Antecedents of Interorganizational Trust: Joint Decision-Making, Cultural Adaptation, and Bargaining Power

Naoki Ando
Hosei University
Dong Kee Rhee
Seoul National University

ABSTRACT

The primary purpose of this study is to explore the antecedents of interorganizational trust within an international joint venture (IJV) context. In exploring how interorganizational trust is developed during the course of managing IJVs, we will look at fair action as a key factor in building interorganizational trust. Based on the existing literature, we propose the fair joint decision-making process, cultural adaptation and the fair distribution of bargaining power as being antecedents of interorganizational trust within the IJV context. After developing hypotheses about the relationships between these three antecedents and interorganizational trust as well as causal relations between the antecedents, an empirical study is conducted using a sample comprised of 109 IJVs located in Korea.

The findings show that perceived fairness in the joint decision-making process and the distribution of bargaining power directly affects trust-building between IJV participants; and also reveal the indirect effects of cultural adaptation on the development of interorganizational trust.

Keywords: Interorganizational Trust, Joint Decision-Making, Cultural Adaptation, Bargaining Power, Justice