Trust and Complexity in Vertical Relationships

The purpose of this paper is to enhance our understanding of intra-organizational trust in public organizations by studying interpersonal trust in both vertical and horizontal relationships from a bidirectional perspective. Previous research has focused on trust at a single level of analysis, ignoring influences from other organizational levels, which has led to gaps in our understanding of trust. In addition, few studies take a bidirectional perspective where a trustor is simultaneously a trustee and vice versa. Through a case study, we contributed to filling this gap by studying the antecedents of trust – ability, benevolence and integrity.

Over the past decade, trust has emerged as the central means of achieving cooperation in interorganizational relationships. Past empirical inquiries have largely focused on the role of trust within the context of vertical relations between channel members or service providers and their clients. Thus, little is known about the nature or the role of trust in horizontal relations. A number of interorganizational scholars suggest that the nature and the effect of behavioral norms such as trust may be widely different in horizontal versus vertical relationships. This study examines the effect of relationship form on organizational trust using data from a survey of 106 U.S. firms who have recently participated in either horizontal or vertical R&D alliances. The results of this survey indicate that participants in vertical alliances display higher levels of organizational trust than participants in horizontal alliances. In addition, while organizational trust enhances cooperation in vertical alliances, trust is unrelated to cooperation in horizontal alliances.