Role of Time in Development of Trust within Hi-Tech SME Business Relationships

Role of Time in Development of Trust within Hi-Tech SME Business Relationships

Khurram Sharif, Salaheldin Ismail Salaheldin
DOI: 10.4018/978-1-4666-0288-5.ch008
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This study investigated the function of time (as a moderator, determinant or quasi moderator) within hi tech Small to Medium Sized Enterprise (SME) downstream (i.e., customer) trust-based relationships. A four antecedent (i.e., competence, transaction specific investments, flexibility and coercive power) research model was developed to represent trust within the SME business-to-business (b-to-b) relationships. Time was conceptualized chronologically as duration of a relationship in years. The model was empirically tested with 117 respondents from the UK Original Equipment Manufacturing (OEM) sector. The research outcome supported a significant and positive moderating effect of time on competence to trust and flexibility to trust pathways. However, time had a negative moderating yet significant effect on the association between coercive power and trust. Correlation between Transaction Specific Investments (TSIs) and trust was significant but time showed neither moderating nor deterministic effect on the TSIs to trust link.
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Literature Review

Most downstream studies have taken a cross-sectional/transverse approach where a limited number of interactions (i.e., largely a snap shot view of the relationship) is afforded and hence effect of time, as a continuation of a number of interactions from the past to the present and into the future, is largely ignored (Dion, 1991). A dynamic phenomena such as a relationship whose very existence is determined by series of experiences and their subsequent outcome, requires a longitudinal treatment where type of trust (rational or affective or behavioral or cognitive etc.,) within different relational phases is charted against time (i.e., relationship length).

Predominantly within time and business relationships research, interactive approach has been taken where exchange environment has been largely portrayed as a network of interdependent business actors (Thomas, 2008; Halinen & Tornroos, 1993). Within this context, study of time has been largely linear where emphasis has been on the progression of relationship through frequency and extent of interactions revolving around general variables of the relationship. Therefore in majority of studies a limited orientation of time has been adopted and consequently its precise impact on a relationship determinant (such as trust, commitment, satisfaction, cooperation etc.,) has been rarely investigated.

Ganesan (1994) explored long term orientation (LTO) within upstream and downstream trust based relationships. By contrasting short-term orientation (STO) with long-term orientation (LTO), Ganesan (1994) achieved a research outcome in terms of whether trust is affected by time orientation. However in addressing the time question, Ganesan (1994) falls short of explaining influence of time (i.e., deterministic, moderating or otherwise) on relationships and only provides involved actor’s perception of time (i.e., trust relationship is viewed within short or long time frame). For example TSIs are suggests as significant determinants of LTO but the impact of time on TSI itself (e.g., does TSI with time increase or decreases or is independent of time) is not explained.

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