The emergence of trust: Social figuration in supply networks

Trust is an essential governance mechanism in present-day supply networks, where many independent parties have to coordinate their activities. It is often assumed that trustful behavior at least partly depends on the inner dispositions of actors. Other theories suggest that this behavior is an emergent property of the supply network, generated by the interactions between the actors in the network. Half a century ago, the social figuration theory of Norbert Elias was the first formulation of such a theory. This research tests this emergent property theory in a series of simulation-based thought experiments. A generic agent-based model of buyer-supplier interactions in a build-to-forecast supply chain is used as a dynamic hypothesis to test this theory. The inner dispositions of the actors towards trust and opportunistic behavior can be changed here. Current trust levels are influenced by these inner dispositions, but are also changed by the perceived behavior of the other party. Trust levels of the actors also determine their behavior. In the simulation this creates vicious or virtuous cycles of mutual trust and performance, so called relationship spirals. Model analysis shows that beyond a certain level of external volatility, the development of trust on both sides no longer bears any direct relation to the inner dispositions of the network parties. This confirms the dynamic hypothesis. It also again establishes the strength of Elias’s original social figuration theory.