Trust is the social glue that holds business relationships together. But, how do managers decide whether to trust a potential partner outside their business? And how does culture influence this decision-making process? To answer these questions, the authors interviewed 82 managers from 33 different national cultures. And they found variations across cultures. For examples, managers from Western cultures said they generally assumed a potential new business partner would be trustworthy while those in East Asian cultures explained they carefully assess the competency of the potential partner. The variation is associated with two cultural factors: first, how much people are willing to trust strangers in everyday social interactions; second, the extent to which there is monitoring of social behavior and consequences for being caught violating social norms, which is often referred to as “cultural tightness-looseness.”
Trust is the social glue that holds business relationships together. Business partners who trust each other spend less time and energy protecting themselves from being exploited, and both sides achieve better economic outcomes in negotiations. But, how do managers decide whether to trust a potential partner outside of their business? And how does culture influence this decision-making process?
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