Trusting organizations: The institutionalization of trust in interorganizational relationships

Abstract

Recent research on interorganizational trust has stressed the need to develop a deeper understanding of the multi-level nature of this construct. This article focuses on trust on different analytical levels in an interorganizational context, and on the hitherto underspecified connections between these. Based on an institutionalization approach, it revisits the classic question: (how) can organizations trust each other? To do so, we consider organizations as objects of trust and reappraise the transferral from interpersonal to interorganizational trust in ‘facework’ (Giddens, 1990). We also examine the conflicts and struggles of trust and power that can arise from this process between boundary spanners and their organizational constituents. Next, we consider organizations as subjects of trust in interorganizational relationships. We detail the institutionalization of trust and its reproduction on an organizational level, and how it can be transmitted to new generations of organizational actors, creating path-dependent histories of trust which are truly interorganizational. Taking up the theme of trust and power, we analyse ways in which the institutionalization of trust can entail that of power, too, and examine the implications of this from a critical point of view. We conclude that in interorganizational trust, both the subject and object of trust move across analytical levels, and further, that this movement demonstrates the significance of the organization as a distinct entity that can be both trusted and trusting.

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