The Missing link in network dynamics

Yiu Hing Wong, Wing Man Lai, Tze. L. Yip, Ricky Y. K. Chan

Research output: Contribution to journalArticle

Abstract

An important issue in the management of organizational networks is the balancing of relationships at both the interpersonal and interorganizational levels throughout the network while satisfying an external end-customer requirement. Addressing this issue requires an understanding of the key dynamics of a complex network system including the role of trust in relationships. Therefore, in this paper, we first develop a three-level relationship model with a trust transferability concept that evaluates the quality of multiple levels of relationships We then present trust dynamics at the individual level to enhance the overall trust in the system while meeting the required organizational trust with the external customer. The model delivers a statistically sound determination. Furthermore, the model generates managerial insights into related design and control issues of organizational networks. In numerous sectors of industry, including electronics, computers, and automobiles, internal and external relationships usually take the form of a complex dynamic network connecting customers, salesmen, and administrative staff. Throughout the organizational network, there exist different levels of trust associated with the relationships involving customers-salesmen (external, interpersonal), salesmen-back office (internal, intra-organizational), and customers-organization (external, interorganizational). These multi-level trusts affect the overall trust of a network in terms of customization, which in turn affects the minimal trust level witnessed in today’s competitive business environment. Amongst other things, high-level relationships usually produce an efficient level of customer satisfaction, and although the efficient level of both internal and external trust presents competitive advantages, the management of such relationships and trust poses a great challenge to many organizations. We find many examples in the recent American subprime mortgage crisis and the current global financial crisis. One of the most important steps that most institutions, particularly financial institutions, are taking in an attempt to prevent the crisis from worsening is to rebuild inter-party and trilateral trust levels in the global network.
Original languageEnglish
Pages (from-to)134-141
Number of pages8
JournalThe Business review, Cambridge
Volume17
Issue number1
Publication statusPublished - 2011
Externally publishedYes

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