The Nature of Trust in Virtual Entrepreneurial Networks

Introduction

The purpose of this article is to explore the nature of trust in virtual networks. It is a theoretical study which attempts to use the extensive body of literature about trust to develop an understanding about what sorts of trust we might expect to find in virtual networks. This topic is particularly relevant for entrepreneurship on several counts. First, we note how entrepreneurship is no longer seen as an individualised practice (Hoang & Antoncic, 2003; Dodd & Anderson, 2007; Anderson & Starnawska, 2008), and thus signifies the importance of networks for extending entrepreneurial resources (Jack et al., 2008). Secondly, trust and morality play the critical role in social capital formation within these entrepreneurial networks (Bagnasco, 2001; Anderson et al., 2007; Anderson & Smith, 2007). We must also note how increasingly entrepreneurship crosses time and space (Anderson, 2005; Chorev & Anderson, 2006; Sarason et al., 2006), and cultures (Li et al., 2003; Dodd & Anderson, 2001; Anderson et al., 2000), with close customer relationships remaining paramount (Anderson & McAuley, 1999; Merrilees, 2007). Increasing these networks as virtual reflects a response by entrepreneurs to the parallel growth of internationalization and ICT (Harbi et al., 2009). Globalization implies an increase in on-line trade and general e-commerce (Oh et al., 2009), far places becoming closer, so that very few businesses operate without some international linkages; the internationalization of suppliers, customers or collaborators means that the organizational context of many entrepreneurial businesses is now global (Ka Young et al., 2009). This globalization and the adoption of e-commerce have been facilitated by the increasing sophistication of communication (Eastin, 2002), so that physical presence seems no longer necessary. Thus, we see the emergence of the new phenomenon of virtual networking. However, despite the growing popularity and use of virtual networking, we know very little about its operation. In particular, the role of trust appears to play a significant role in the operation of an entrepreneurial virtual network, but there is limited research conducted in this area.

To begin answering the research question “What types of trust can be found in entrepreneurial virtual networks?”, we analyse the concepts of virtual network and trust. Then, we proceed to review trust literature from a range of angles, and conceptualise a relationship between virtual network and various types of trust.

The extensive trust literature is complex, reflecting the problems inherent in the deceivingly simple concept of trust itself. However, previous studies can be usefully categorised to take into account the dynamic nature of trust (Jack et al., in press). Seen as a dynamic phenomenon, it becomes clear that we can employ a range of dimensions, definitions and descriptions of trust to show the emergence of trust as process. In this way, we can argue that trust is a necessary condition of an effective virtual network. The practical aspect of the article, and our contribution, lies in the development of a conceptual framework, which, in combining and synthesising the literature, shows how robust and enduring trust can be as a quality rooted in affective ties.