Why the proposal of a complex contract may harm or foster a partner's trust

Praxmarer-Carus, Sandra

doi:10.1016/j.jbusres.2013.07.025

Cited by 20 publications

(13 citation statements)

References 39 publications

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“…In more specific clauses, the details of the contract provide a set of relatively complete standards for evaluating whether any actions deviate from the trustor's expectations (Reuer and Ariño, 2002). Because the contents of contracts are often associated with role performance, such as quality standards or delivery times, contractual control consequently improves the trustor's cognition-based trust in their partner (Praxmarer-Carus, 2014).…”

Section: Cognition-based Trust As a Mediator Of The Contractual Control-affect-based Trust Relationshipmentioning

confidence: 99%

“…Agreeing to the trustor's control requires that the trustee be willing to take the first risk. It also suggests that the trustee's behavioral decision to impart trust is a self-initiated and self-regulated Figure 1 Hypothesized model of relationships commitment to trust building (Praxmarer-Carus, 2014). Because affect-based trust is established in the course of reciprocal behavior (Rempel et al, 1985), the act of accepting the contract provides the basis for affect-based trust building.…”

Section: Cognition-based Trust As a Mediator Of The Contractual Control-affect-based Trust Relationshipmentioning

confidence: 99%

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

Yan

2016

JBIM

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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.

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Section: Cognition-based Trust As a Mediator Of The Contractual Control-affect-based Trust Relationshipmentioning

confidence: 99%

Section: Cognition-based Trust As a Mediator Of The Contractual Control-affect-based Trust Relationshipmentioning

confidence: 99%

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

Yan

2016

JBIM

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“…In total, we analysed 12 studies, based on samples of Russian businessmen and entrepreneurs [17][18][19][20][21][22][23][24][25][26][27][28] and 13 studies based on samples of European businessmen and entrepreneurs [29][30][31][32][33][34][35][36][37][38][39][40][41]. In our study we calculate the content units for each class and the frequency of their representation in the total amount of all recorded indicators of trust in business partnerships.…”

Section: Resultsmentioning

confidence: 99%

Explicit and Implicit Trust Criteria in Business Partnerships

Ismagilova¹,

Boštjančič²

2018

KLS

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Identifying and understanding the similarities and differences between subjective trust criteria in Russian and European business can help offer scientific recommendations for the development of long-term international business cooperation, based on mutual trust, despite the differences between both cultures. The purpose of this study is to describe the relations between the implicit and explicit trust criteria presented in Russian and European studies, and to compare how these criteria are expressed in Russian and European publications from a quantitative perspective. Using the content analysis of European and Russian publications for the period 2005–2015, the following main research questions are considered: (1) Are more references made to explicit trust criteria than implicit trust criteria? (2) Are the explicit criteria focused on a partner’s business mentioned more often than the explicit criteria focused on a partner’s competences and personality? (3) Are more references made to implicit trust criteria in Russian or European scientific articles? As the results reveal, although implicit criteria do not dominate in the subjective trust criteria for business partnerships,they nevertheless have a significant presence. Trust criteria based on characteristics related to business dominate the criteria for a partner’s competences and personality. The differences between explicit and implicit trust criteria in Russian and European publications are not statistically significant. Nevertheless, on average, the difference between implicit and explicit assumptions of confidence is 0.13 in Russian studies and 0.34 in European studies. The study revealed that small companies entering the international market should consider the risks associated with a failure to understand what a business partner considers an implicit sign for triggering business relations and trust. Keywords: trust in business relations, implicit and explicit trust criteria

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“…However, both the complement and the substitute relationships are understandable, for the reason that there would be different mediators or moderators come into play in specific contexts when explaining the relationships. However, few studies offer insights opening up the “black box” of the relationship between contract and inter-organizational trust (Cao et al , 2013; Praxmarer-Carus, 2014). Research that involves investigating the possible mediators and moderators between contract and inter-organizational trust is still lacking.…”

Section: Introductionmentioning

confidence: 99%

“…Thus, the level of bilateral TSIs becomes one of the focused variables of this research when drafting the whole picture of it. Two psychological concepts, namely, perceived safeguard and perceived restriction, are employed in this study to establish the possible pathways from contract complexity to trust (Praxmarer-Carus, 2014). Perceived safeguard here refers to the degree to which one party believes that using a complex contract would bring it adequate feeling of security (Salisbury et al , 2001), while perceived restriction refers to that complex contracts would constrain the behaviors of both parties and reduce their flexibility during the transaction (Cannon et al , 2000).…”

Section: Introductionmentioning

confidence: 99%

Contract complexity and trust in construction project subcontracting

Zhang

Chen

2020

ECAM

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PurposeThe purpose of this paper is to unpack the “black box” of the relationship between contract and inter-organizational trust, both theoretically and empirically. Two mediators, namely perceived safeguard and restriction, are identified to build up two seemingly contrary possible paths between contract and trust from current literature. Both paths are tested in the context of Chinese construction industry due to our access to sample.Design/methodology/approachA survey of 295 contractor-subcontractor relationships from Chinese construction industry was conducted. A three-step multiple regression model was employed to test the mediating effect of perceived safeguard and restriction. Then, a hierarchical regression model was used to test the possible moderating effect of bilateral transaction-specific investment.FindingsThe empirical results support the mediating effect of perceived safeguard between contract and trust in the construction subcontracting industry. Bilateral transaction-specific investments enhance the positive effect of contract on safeguard perception.Originality/valueTheoretically, this study contributes to governance literature by opening up the “black box” of the relationship between contract and trust. It provides a better understanding of how and when contract complexity impacts trust, instead of simply focusing on whether contract and trust act as complements or substitutes. Practically, this study provides guidelines for construction firms to decide the degree of contract complexity under various degrees of bilateral transaction-specific investments to enhance the other party’s trust, so as to improve performance outcomes.

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Why the proposal of a complex contract may harm or foster a partner's trust

Cited by 20 publications

References 39 publications

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

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

Explicit and Implicit Trust Criteria in Business Partnerships

Contract complexity and trust in construction project subcontracting

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