Conceptualizing dynamics of trust in business relationships

This paper aims to conceptualize the dynamics of trust in business relationships by identifying its dimensions, processes and determinants. The research employs empirical data obtained from a longitudinal case study of a 10-year business relationship. Event-based narrative analysis, assisted by the computer software of ETHNO, is used in data analysis. This research reveals a key conceptual distinction between trusting attitudes and trusting actions that compose the dynamic nature of trust in business relationships. An analytical framework is developed to show how these two dimensions evolve through distinct but connected processes that are embedded in relationship evolution and affected by different contextual determinants. This research is among the first efforts to formally conceptualize the dynamics of trust in business relationships using empirical studies. The findings are of value to managers in terms of how to interpret the behaviours of their partners more appropriately and how to design better strategies for developing, maintaining and using trust in business relationships. The trust developed between partner firms is not a real competitive advantage of the relationship until it is activated, therefore, managers should also pay attention to the contextual factors that breed partner firms' intentions to engage in trusting actions to promote the relationship development.