Introduction
The present paper looks at a very important issue present to businesses both locally and internationally: the role of trust in business success. The present research, as such, aims to bring forth empirical knowledge on trust from some research sources to provide a well-rounded picture of the degree of understanding of trust in different business contexts. The paper refers to research and present issues and reaches a critical conclusion on the issue of trust in business to business success.
Importance of Trust in Business
In business relationships that may be either international or local, the element of trust bears an important role in the business relations between two firms either big for small, between two countries, or two small companies. This is due to the case that trust is something required in every interaction in business (as elsewhere in life). In an organization, trust is required at all levels of operations: from hiring human capital to doing different marketing tasks or when a company is busy fulfilling commercial responsibilities. It is possible for a transaction to be both small and large; however, the role that trust plays in both these business transactions is, according to research done in relationship marketing, important enough and one of major status. Research suggests that trust is a greater determinant of external activities, e.g. ranging from advisory to sales, and internal activities, e.g., services. Content excellence is also highly related to the phenomenon of trust. At present, research on different business-to-business contexts has revealed useful insight. It also has aimed to gauge the role played by trust in different business interactions; perceptions and thoughts of different stakeholders about trust in business and its significance are two areas where present-day research is focused on. Besides registering inquiry in this area, the present-day research also aims to bring forth insight about how the element of trust can be best utilized for business success and strengthening business-to-business interactions. For this purpose evaluation of trust takes the prime space in today’s research focus. Additionally, research is also going on in understanding role of trust in different business contexts. And this is happening in business-to-business interactions both internationally and locally. There are quite a few models today that exist in better describing the role of trust and enhancing the element of trust in business interaction. Some of the prominent models of trust in business situations are Trust Equation, the Trust Creation Process, the Trust Principles, Trust-Based Selling and so on (Green, p. 1, 2009).
Understanding Trust in Business-to-Business Interactions
When it comes to the understanding of the role that trust plays in different business interactions, it should be noted that research suggests that there are only a limited number of companies that really do understand the importance and criticality of trust in business success. Hence, research suggests that today’s business interactions have much to learn about the value and need of trust at play in business to business dealings; and the same way more research is needed in the relevant areas especially in formalizing and sharing or critical elements of trust in business activities and processes which is a not much-explored area. Instead of moving toward a trust-based business model, today companies generally view trust embedded with organizational activities like corporate codes, organizational ethics, corporate governance, etc. Basins, few companies have really shown that they understand the role of trust and that it needs to be incorporated in business to business activities with high importance. Hence, understanding trust is a gray area still, something which is “far from complete even among people in the same function or organization”. There is much variance in the dealing of business and its connection to trust. Research suggests that one possible answer to this lack of understanding about trust is that there is trust and its related values vary from project to project and also from business to business interactions depending on nature of business and transaction being extended. For example, two people who work in a business location on cost-cutting operations (i.e. internal structure of a company) are not required to share high level of trust with each other simply because it is not the requirement of their job in this certain situation at least; contrarily, sharing high level of trust becomes extremely critical in a business setting where two personnel, from two different companies, are working together on developing a new product or ideas, etc. Yet, it is suggested that trust should be view as an interlinked phenomenon present in every business interaction (The Economist, pp. 2-5, 2008).
The Variable of Trust
The variable or factor of trust has been explored quite extensively in today’s business research; there are a number of other variables that play vital role in business to business success locally as well as globally. However, trust is something that takes the key place. This is due to the reason that today the global business needs and complexities of international trading have given the need to exercise trust all the more than in the past; henceforth, with the arrival of globalization it is now more hectic for companies to “develop and preserve trust within and between organizations”. Investing in trust is also regarded as a highly chancy business step in this very context. And the chance multiplies especially when an organization moves for business outside its national borders. Nonetheless, it is since the 1980s that global business alliances and coalitions started to emerge on the global horizon; it was with this trend that mutual trust and mutual dependence were regarded as a prerequisite for international business to business dealings. Some marketing research scholars have explored the role of trust at play in international business interaction from different perspectives; trust, then, became the “buzzword” in the 1990s and is reported to be an established term. It was around this very time that new insights were gained into trust. New models, paradigms, and approaches were thus introduced for local as well as international business to business success. However, these focused “more on trusting relationships such as exist between and within families and friends rather than legalistic, contractual relations (Ayios, p. 5, 2004). More research revealed more insight into the element of trust; and it was by the time of 1998 that trust was missing from certain business-to-business deals. This gave some countries a wake-up call and they rapidly built on this idea and a number of other countries still fell far behind addressing the issue of incorporating trust into their structures. In addition to above all, in today’s business contexts and research in a number of business-related fields, the elements of trust, its understanding, and the role it plays in different business activities: all these remain debatable topics from children’s vaccine to flexible working hours. Yet it is important to note that modern business to business situation today takes much interest in the roles played by trust for business success. Thus, some researchers have gone to the extent that they argue it is not practical to offer so much trust to the other party because it can also be harmful for an organization since this type of business practice would produce “unproductive views” about the rest of the world. Similarly, not trusting the partner at all or to a high level is not practical because it would lead to bitter results (Kern, p. 204, 1998).
Complexity with Trust in Business
Research on the involvement of trust in business interactions has told us that it is not it is important to evaluate the degree of trust in different business dealings. This has revealed in return that it is very complex to evaluate the level of trust especially in today’s growing complexity of trust. Although a number of authors have attempted to understand the role of trust in business dealings, it is surprising to note that there is little agreement among scholars as to what trust really means in business contexts. In this way it is usually defined with a few synonyms taken from daily life examples. Confusion with regard to its definition prevails in the literature of marketing research. Words like cooperation and confidence and other such expressions have yet increased the already existing confusion about trust and its understanding objectively. Thus, today more emphasis is placed on the importance of working out some effective models of trust that can give us satisfactory answers to a number of questions present in the understanding of trust (Mayer, et al., 709, 1995).
Trust in Global Business to Business Transactions
Today, globalization and increasing business-to-business transactions make the element of trust all the more important. It is regarded as highly imperative to consider trust at any type of business interaction worldwide. As more business-to-business deals take place between companies located in different parts of the world, trusting each other in certain areas is the only solution for both parties. This observation is made due to the fact that with technological advances, huge data and information are being exchanged by parties involved in the business. It is, thus, not practically possible for a client company to go into contractual laws for each transaction of data exchange they send and receive. On the other hand, integrity to keep a certain type of data and information for both the parties is quite essential for a number of business-related issues from both ethical and organizational viewpoints. Therefore, with this need, the element of doubt or skepticism has also multiplied and is raising high concerns among business organizations around the world. Because of skepticisms to trust each other, companies in global interactions apply the most possible resources for contractual formalities so that trust can materialize through paperwork and other legal ways. This, however, has a pressing impact on the overall business volume done internationally. According to research, the present volume of business activities can be much more than what it is now; it is due to the high transaction cost that companies put in to ensure enough strength in the legal framework. If trust can be built as a binding force between two parties in international business-to-business interactions, the volume of business can grow to higher level. There are three levels on which the blend of trusting each other between two companies can yield highly productive results in business activities in global contexts: these are contact, contract, and control. Thus it is important to work at these three levels so that more productivity can be possible in international business-to-business interactions (Ensuring Trust, 2008).
Conclusion
There is more research needed to understand the importance and role played by trust in different business contexts. More importantly, there is need to understands various outlooks of the element of trust in business objectively so that it can be defined and practiced by all parties involved in different business contexts. Marketing research has made it possible to lay down some useful insights on trust, its significance in business, and its growing need. However, international business deals have made the issue more complex and one that needs to be revisited because of increased complexities in business due to huge pressure of globalization from different walks of life. This is positive to note that extant research has covered much that can be used as the basis of trust; therefore, it is hoped that future research will give more on the present understanding of trust and international and local business to business deals can be better executed.
Reference
Ayios, A. (2004). Trust and Western-Russian business relationships. Published by Ashgate Publishing, Ltd., ISBN 0754636542, 9780754636540.
Ensuring Trust (2008). Ensuring trust within global business transactions. Security International. Copybook Solutions Ltd. Web.
Green, C. H. (2009). Trust in business: the core concepts. Trust Advisor Associates. Web.
Kern, H. (1998). Lack of trust, surfeit of trust: some causes of the innovation crisis in German industry’. In Lane, C and Bachmann, R (1998). Trust within and between organizations: conceptual issues and empirical application, Oxford: Oxford University Press.
Mayer, R. C., et al. (1995). An integration model of organizational trust, Academy of Management Review, 20 (30).
The Economist (2008). The role of trust in business collaboration. An Economist Intelligence Unit briefing paper sponsored by Cisco Systems. The Economist Intelligence Unit. Web.