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Trust Between Organizations
Defined
Mutual trust is a shared belief that you can
depend on each other to achieve a common purpose. In a
strategic partnership or a
strategic alliance, "where your purpose is to get results that exceed
what a transaction can do, mutual trust also means you can depend on
each other to adapt as necessary. That involves more than keeping promises,
because it entails changes that can't be planned in advance."1
Enhanced Emphasis on Trust
in the New Economy
Trust
– both between individuals and organizations – is at the core of and
delivers
significant benefits in today's complex and rapidly
changing
knowledge economy.
New Economy: Key Features
It is one of the most efficient mechanisms for
governing innovative business partnerships. With trust as a foundation, the
companies – or
teams
within a company – can share their know-how to achieve
synergy
– results that exceed the sum or the parts.
"When both parties are known to be trustworthy,
an expectation of loyal behavior exist for the parties as a cooperative
arrangement is formed. Because of this expectation, firms are able to
allocate fewer resources to monitor and control the alliance. In contrast,
greater amounts of resources are required to monitor and control an alliance
formed with a firm whose previous behavior suggests it can't be trusted."3
All-Encompassing
Effort
Trust is not a matter of blind faith. Your must
construct it – step by step. Further, building trust between organizations
is all-encompassing. It involves your
people,
corporate
culture, politics,
practices, priorities, and structures.
Inspiring Culture: 5 Elements
Interpersonal Relationships
Interpersonal relationships are a critical
element of trust between organizations. They make the connection. Business
partnerships lives through people – this is how all the parts come together.
"Deep trust – the essential ingredient for creating the most value and
solving the toughest problems – grows as interpersonal relationships
strengthen."1
Trust as Competitive
Advantage
Trustworthy firms have
competitive advantage
when it comes to forming and using cooperative strategies. "One reason for
this is that it is impossible to specify all operational aspects of a
cooperative arrangement in a formal contract. Confidence that its partner
can be trusted reduces the firm's concern about the inability to control or
influence each operational aspect of an alliance through a contractual
agreement."3...
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