Trustworthiness as a Source of Competitive Advantage

Trustworthiness as a Source of Competitive Advantage Three types of trust in economic exchanges are identified: weak form trust, semi‐strong form trust, and strong form trust. It is shown that weak form trust can only be a source of competitive advantage when competitors invest 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 costly to imitate. The conditions under which strong form trust can be a source of competitive advantage are also identified. Implications of this analysis for theoretical and empirical work in strategic management are discussed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Trustworthiness as a Source of Competitive Advantage

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Publisher
Wiley
Copyright
Copyright © 1994 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
D.O.I.
10.1002/smj.4250150912
Publisher site
See Article on Publisher Site

Abstract

Three types of trust in economic exchanges are identified: weak form trust, semi‐strong form trust, and strong form trust. It is shown that weak form trust can only be a source of competitive advantage when competitors invest 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 costly to imitate. The conditions under which strong form trust can be a source of competitive advantage are also identified. Implications of this analysis for theoretical and empirical work in strategic management are discussed.

Journal

Strategic Management JournalWiley

Published: Dec 1, 1994

References

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