The concept of trust has been the notion of the various researchers in social and management sciences (Hadjikhani and Hakansson, 1996, McQuiston, 2001, Friman et al., 2002). Trust is considered as the most important element for successful and long- term relationships (McQuiston, 2001) and the relationships are sine qua non approach (Easton and Araujo, 1992). Trust is essence of doing business with other parties in the markets. It is basically the trust that makes SMEs to believe that other firms will fulfil their commitment. Itami (1987) describes the trust is an intangible asset of firms. According to Ring and Van de Ven (1992), trust primarily is based the other party will to fulfil its commitments and that the relationship is equitable. The literature substantiate that the term trust has been used in the literate as early as in 1950s (Deutsch, 1958) and presumably the first attempt to investigate experimentally the phenomena of trust. The concept of trust has been studied in philosophy, economics, social psychology (Larzelere Hutson, 1980), management (Morgan and Hunt, 1994) and more specifically in marketing studies of business to business relationships (Kelly and Schine 1992, Blois, 1999).
To bring clarity in conceptualization of trust, this literature focuses on the definitions of trust considering relationship marketing in the b2b context, trust as mediating or moderating variable in qualitative research, trust in dyad interaction between the SMEs and actors, trust in b2b network context, the impact of trust on strategic decisions for business to business markets. The term ‘trust’ has appeared in majority
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of the papers published on the topic of relationship marketing. Trust exist when a firm believes its partner is honest and benevolent (Larzelere and Huston, 1980).
The trust in marketing literature has been studied for the developing countries conceptualizing ‘trust’ in western context (Andaleeb and Anwar, 1996, Batt, 2000, Lee and Dawes 2005). According to Abdul et al., (2012) customer trust is not only based on personalise trust sources such as customer dependence, product quality and service quality, it is also influenced by generalised trust sources. This research clearly reveals that trust in developing countries is based on relationship between traders and final buyers.
Trust is defined as ‘an attitude displayed in situations where a person is relying on another person is risking something of value, and /or a person is attempting to achieve a desired goal (Bialaszewski and Giallourakis, 1985:207). Various authors have encompass the definition of trust around the concepts of believe in other party’s reliability, confidence and cooperation in an exchange relationship. Such as Moorman, Zaltman and Deshpande (1992) define trust as ‘A willingness to rely on an exchange partner in whom one has confidence’. Anderson and Weitz (1990) describe trust as ‘One party believes that its needs will be fulfilled in the future by actions taken by the other party.’ Dwyer, Schurr and Oh (1987) describe it as ‘A party’s expectation desire coordination, will fulfil obligations and will pull its weight in the relationship’. Schurr and Ozanne, (1985) defines it as ‘The belief that a party’s word or promise is reliable and that a party will fulfil his/her obligations in an exchange relationship.
Trust has been studied in buyer-seller interaction in business to business context (Swan et al 1985, Hawes et al 1989, Moorman et al 1993, Doney and Cannon 1997,
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Andaleeb 1995, Abdul et al 2012) and antecedents of trust development with role of buyer-seller interaction (Swan et al 1988, Crosby et al 1990, Lagace et al 1991). Trust has also been studied in buyer-seller relationship for services (Parasuraman et al 1991, Berry 1995, Crosby et al 1990). According to Wilson (1995), trust is a fundamental relationship model building block and as such is included in most relationship models.
Stretching the literature to interpersonal/inter-organizational trust, it’s been found that ‘Trust’ has been studied in various business relationships such as relationship in marketing channels with channel members (Morgan and Hunt 1994), buyer-seller dyadic relationships (Doney and Cannon1997, Kennedy et al 2001). As the trust is pivotal for relationships, therefore relationships between SMEs and network actors are also based on trust. The relationships between the actors and focal firm exist at different levels in B2B networks. In business settings, three levels where the intermediary may mediate trust are recognised as interpersonal, intra-organisational and inter-organizational trust (Basu 1986). Trust inter-relates actors with SMEs and affects their courses of action (Hakansson and Snehota 1995). Trust has been studied at the inter-personal level by sociologist, psychologists, and economists (Buskers 2002).
Based on Wilson (1995) integrated model for buyer-seller relationships, the trust is considered as a relationship factor in dyad business network for this research work. As the trust is observed in dyad relationship between the actors therefore this research work focuses more on interpersonal trust and its influence on strategic decisions of SMEs within standardization/adaptation continuum. Trust is needed in an uncertain context where parties are interdependent, but trust only exists when one party can rely on another party to act in an expected way (Huang, 2010).
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Trust influence decisions such as higher trust would lead to higher confidence (George and John 2004). Confidence is a future-oriented concept and is important in marketing (Thorelli 1986:38). Trust among different nodes in the network (George and John 2004:03) we can also find –trust levels among different actors such as suppliers at different nodes.
2.5.1.1 Trust and strategic decisions in business to business networks Literature suggest that most of the research related to ‘trust’ has focused on the nature of the trust, antecedent of trust (Doney and Cannon 1997, Ganesan1994)and consequences of trust, inter-organizational trust (Heide 1994), trust in interpersonal dyads (Rotter, 1967, Schlenker et al., 1973), trust in public institution (Lewis and Weigert, 1985), factors affecting trust (Moorman, Deshpande and Zaltman 1993).Very limited research has been done on the effects of trust or trust outcomes on strategic marketing decisions and the influence of trust as relational factor on standardization/adaptation is yet to explore. Geyskens et al., (1996) found the effects of trust on commitment and continuity of inter-firm relationship. Considering the Moorman et al., (1992) definition of trust ‘ trust is the willingness to rely on an exchange partner in whom one has confidence’, the Ganesan (1994) describes the important aspect of definition is the notion of trust as belief, a sentiment, or an expectation about an exchange partner that results from partner’s expertise, reliability and intentionality.
Ganesan(1994:03), based on the definition of trust by Moorman et al., (1992) described two component of trust as 1)credibility, which is based on the extent to which the retailer believes that the vendor has requires expertise to perform the job effectively and reliably and 2)benevolence, which is based on the extent to which the retailer believes that the vendor had intentions and motives beneficial to the
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retailer when new conditions arise, conditions for which a commitment was not made.
Considering the above mention dimensions of the trust, credibility and benevolence encompasses the consistency, stability and control over the pattern of behavioural exhibit (Ganesan 1994) and this ultimately influences the strategic decision made by organizations. Ganesan (1994) focused on an individual’s trust on another individual in the network. According to Swan et al (1985), trust is built over time and trusting person, the buyer, assumes a risk. He further explains that trust building starts with a low-risk commitment and develops over time as the salesperson successfully fulfils a series of promises and commitment, hence considered commitment as antecedents for trust.
Trust has been studies in various business relationships such as relationship in marketing channels with channel members (Morgan and Hunt 1994, Geyskens et al.,1996, Andaleeb 1995, Geyskens, Steenkamp et al., 1999), buyer supplier relationships (Doney and Cannon 1997, Young and Wilkinson,1989), relationship with customers (Swan, Trawick et al., 1985) and relationship of industrial organizations with government (Buchanan, 1974). The relationships between customers and SMEs are based on trust; therefore trust is pivotal for relationships and hence enhances flow of information in business networks.