Interorganizational trust production contingent on product and performance uncertainty

Abstract

How do organizations build trust under varying degrees of uncertainty? In this article, we propose that different degrees of uncertainty require different bases of trust. We distinguish between three different forms of trust production (process-based, characteristics-based and institution-based) and develop hypotheses regarding their relative effectiveness under low versus high levels of product and performance uncertainty. Using survey data on 392 interorganizational buyer-seller relationships, we find support for our position that a high degree of uncertainty favours process-based trust production, whereas characteristics-based trust production is relatively more effective when uncertainty is low. The effectiveness of institution-based trust production is not significantly affected by uncertainty. We derive implications for organizational trust production under different degrees of uncertainty, which should encourage new research on trust.