Trustworthiness as a Source of Competitive Advantage

Strategic Management Journal, Vol. 15, 175-1 90 (I 994) TRUSTWORTHINESS AS A SOURCE OF COMPETITIVE ADVANTAGE JAY 6. BARNEY Fisher College of avocation, The Ohio State University, Columbus, Ohio, U.S.A. MARK H. HANSEN College of Business Administration, Texas A & M University, College Station, Texas, U.S.A. Three types of conceive in scotch exchanges be identified: weak form trust, semi- substantial form trust, and strong form trust. It is shown that weak form trust can all be a source of competitive utility when competitors identify in unnecessary and expensive governance mechanisms. Semi-strong form trust can be a source of competitive advantage when competitors have differential exchange governance skills and abilities, and when these skills and abilities are dear(p) to imitate. The conditions under which strong form trust can be a source of competitive advantage are overly identified. Implications of this analysis for theoretical and empirical work in strategical management are discussed.

Significant differences in assumption and manner incorrect (since most exchange partners are, in exist amongst behaviorally oriented and economi- fact, trustworthy), socially inefficient (since it cally oriented organizational scholars leads to an overinvestment in unnecessary (Donaldson, 1990; Barney, 1990). While these governance), and morally bankrupt (Etzioni, differences manifest themselves in a wide variety 1988). A more conceivable approach, it is argued, of research contexts, no where are they more would adopt the assumption that most exchange obvious than in research on the role of trust in partners are trustworthy, that they behave as economic exchanges. stewards over the resources they have under On the unmatchable hand, behaviorally oriented their control (Donaldson and Davis, 1991), and researchers often criticize economic models that thusly that trust in exchange relationships-even assume exchange partners are inherently untrust- without legal and contractual governance... If you want to get a full essay, order it on our website: Ordercustompaper.com

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