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Relational Quality: Managing Trust in Corporate Alliances
Management scholars have often argued that trust plays a key role in economic exchanges, particularly when one or another party is subject to the risk of opportunistic behavior and incomplete monitoring or when problems due to moral hazard or asymmetric information arise. These conditions are almost always present in the case of corporate alliances and joint ventures. However, one attribute of relationships--"relational quality"--is fundamental to the maintenance of good working conditions in two-party alliances where past experience and the shadow of the future play important roles. Relying on a growing body of theory and a number of case studies, the authors develop a framework for thinking about trust in dynamic and practical terms. They also provide recommendations for managing relational quality in alliances as a strategy for enhancing value.