WHEN DOES TRUST MATTER TO ALLIANCE PERFORMANCE?
REKHA KRISHNAN Simon Fraser University XAVIER MARTIN NIELS G. NOORDERHAVEN Tilburg University
We examine how uncertainty moderates the trust-performance relationship in alliances, building on the distinction between behavioral uncertainty, which relates to anticipating and understanding partners’ actions, and externally caused environmental uncertainty. We argue that trust matters more to performance under behavioral uncertainty and less under environmental uncertainty. In data from 126 international alliances, the positive relationship between trust and performance is stronger under high behavioral uncertainty and weaker under …show more content…
The paper benefited greatly from the insights of our associate editor and anonymous reviewers. Any remaining errors are ours. This research was supported by the CentER for Economic Research at Tilburg University.
2003; Poppo & Zenger, 2002). Furthermore, interorganizational trust need not always improve alliance performance (McEvily et al., 2003). Indeed, researchers are beginning to recognize that the relationship between trust and alliance performance may be complicated and contingent on other factors. Thus, Carson, Madhok, Varman, and John (2003) argued that the effect of trust on task performance in vertical R&D collaborations strengthens with the clients’ ability to understand the tasks involved. Langfred (2004) argued that the effect of trust on the performance of self-managing teams reverses when individual autonomy is high. These studies suggest that the benefits derived from trust may magnify under certain conditions and diminish under other conditions. However, contingent reasoning has yet to be applied to the effect of