Trust between the KIBS suppliers and customers is important and a prerequisite. (Hawes, Mast, & Swan, 1989; Millar, et al., 2008) Trust between customers and suppliers showed to be useful to limit opportunism (Rindfleisch & Moorman, 2003), to increase
customer loyalty (Agustin & Singh, 2005) and satisfaction (Selnes & Sallis, 2003), to enhance service usage (Maltz & Kohli, 1996), purchase decisions (Chaudhuri & Holbrook, 2001), and commitment (Jap & Ganesan, 2000), and to enhance more collaborative, cooperative, and interactive exchange relationships (Cannon & Perreault Jr, 1999; Hibbard, Kumar, & Stern, 2001; Jap & Anderson, 2003). In general trust in the C-KIBS supplier influences a customer’s future interaction with the supplier (Doney & Cannon, 1997) and is critical for the continuity of the relationship (Sharma & Patterson, 1999).
The development of such trust depends on the parties’ toleration of a certain level of uncertainty. (Millar, et al., 2008) One has to acknowledge that although there are several trust-building mechanisms (as will be resumed later) there will always remain a certain level of uncertainty due to the fact that C-KIBSs start delivering real customer value after
customer-side implementation and a certain time of running at the customer’s organization. The question emerges when the border is reached where the customer accepts the remaining uncertainty and his current level of knowledge and starts believing in the C-KIBS supplier’s information. Although there is no universally valid answer to this question one can come closer to the answer by inventorying the factors that influence trust generation between a C- KIBS supplier and a customer and prioritizing the different factors by their impact on the trust creation. This will be done in this subsection.
C-KIBS firms supply customers with technical and applicative knowledge along the entire supply cycle. (I. Miles, 2005) Because sensible and often tacit information and
knowledge are transferred (D. Ford, 2003) customer-supplier reciprocal trust is a key element in their relationships (Bagdoniene & Jakstaite, 2009; Scarso & Bolisani, 2011, p. 47). The need for trust is also enhanced by the uncertainty and accelerating rate of change because of new technologies and globalization. (González, 2003; Sethi, 2003) Trust in C-KIBS is not only essential because of its intangibility but also because of “(…) difficulties in arriving at a market valuation or price (…)” (Millar & Choi, 2011, p. 32) Hence, the demand for a
trustworthy environment is even bigger when supplier and customer are located in different countries with different regulations, rules and cultures (Furnell & Karweni, 1999), and in the online world because of the impersonal nature of the online environment (Millar & Choi, 2011, p. 28) that increases the uncertainty (A. Agarwal & Shankar, 2003).
In literature trust is defined and conceptualized differently depending on the scientific area of the researcher (Iyer, et al., 2006, p. 612) and “Different dimensions or morphs of trust have been also identified (…)” (Matopoulos, Vlachopoulou, & Manthou, 2006, p. 406) This multidimensionality consists of many subjective components such as: “(…)
dependability/reliability (confidence, loyalty, respect), honesty, competence, mutual
orientation (altruism, congruence, motivation), and friendliness (acceptance, benevolence and liking).” (Scarso & Bolisani, 2011, p. 49) As these components suggest, trust is mainly investigated as a personality construct, based on the interaction with people (Alvesson, 2000) and eventually depending on attributes of salespersons but its impact on the overall trust establishment is rather modest. (Swan, Bowers, & Richardson, 1999) Indeed it is not stipulated in literature that the in interpersonal relationships created trust does influence outcomes on an organizational level. Literature could not reveal the mechanisms by which individual actions affect organizational results. (Zaheer, McEvily, & Perrone, 1998, pp. 142- 143) Subsection 4.2.4 will come back to the issue of trust creation via interpersonal
relationships.
As there is no common definition of trust (Castaldo, Premazzi, & Zerbini, 2010; Iyer, et al., 2006), this paper will use the often cited definition of trust by Gambetta (2000) who defined trust “(…) as the subjective probability with which a player agent assesses that another agent or group of agents will perform a particular action (…)” (Scarso & Bolisani, 2011, p. 49) that is beneficial or at least not detrimental to the other party. Furthermore this definition will be enriched by several differentiations of trust. Anderson and Narus (1990) separated trust in an individual and trust in an organization, Plank et al. (1999) added trust in the product/service, and Nachira (2002) added trust in business activities in regard to
standardized practices for specific sectors and local contexts and trust in knowledge by establishing symmetric access to information. The importance of information and its quality was already described in the preliminary subsection. Grayson et al. (2008) distinguished between narrow-scope trust which is trust in an individual and trust in the organization and eventually “(…) affects only the relationship in which it has developed (…)” and broad-scope trust which refers to a customer’s trust in the broader social context in which a relationship takes place and eventually “(…) affects a customer’s behaviors and perceptions regarding not a specific relationship but rather a whole class of existing and potential relationships.” (p. 242) Trust in all these dimensions revolves around the concept that suppliers and the services “(…) fulfil their obligations [or functions] as understood by the buyer.” (Plank, et al., 1999, p. 62) [remark by the writer]
Trust can be encouraged by communication with customers (E. Anderson & Weitz, 1989; J. C. Anderson & Narus, 1990; Doney & Cannon, 1997), customer satisfaction
(Ganesan, 1994), experience (Bart, Shankar, Sultan, & Urban, 2005; Moorman, Deshpande, & Zaltman, 1993), customer support in appliance of the service (Kim, et al., 2010), and
interdependent relationships between customer and supplier (Kumar, Scheer, & Steenkamp, 1995), whereas interpersonal communication with customers (trust as a personality construct) is mostly stressed in literature. (Plank, et al., 1999, p. 61) However next to interpersonal trust the selling organization and its fulfilment of its obligations as well as the service and its expected functions are considered by the customer. (Plank, et al., 1999, p. 65)
Thus, to create a trustworthy environment organizations can propose an individual mix of rational assessments and social-psychological perceptions that result in different trust- building mechanisms (D. Ford, 2003; Panteli & Sockalingam, 2005) which consist of signals and indices:
• Institution-based mechanisms, based on warranty, certification, safety nets, or other formal structures;
• Deterrence-based mechanisms, derived from the presence of costly sanctions for opportunistic behaviours;
• Calculus-based mechanisms, grounded on the rewards that come from pursuing and preserving a relationship, and fear of punishment for the violation of trust;
• Knowledge-based mechanisms, relying on the information about involved parties, which also develops thanks to repeated interactions. The assumption is that the more information is available about someone, the more easy is to predict his actions;
• Identification-based mechanisms, characterised by mutual understanding (i.e. empathy and a sharing of common values) among parties to the point that each can effectively act in favour of the others;
• Personality-based mechanisms, emerging from reciprocally sensitive, thoughtful and concerned relationships.
The different types and dimensions of trust are not mutually exclusive and hence trust can rely on several mechanisms but its suitability depends on the interaction and relationship types between the involved parties. (Scarso & Bolisani, 2011, p. 50) In this task companies face the multi-dimensional nature of trust, and have to cope with different forms of trust, the type of service and the customer participation in designing the service as well as the
evolutionary stage of the relationship and the step of the service delivery process. (Scarso & Bolisani, 2011, p. 47) Hence, companies do not only face the challenge of implementing the
right trust-building mechanisms but also have to cope with the timing and the way how to implement them. (Scarso & Bolisani, 2011, p. 47) This makes it necessary for one
organization to “(…) ‘move first’ and show, communicate, prove, endorse some type of action that builds trust.” (Millar & Choi, 2011, p. 25) Especially in the initial stage of the customer-supplier relationship mutual understanding has to be created.
In the following subsection the author will shed light on the importance weightings of trust in an organization, its representative, the service and the environment and will indicate roughly which trust-building mechanisms come into play. The mechanisms and their
activation via different techniques will be investigated more deeply in section 4.4.
4.2.4. Trust in an Organization, its Representative, the Service, & the Environment