Inter-Organizational Trust: Definitions, Elements and Operationalization

: Trust management represents a relevant challenge for managers in contexts where the adoption of behaviours that prioritize the satisfaction of individual objectives is prevalent over behaviours directed towards social goods. In this theoretical essay, we propose a review of seminal and contemporary authors on inter-organizational trust. Structuring elements of this phenomena were identiﬁed, which allowed the analysis regarding the relevance of its contribution to inter-organizational relationships based on trust. In addition, we reviewed some of the main authors who discuss how to operationalize trust in relationships between organizations. In this article, built in the format of a theoretical essay, it was possible to point out some paths to a theoretical model on inter-organizational trust.

As companies engage in cooperation networks to compete more efficiently, a dilemma gains space.In their efforts to improve their gains and reduce their costs, organizations tend to put their individual interests before those of their partners.Hence, governance mechanisms are put in place to reduce opportunistic behaviour.However, formal governance mechanisms have several limitations in this regard.Due to the dynamic and complexity of the globalized competitive environment, the bounded rationality of the parts, and the imperfect information for decision support (SIMON, 1986), it is very difficult to foresee future disagreements and formalize ways to prevent or treat them.erefore, although less manageable, informal governance mechanisms are far more efficient and are attracting more interest.Lane (2002) goes further and claims that it is not possible to operate in this environment without interpersonal and/or interorganizational trust.
It is recognized among scholars that trust helps to reduce transaction costs and promotes the effectiveness and efficiency of relationships.A special issue of e Academy of Management Journal about interfirm collaboration editorially indicated the important role of trust in cooperative relationships: "(…) trust seems fundamental.(…) e study of trust and its impact on cooperative relationships at all levels may be a particularly fruitful area of future research" (SMITH; CARROLL; ASHFORD, 1995, p. 15).e concept of trust has been extensively researched due to its recognized role in marketing and business in general.Nevertheless, as a complex, multidimensional construct, it has a variety of imprecise meanings in daily language.Cultural differences reinforced by competition in the global market makes it even harder to define and operationalize it.
On the conceptualization of trust, both theoretical definitions and forms of operationalisation are important.Dissonances can eventually be found between them, and we understand that they also contribute to our understanding about how trust has been considered among scholars.Two examples may help illustrate this point.First, Anderson and Narus, 1990 (apud LUSCH;O'BRIEN;SINDHAV, 2003, p. 251) mentioned the following definition of trust: "A firm's belief that another company will perform actions that will result in positive outcomes for the firm as well as not take unexpected actions that result in negative outcomes".With focus on the "action", this definition enhances the competence dimension of trust, while ignoring the goodwill dimension.In another example, Kwon and Suh (2004) used two different definitions of trust in their theoretical background: "trust is frequently defined as a willingness to take risk " and "trust exists when one party has confidence in an exchange partner's reliability and integrity" (p.5).ey used, however, a third one for operationalisation: "trust exists when a firm believes its partner is being honest and benevolent" (p.8).In this case, only the definition used for empirical application was considered.erefore, operationalisation items are important elements to understand how trust has been considered.
To help clarify these issues, this paper reviews and discusses some of the relevant aspects of interorganizational trust and dra some ways that may help to elaborate the idea of this construct.us, the research question that oriented this study, was: "what are the definitions and main elements of the interorganizational trust and how it may be operationalised?"ispaper has the form of theoretical essay and begin with the review of the most important authors that analyse inter-organizational trust.Aer this, we discuss some of its main dimensions to help understand how it may be operationalised.Finally, in the conclusions, we are discussing theoretical elements that are relevant to a framework of the organizational management based on the inter-organizational trust.

INTER-ORGANIZATIONAL TRUST
e first study that considered trust as its main variables was MacLachlan and Spence (1976) from the Journal of Retailing.e article presented a definition of trust relative to benevolence, i.e. "expectation [of] favorable outcomes [from the trustor to the trustee], even when [the trustee] is le uninfluenced".eir operationalization items, however, included dimensions that went beyond those on the concept, such as fairness, honesty, creativity, flexibility, authority, power and satisfaction with the outcomes.
Following this, Moorman, Zaltman and Deshpandé (1992) defined trust as "A willingness to rely on an exchange partner in whom one has confidence".is concept was later used by Moorman, Deshpandé and Zaltman (1993) and Morgan and Hunt (1994).By far, the article by Morgan and Hunt (1994) was the most cited in the literature concerning inter-organizational trust.Interestingly, this concept seems somewhat tautological, as "reliance" is the ability to be trusted and "confidence" is the belief that you can rely on someone (Oxford English Dictionary).
e concept evolved, and other authors contributed with a diversity of related constructs.Andaleeb and Anwar (1996) were the first to consider the concept of trust separately in the organization and in the individual levels.Later, Zaheer, McEvily and Perrone (1998) specifically focused on these two levels of the construct while relating them to performance.ey concluded that inter-organizational trust provides better chances for the building of competitive advantage than the individual level of trust.Dyer and Chu (2003) also adopted the concept of Zaheer, McEvily and Perrone (1998).Beyond reducing transaction costs among automakers and its suppliers, they enhanced the role of trust in leading to a recursive behaviour: acting for value creation and building stronger trust.Fang et al. (2008) investigated trust across individual and organizational levels of analysis, identifying three distinct levels of trust: between collaborating firms, between a collaborating firm and its representatives, and among the members assigned by both firms to the collaborative entity, or "coentity", as they called.e authors found that these three levels have distinct forms of effects.
Trust was also viewed in relation to governance mechanisms by many different perspectives.It was considered by Williamson as a characteristic of personal relations, not attributed to organizations or economic entities.However, since the first publications of the Transaction Costs eory, governance mechanisms have been extended from its primary hierarchy-market dimensions (WILLIAMSON, 1979) to informal ones, including mechanisms such as mutual dependence, trust, parallel expectations, joint action and procedural fairness.Dyer and Chu (2003) considered trust as a unique governance mechanism because the investments made by partners to build trust frequently create economic value in the exchange relationship beyond minimizing transaction costs.Lui and Ngo (2004) also considered it "an alternative control mechanism that is informal and adaptive", clearly referencing it as a governance device.
Levels of trust were explored by Barney and Hansen (1994), as they discerned between semi-strong trust and strong trust.Semi-strong trust occurs when "parties to an exchange are protected through various social and economic costs imposed by governance devices", while strong trust emerges despite of governance mechanisms.Strong trust, they suggest, depends on the values, principles and standards of behaviour internalized by parties.One could also argue whether it may be included in the definition of social governance.at is, moral and ethical behaviour, taken from an anthropological perspective, are evolutionary forms of exclusion of individual actors from the group.As Wieland (2001, p. 83) puts it: "the governance ethics of the firm is the theory of the comparative analysis of a moral-sensitive design and communication of governance structures for specific economic transactions via cooperation".If the appropriate governance devices are in place, the cost of opportunistic behaviour will be greater than its benefit and it will be in the rational self-interest of exchange partners to behave in a trustworthy way (HILL, 1990 apud Barney;Hansen, 1994).At least, as Ostrom et al. (2010) pointed out, this calls the attention for a deeper understanding of informal governance as a research priority in services.
e operationalization of trust was also reason for distinctive views.Dyer and Chu (2003) argue that "trust" and "transaction costs" are difficult to operationalize, referring to a statement from Williamson (1979).However, that was not exactly the point of Williamson: "By contrast with theories of economic organization that yield few refutable implications and/or are very nearly nontestable, transaction cost economics invites and has benefited from empirical testing."(Williamson, 2007, p. 17).Also, Geyskens, Steenkamp and Kumar (2006) say that "despite what almost 30 years ago may have appeared to be insurmountable obstacles to acquiring the relevant data, today transaction cost theory stands on a remarkably broad empirical foundation."It is interesting to note that among the articles that propose operationalization items for trust; none of them approached the concept qualitatively.Given the variety of countries on which it was examined, it seems necessary to better understand cultural differences regarding in the understanding of trust.

METHOD
e main journals in organizational sciences were searched for the keyword "trust".We excluded journals classified with the subject "CHARITABLE uses, trusts and foundations (Law)", "REAL estate investment trusts", "PSYCHOLOGY" and from the journals "Real Estate Economics" and "Entrepreneurship: eory & Practice".In the sum, 46 articles were found on the following journals:

Number of articles per journal
Elaborated by the authors.
As shown in the preceding table, marketing periodicals provided most of the articles concerning trust, probably due to its focus on the relationship between organizations and their clients.Also, the following graph represents the number of articles per year and shows that there was a higher interest on the subject in the period 2000-2005, declining thereaer.

Dimensions of trust
e main constructs cited on the literature are listed below: confidence, honesty and integrity, benevolence, vulnerability and risk, and other marginal constructs.Construct definitions were based on the Oxford English Dictionary and adapted to the management environment.Items that made a direct reference to trust were not brought into this study, because it would foster redundant interpretations of the concept.

Confidence
e confidence dimension of trust was found as related to reliability, competence and predictability.Most of the authors depict confidence as a quality of the other to behave in the same way as is expected and, so, being able to provide a service or product, as demanded from him.About reliability, authors have agreed with the position that it refers to a predisposition of the partner to meet all conditions that have been previously negotiated and avoid opportunistic behaviour.Competence is described in the literature as a set of technical conditions, such as knowledge and previous experience that enable partner to perform job as demanded.As for predictability, it was conceptualized as a determined pattern of behaviour, observable from previous decisions of the partner and that enables one to predict the way how this partner thinks and/or behaves.Predictability is also considered very important for inter-organizational relationships.Table 2 presents the synthesis of these concepts and the related literature.

Honesty and Integrity
Honesty and integrity are frequently found in the scientific literature as related with trust.As may be seen in the summary table, these are behaviour aspects that a person develops during his life and depends on its personal beliefs and values/ ethic.

Honesty and integrity
Elaborated by the authors.

Benevolence
Benevolence represents a characteristic that derives from the individual and/or organizational values and is considered essential to the establishment of a trust-based relationship.is characteristic appears mainly in situations that changed, when favourable conditions may arise for opportunistic behaviour.Several authors pointed out a combination of benevolence and competence as being complementary qualities of a partner, in order to believe that in determined situations, marked by uncertainty or low levels of competence/ ability, this partner will take a decision that will generate positive outcomes for us.It is possible to argue that benevolent action may be rare in actual competitive markets, except in non-for-profit organizations.In the market economy, an apparent benevolent action is probably motivated by the expectation of long run returns to be capitalized over the present action.In this context, goodwill, integrity and honesty seem to represent more adequate dimensions than benevolence, since their core concept is related to the presumption that the trustee will not intent to harm the trustor, that is, behave opportunistically.

Vulnerability and Risk
Vulnerability is conceptualized by some authors as a condition of dependence on the partner, to provide a determined demand for a service or a product.In this situation, opportunities may arise for a partner to appropriate himself/herself of more benefits than those previously negotiated.Risk was considered by most of the authors as an aspect associated to trust-based relationship.From this point of view, partners involved in this kind of relationship must be aware of the risk and be prepared for it.All kinds of relationships will need investment of the partners involved.Investment means not only money, but, also, time, energy, patience, knowledge transfer, among others.erefore, partners must evaluate the pay offs of a relationship, before investing in it.

Other Marginal Constructs
Some of the constructs found in the literature on trust were not so representative of the main body of research but also deserve some attention and discussion.ese constructs are grouped in this section and listed below: • Loyalty and commitment: these constructs were not frequently found as related to trust, but some authors understand that trust may lead to its manifestation.at is, loyalty and commitment are usually taken as a dependent variable of trust.• Trustworthy: it was considered by most of the authors as a partner's characteristic based on manifested previous behaviour.By behaving trustfully, a partner will have better conditions to establish a relationship network and achieve positive outcomes.Trustworthiness is a characteristic of the trustee that makes him/her more susceptible to be trusted, influenced by reputation.Although related to trust, trustworthy can be considered as a separate dimension.More specifically, it may be an antecedent of trust.However, the focus of the study object must be considered when studying trustworthiness and reputation as antecedents of trust.As the concept of trust includes the ability of the trustee to perform a certain action, so should trustworthiness and reputation.at is, trustworthiness and reputation for what?• Creativity and flexibility: Few authors associate creativity and flexibility to trust, but MacLachlan e Spence (1976) point out that when a relationship based on trust is established, the environment becomes adequate for innovation.e reason for this would be that errors are better understood and tolerated, even welcomed as opportunity to learn more.• Authority and power: these concepts may be related to trust, due to its association with dependence relations.For example, some relationships based on trust may imply the transference of authority and power to the partner, in order to give him/her conditions to perform his job.• Satisfaction: few authors refer to satisfaction as an aspect of trust-based relationships.In these situations, satisfaction is usually associated to positive outcomes, that is, a dependent variable.
• Reputation: reputation may be considered a condition of individuals or firms that present a set of characteristics that enable them to be well evaluated by most of the partners and stakeholders.Reputation was considered both as an outcome of trust and part of trust itself.Andaleeb and Anwar (1994, 1996, 2004, 2005) considered reputation as a separate construct, moderating the relation between trust and action.Reputation was also considered an antecedent of trust by some authors (e.g.Barney;Hansen, 1994;Kwon;Suh, 2004;Walsh;Beatty, 2007).For example, Kwon and Suh (2004) concluded that "the partner's reputation in the market (…) seem to heavily influence the level of trust" (p.10-11).Walsh and Beatty (2007) found reputation to be a separate construct and a strong antecedent of trust.
In order to make the concept of trust more comprehensible and establish possible relations between its dimensions, the summary table below was elaborated, pointing out dimensions of the inter-organizational trust.

Other constructs
Elaborated by the authors.
e main dimensions of trust seem to be integrated in the suggested outset: trust appears to be based on the actual trustor expectancy of a possible future action from the part of the trustee, which he/she will not be able to control.is future action may provide unfavourable outcomes for the trustor, due to the asymmetric investments in the relationship.It's a risky and vulnerable moment to the trustor, whose actual belief is based on two dimensions of the knowledge that he or she has from the trustee: 1) of his/her will to produce a favourable outcome, not harming the trustor and 2) his competence to perform that action.e trustee's desire to perform that action can be influenced by his/her honesty (in which case the trustee might even incur in costs to perform the action), or the trustee's inclination to opportunistic behaviour.is outset may be synthetized in the following dimensions of trust found in the literature: 1.
Trustor's vulnerability: the trustor is in a risky situation as the outcomes of trustee's actions can bring him/her loss (financial, emotional, etc.); 2.
Trustor's perceived competence of the trustee: the confidence the trustor has about the trustee's competence to perform that action; 3.
Trustor's perceived honesty of the trustee: the perception of the trustor that the trustee has integrity and moral values similar to his/hers.
Having these dimensions in mind, it is possible to suggest the following definition for trust: Trust is the belief that the trustee will act competently and honestly on an unpredicted situation whose outcomes can produce harm to the trustee.Some operationalization items found in the literature seem to appropriately capture these dimensions, for example: • "If I or someone from my department could not be reached by our researcher, I would be willing to let my researcher make important research decisions without my involvement" (Moorman;Zaltman;DeshpandÉ, 1992;Moorman;Deshpandé;Zaltman, 1993); • "We are hesitant to transact with Supplier X when the specifications are vague" (reverse scored) (Zaheer;McEvily;Perrone, 1998).
e first item refers to an important decision that has to be made without the monitoring (involvement) of the trustor.In that case, if the respondent agrees to the statement, the trustor must trust both in the competence of the trustee and its honesty.e fact that the decision is important implies that unfavourable results can be an outcome, either in the form of opportunity costs or financial loss.e second item is reverse scored and describes a future scenario with uncertainty (with vague specifications) and the feeling of discomfort that it may cause in the trustor.In this case, the trustor must trust its partner on future transactions; otherwise he/she can take the opportunity of the vague specifications for his/her own benefit.Other operationalization items can also be developed using the proposed concept.

CONCLUSION
Inter-organizational relationships based on trust are increasingly seen as a sine-qua-non condition for longterm relationships.ese conditions, once fulfilled, may reduce costs and ensure positive outcomes for all partners involved.However, both organizational managers and researchers point to several difficulties and obstacles in the construction of such relationships.
With the objective of contributing to the debate, a bibliographical research was carried out, based on seminal and contemporary publications, through which it was possible to identify the set of aspects that can make up the dimensions of inter-organizational relationships based on trust.rough a reflective and comprehensive analysis, possible links between the identified aspects were established and a conceptual framework was proposed.
is revision on the concept and operationalization of trust is expected to contribute on future researches on the theme.Out of a synthesis on the literature, a definition of trust was proposed, and operationalization items may be developed.Remarkably, it's suggested that trust be qualitatively investigated in different cultural scenarios, since cultural differences can point new directions on its dimensions.New forms of observation can also be an outcome of this endeavour., v. 9, n. 2, p. 141-159, 1998.

FIGURE 1
FIGURE 1Number of articles per yearElaborated by the authors.

TABLE 2 Confidence
Elaborated by the authors.

TABLE 4 Benevolence
Elaborated by the authors.

TABLE 5 Vulnerability
Elaborated by the authors.

TABLE 6
ZAHEER, A.; MCEVILY, B.; PERRONE, V. Does Trust Matter?Exploring the Effects of Interorganizational and Interpersonal Trust on Performance.Organization Science