two qualitative studies that take a more holistic approach to assessing alliance outcomes and the factors associated with them (e.g. Jennings et al, 2000;Yan and Gray, 1994), the insights from these studies have not yet been tested systematically. Thus, this methodological limitation can skew the results.…”

Alliance entrepreneurship and entrepreneurial orientation: the mediating effect of knowledge transfer

“…From this view, alliance partners do need an evaluation of their entrepreneurial performance during and after the formation of an alliance. That is why, in our conceptualization of alliance entrepreneurship, we use the two phases of an alliance's formation, i.e., the pre-alliance and post-alliance phases (Nielsen 2007;Jennings et al 2000) as the dimensions describing this construct. Correspondingly, the pre-alliance formation's factors include: Partners' similarities (the extent of the likeness of the partner companies, in terms of their marketing, production, raw materials, accounting, information systems, organizational structure, technology, customers, corporate culture, goals and strategies, leadership styles and human resources management practices); prior experience (the history of cooperation between the parties, in the form of alliances, being a customer, supplier, or distributer); the partners' reputation (deriving from factors such as well-known managers, high quality products/services, financial status, good relationship with other organizations and the size of the organization), and risk reduction (reduction of the possibility of loss or failure of the parties).…”

“…Saxton (1997), for instance, establishes the positive effects of partners' reputations, prior experience, shared decision making, and partners' similarities on alliance outcomes. Identifying the antecedents and consequences of trust in strategic alliances, Jennings et al (2000) proposes the assumption that partners in alliances, with higher degrees of honesty and integrity, good partner reputations, and communication's openness, are more likely to trust each other. Further, pre-and postalliance formations' factors are recognized as being connected indirectly through several mediating variables.…”