This paper generates insights into the establishment and maintenance of cooperative, trusting relationships in partnering projects between client and contractor organizations. For this purpose we first explore the concept of trust, and review the literature on trust in inter-organizational relationships. We describe how trust is related to risk, control and performance, and how initial conditions and expectations may lead to positive cycles of increasing trust or, in contrast, to negative cycles of decreasing trust. We confront this stylized theoretical description of inter-organizational trust dynamics with rich data from a project alliance in railroad construction in the Netherlands. We conclude that the initial conditions of this project alliance were conducive to trust, both in terms of opportunities and incentives. However, virtuous trust dynamics do not develop automatically, in particular in the construction industry that has a heritage of adversarial relationships between clients and contractors. The organizations in our case study took some deliberate actions to overcome these adversarial relations, like selection of key employees, increasing informal interactions between these employees and stimulating openness and transparency.
|Journal||Journal of Purchasing and Supply Management|
|Publication status||Published - 2011|