Developing Client-Contractor Trust: A Conceptual

Framework for Management in Project Working

Environments
Dr Hedley Smyth
2003
School of Construction and Project Management
The Bartlett
University College London

Abstract
The paper focuses upon trust as a key dimension for reducing adversarial relations in
project working environments. It is argued that trust can both be facilitated and
managed in a proactive way. Underpinned by a theoretical and philosophical
argument that trust and accountability in the client-contractor relationship can be in
conflict, a framework is developed for understanding the dynamics of trust and as a
basis for management in practice in ways that communication and performance are
enhanced so that accountability it a product of trust rather than eroding trust.

Key words: Collaborative Capital, Communication, Partnering, Relationship

Management, Trust

Introduction
There has been considerable business emphasis placed upon the development of
collaborative relationships across companies in recent years. Construction is no
exception. The presence of trust in the relationships has been cited as central to
successful business and project outcomes (NEDC 1991, Partnership
Sourcing Ltd. 1994, Latham1994, Baden-Hellard 1995, European Construction
Industry Institute1997, Egan 1998). Trust is central to the development of non-
adversarial business relationships, and hence provides fertile ground for the
development of practices such as partnering, strategic alliances and supply chain
management.

Those citing trust as important use it in a ‘common sense’ way. There is an

assumption that it is understood what trust is, and so, it can be recognised when it is
present. Although, in practice it may be the absence of trust that is most noticeable.
This paper raises the issue, “Can trust be developed?” In other words, is trust
something which managers can identify, facilitate and manage its form and
development? This is an important question given its centrality to successful
outcomes in project working environments for client, contractor and other parties. To
address this question it is necessary to define and understand trust that goes beyond
the ‘common sense’ usage. In that way managers may become more aware of the
dynamics and parameters of trust.
The aim of this paper is to address these issues and develop a framework of trust,
which provides an understanding of the dynamics and parameters. This will act as a
basis to explore how trust may be developed and hence managed within an enterprise
and across the client-contractor interface.

The objectives of this paper is to use a framework of trust to:

1. Understand the conceptual elements that make up trusting relationships

2. Understand the operation of trust at the client-contractor interface
3. Provide a context to develop ways of evaluating and building trust between the
parties.

The next section provides a definition of trust within a philosophical and literature
review. The framework of trust is then set out, followed by an exposition of each
element of the framework. Finally, the framework will be evaluated in the context for
analysing the capacity to build trustworthiness within an enterprise to facilitate the
relationship between client and contractor.

Definition and Review

Defining trust is important in determining the dynamics and parameters of application
and operation in practice as well as for a workable framework. For example, profit is
vital to a business and it is the bottom line of the balance sheet. Profit is well defined.
It can be analysed in terms of its mass, in relation to turnover as a profit margin, in
terms of return on capital employed and so on. This helps management concentrate
decisions to effectively manage operations.

Trust needs to be similarly understood in order to manage relationships between

parties, especially in areas of uncertainty, characterised by project working
environments. The greater the level of uncertainty the greater is the need for trust.
Yet it is often in these circumstances that trust is minimal and adversarial
relationships come to dominate. Fear is ‘an enemy’ of trust. Fear means that one
party is suspicious that the other will take advantage of their vulnerabilities, using
circumstances to their gain and therefore at the expense of the other party. The
Confucian requirement for being in command is threefold: weapons, food and trust.
Trust is the most valuable of the three for "without trust we cannot stand". In
construction the requirement can be paraphrased as technical capacity, resources and
trust. This is the requirement for internal support, the management power base.
Internally trust is a form of “collaborative capital” (cf. Dawson 2000). The corporate
investor or manager can expect a return on the internal investment, hence yielding
external benefits, that is a transfer from client-contractor relationship to the bottom
line of the balance sheet. That is the positive side where trust as internal collaborative
capital lowers transaction costs (Smyth 1999, c.f. Williamson 1985).

Trust is needed internally in order to stand, but against what? The ‘enemy’ of trust is
fear. Fear focuses upon the external party. It is the uncertainty and associated risk
that is external, invoking fear concerning internal vulnerability and insecurities.
However, this does not imply that strength and security is all that is needed. It is only
in the face of vulnerability and insecurities that being able to trust the other party is
vital:

Where we have guarantees or proofs, we don't need to trust. Trust is

redundant. (O’Neill 2002a)

Therefore trust implies a willingness to be vulnerable (Mayer et al 1995, Mishra 1996,

in construction see Smyth and Thompson 1999, Wood and McDermott 1999). This
willingness to trust also implies an expectation of mainly positive outcomes
(Rousseau et al 1998), which in a business context is an expectation of a positive
relationship value in terms of financial criteria. However, there is a dynamic of trust
being overcome or eroded by fear. This is not merely a matter of the absolute
character of the individual or the reputation of the other organisation. Fear can arise
as a negative expectation. This expectation is based upon opportunistic behaviour and
follows the pattern set out in the prisoner’s dilemma.

There may be a willingness to trust the other party in principle at the outset. This
willingness can be tested over some modest exploration and if the outcome is positive,
trust can be taken to another level. The intention may be made known to the other
party and both agree to proceed without opportunism. If both parties keep to this
agreement, trust is built and the relationship becomes closer. Both parties begin with
the best of intentions. There may be no evidence that either party is departing from
the agreement, but the thought arises, “What if the other party reneges on the
agreement?” This means the initiator is making itself vulnerable, hence open to
opportunism. The consequence of this thought is that it makes sense to break the
agreement first, hence become opportunistic and take advantage of the other party.
This can lead to a further thought that there is now a willingness to be opportunistic,
in which case it is better to definitely break the agreement in order to benefit from
opportunism at the other party’s expense. The other party may think the same, even
though they have no evidence to doubt the trustworthiness of the other party.
Therefore it is always better for both parties to break trust and hence to break to the
agreement. This philosophical position has been set out by Hobbes (1994), who
claims that even modest agreements and agreements with a set time scale, such as a
construction contract or framework agreement, are likely to fail, it being a question of
circumstantial timing for the breaking of trust to maximise opportunistic advantage.
As with the prisoners dilemma, the timing takes into account what one party
anticipates the other party to be thinking and doing, with a consequence that the
breaking of the agreement tends to be pushed forward in order to pre-empt the other
party acting opportunistically first.

This means that if each person or organisation acts rationally in their own interests,
and does not have sufficient fear of detection and punishment, they will ignore
opportunities to collaborate with others. This introduces the need for checks in
behaviour, hence need for accountability, measures and forms of benchmarking. This
is implicit admission of a suspicion that trust will fail or be broken.

When a party is initiating opportunistic behaviour, they are acting out of pride, that is,
at the expense of another. This is not pride in achievements based upon merit. They
are acting on a value or belief that they are important enough or sufficiently self-
indulgent or selfish to use power at the expense of another. Pride is also an ‘enemy’
of trust.

This exposition begins to describe some of the dynamics of trust and help articulate a
definition of trust. It can be seen that trust is not an emotion. Pride and fear are the
prime emotions. The converse of pride and fear are the positive feelings of
confidence and humility1.

Trust is an intangible thing (c.f. Ganesan 1994, McAllister 1995, Fukuyama 1995,
Misztal). It is an attitude (Luhmann 1979, Flores and Solomon 1998) as a noun and
disposition (Fukuyama 1995) in the form of a verb, which is formed into a belief that
informs action. It is a belief that those on whom we depend will meet our
expectations of them (Shaw 1997). Trust is observed indirectly as evidence in
behaviour (Moorman et al 1993, Currall and Judge 1995, Mayer et al 1995, Smith and
Barclay 1995, Smyth and Thompson 1999). This is shown in the matrix below. It is
generally thought that behaviour is eighty percent formed out of emotions and twenty
percent from rational thought, so these dynamics are significant.

Proactive
Pride Confidence
Disposition

(Re)Active
Fear Humility
Disposition

Negative Positive
Attitude Attitude

Figure 1. Primary Emotions

A definition can be posited as:

Trust is a disposition and attitude, giving rise to a belief, concerning the

willingness to be vulnerable in relation to another party or circumstance.

In the construction context a further focus can be added to the definition:

Trust is a disposition and attitude concerning the willingness to rely upon the
actions of or be vulnerable towards another party, under circumstances of
contractural and social obligations, with the potential for collaboration.

The social obligations exist throughout the relationship and thus start at the initial
development of the relationship at the client-contractor interface. The outcome must
be a relationship value that yields financial reward, which will normally be profit but
not necessarily in every instant.

1
As indicated pride can be positive when based upon warranted praise and on merit. Fear can act as a
warning. Confidence and humility are positive feelings based upon acceptance, security and a sense of
significance. These feelings can be present in a person or an organisation in a mix.
The dynamism of trust is to act as a mediator, combining past evidence and feeling in
moving the individual or organisation towards a willingness to pursue a trusting form
of behaviour towards another party.

Trust can be shown as a mediator in diagrammatic form.

Pride Confidence

Fear Humility

Trust

Figure 2. Trust as a Mediator of Emotions Expressed in Behaviour

In business, confidence is a valued emotion. Confidence is built upon what is known,

in particular past experiences. Mathematically, confidence is a probability
calculation. Confidence is contrary to faith, which is built upon what is unknown or
unseen. Faith is not an emotion, like pride and fear, but is a disposition, giving rise to
belief. In practice people rarely operate upon ‘blind faith’ over long periods, but
anticipate they will gradually see more clearly so that faith is transformed into
confidence. A key factor of transformation is trust. The willingness to trust provides
a basis to observe the beliefs, held in faith, being outworked in behaviour, hence
providing evidence to build confidence in a relationship.

Faith Confidence

Trust

Figure 3. Trust as Mediator to Build Confidence

Faith can over-ride pride and fear, although it carries a high risk, because the level of
uncertainty is maximized2. Where pride or fear dominate, the person or organization
has decided to act opportunistically and thus is attempting to deceive the other party,
if only moderately or in the short term, in order that they may have the upper hand.
Thus the approach set out by Hobbes can be encapsulated as deception eroding trust,
which at a general level echoes the position of Machiavelli (1999). Therefore there is
force acting in opposing directions between trust and deception.

Hobbes
Machiavelli

Deception Trust

Figure 4. Deception in Opposition to Trust

The Enlightenment philosopher, Hume (1978), believed that people are more
sympathetic than Hobbes or indeed Machiavelli. People act as reflections of each
other, one party seeing aspects of themselves through others, hence creating the social
desire for companionship and social interaction. The prisoner’s dilemma essentially
isolates the individual (or organisation). Love, affection and the range of emotions
associated with close relationships provide good reasons to avoid deceptive action and
promote collaboration.

Hobbes Hume
Machiavelli

Love and
Deception
Sympathy

Trust

Figure 5. Trust as Mediator between Deceptive and Loving Behaviour

2
However, risk and faith are not the same for faith concerns what is believed to be possible and may
even include belief at quite a detailed level, whereas risk concerns what is known to be possible, but
the details thus likelihood are by definition unknown.
Hume’s position had been implicitly challenged by those who believed that selfish
interest can easily dominate and erode love and sympathy3. The issue is that no
deception is needed, merely selfishness. According to Hobbes and Glaucon there
must be a penalty for selfish behaviour. The punishment must match the crime.

Hobbes Hobbes
Machiavelli Glaucon

Selfish Social Justice

Interest

Trust

Figure 6. Trust as Mediator between Selfishness and Justice

In different ways, Locke and Kant saw failings in social justice, both generally and a
system of punishment in particular, as being capable of overcoming the excesses of
self-interest. For these commentators a more positive force was needed at a societal
rather than individual level. In distinct ways they advocated social values as a key
means with trust being present to mediate in favour of social aims.

Hobbes Locke
Machiavelli Kant

Selfish Social Values

Interest

Trust

Figure 7. Trust as Mediator between Selfishness and Social Values

The perceived problem with social values is that they do not always regulate personal
life, nor for that matter the life within organizations. Privacy and secrecy serve to

3
This returns to the roots of Socrates and Glaucon’s debate (Bailey 2002).
provide fertile ground for selfish pursuit generally and opportunistic behaviour in a
business setting. One solution is that open and more transparent communication is
advocated. People and organizations need to be made accountable for their actions,
not simply through a system of social justice, supported by penal sanctions, but
through public accountability where actions can be measured and assessed. In this
way a means is provided to test whether social values are being adhered to in areas
important to the stable functioning of society and governance.

Hobbes Locke, Kant

Machiavelli Marx

Selfish Social Values

Interest

Accountability
and
Measurement
Weberian
Corporatism

Figure 8. Accountability as Mediator between Selfishness and Social Values

The important point to draw out is that trust is now substituted by accountability.
Where there is a drive for accountability and open communication, then trust is
usurped. Where communication is open and transparent there is no need for trust.
The role of accountability is to subscribe those areas in which assessment or
measurement is needed in order to secure the integrity of the activity. Benchmarking
and KPIs in construction are part of the process of accountability. There is a
philosophical contradiction here between public accountability and trust (O’Neill
2002c). Once accountability is enshrined in the process, the parties will have a
tendency to focus activities on satisfying these requirements. The parties therefore
substitute the need for trust by legalistically following the new rules, tending to meet
the minimum requirements of acceptability whether this is the status quo or moderate
improvement. The moderate improvement may fall short of the potential to be
achieved where trust has been built and is active within relationships because trust
provides encouragement to perform to capacity and potential.

Measurement and accountability are important. There is a need to know achievement

levels. First, it is a matter of degrees of accountability, in other words sufficient to
ensure progress. Second, it is a matter of availability in the public domain, for an
organization will benefit from self-evaluation to improve performance. Third,
performance measurement to facilitate change management is questionable, especially
in the case of construction, when the output measures do not reflect the fundamentals
initiating change, as will be analysed later. Just as communication is a product of
trusting relationships, so accountability grows out of trust, but where it is imposed it
becomes a substitute for trust.

The corporatist approach may offer some efficiency, but little on the scale of
effectiveness. Indeed, ultimately the efficiencies gained may be eroded because the
legalistic adoption of the rules of accountability take the model back to the realm of
pursuing social justice against the forces of selfishness. However, trust is left out of
the equation now (cf. Figure 7) and therefore will fail to moderate selfish behaviour as
desired. The logical solution therefore is a harsh, even dictatorial penal system.

Advocating, yet leaving trust out of the policy implementation is precisely the
position adopted by Egan (1998). Benchmarking and KPIs become the tools to
evaluate the success of the drive for change. Trust is unlikely to be sustained in the
long run. One potential factor of amelioration is the poor formulation of
measurement, which tends to focus upon performance per se rather than in relation to
client expectations. Client expectations are not measured at the outset and so a sound
evaluation of progress and satisfaction in meeting client requirements is avoided.
Ironically, it has been clients that have led the drive for change that resulted in the
landmark reports by Latham (1994) and Egan (1998) as well as more recent ones in
their wake. Thus there will still be some reliance upon trust. However, this does not
rule out completely the potential for a more punitive system.

The outworking of the corporatist approach is that one party relies upon another,
rather than trusts the other. Such reliance is based upon hope rather than trust. That
is positive, but it neither happens within a close or sympathetic relationship, nor is it
based upon faith that things will work out well. There is no philosophical need for
trust and therefore for confidence to be built as trust is built. Thus, the most hope
provides is a belief that things could go either way. As each party assesses whether to
behave opportunistically or not, that is precisely the equation – it could go either way.
Fear and pride can provoke the parties to swing the equation back in favour of
opportunism. Thus, any potential to build trust on the back of hope is quickly eroded.
The final rational outcome of the corporatist approach is retreat to opportunism and
the eradication of trust. Consequentially relationships break down.

Can relationships be re-established and trust built from this analysis. In essence, the
requirement is an investment or commitment. In a competitive market this is not a
matter of altruism, it is a matter of competitive advantage (cf. Barney and Hansen
1995), hence relationship development and the building of trust becomes a
management objective and the means are management tools of investment. The
investment is emotional and financial. This is essential for an investment is needed
in order to yield a return. It commences with the first contact during the business
development stage and requires continuity throughout, whether operating an account
handling approach or passing the baton under a relay team approach (Smyth 2000).
Whether relationship development is being pursued under partnering arrangements or
an informal approach, the essence is single-sourced, close relationships. These
relationships are business orientated rather than task or technology focussed, hence
they are not about selling products or services, partners moving from a technology of
selling to the process of interaction (Nooteboom 1992).

The elements of investment are:

 Taking a step of faith in order to provide a basis for trust to be explored, and
mediate successful outcomes, thus converting in time faith into feeling
confident about the other party
Taking responsibility for the relationship in order that opportunism will not
be entertained and thus deception arising
Monitoring that the other party is prepared to take responsibility in order that
commitment to making the relationship work is present amongst both parties
Having forbearance and tolerance where initial behaviour is not in line with
collaborative aims and where there is no evidence of failure to commit, or of
opportunism (cf. Swan et al 2001a)
Making investment in the relationship in terms of investing in systems and
processes to develop trusting relations, training and supporting staff, hence
committing management resources to the building of relationships generally
and trust in particular, and hence, building market barriers to opportunism
(Smyth 1999; 2000, Smyth and Thompson 1999).

Such investment requires internal confidence in management decision-making and in

staff. There needs to be internal trust amongst management in the competencies of
staff and in their capacity to develop and be developed in this area. This requires a
sense of vulnerability, perceived in terms of humility, not weakness. Humility
embodies an ability to act in a firm and assertive way when needed. Confidence and
humility are important emotions to foster and are based upon individual and corporate
identity in the sense of knowing acceptance, security and significance. Identity is
derived from who a person or an organization is. It is not derived from what they
currently do or how they behave in relationships. While past experience may have
built identity, relying on current relationships or performance to prove a point will
only show up any lack of acceptance, security and significance which can then invoke
pride and fear, hence opportunism.

Trust is tested and developed across the client-contractor interface through a series
personal encounters (Moorman et al 1993), in which the parties establish reciprocal
obligations (Nooteboom 1992). Usually a number of individuals are involved in both
parties in this process, hence the need for overall management input, internal trust and
consistency in managing the other party whether utilising the account handler or relay
team approach (Smyth 2000).

Taking responsibility for a relationship may not rule out opportunistic behaviour as
the relationship nears the end of its usefulness. At the client-contractor interface this
may be manifested as:

Clients pretend to still yield the commanding market position and contractors
the competitive market position to create a mutually co-operative or
collaborative position of interdependence, but act in other ways behind the
scenes
Clients know they will not reappoint the contractor out of preference or there
is insufficient work and this information is not known by the contractor
The client may not pay the entirety of the final account in the knowledge that
seeking justice is both risky and costly to the other party
 Contractors are nearing the end of a contract or partnering agreement where
there is little prospect of more work
Contractors are facing intensified competition, for example entering a
recession, and opportunism surfaces on both sides.

However, where trust is being used as a source of competitive advantage, then market
reputation is important in attracting quality suppliers for the client and in attracting
quality clients for the contractor. Reputation can therefore embody trust for which
responsibility must therefore also be taken.

It is interesting to note that the means to regenerate trust is not based upon utilitarian
theories, thus in line with Kant whereby people should respect others, behaving as
you would wish them to behave towards you. However, competitive forces can
harness this process to induce utilitarian outcomes.

There is a possibility of parties mistaking behaviour as exhibiting trust, when the

motivation is compliance, which is common where one party has the commanding
position and chooses to mobilize that power (Hardy et al 1998). In this case
opportunism may not be present, but the outworking of market leverage. It acts as
disrespectful behaviour and erodes commitment.

The strength of the relationship between organizations, in this case the client-
contractor relationship, can only be as strong as internal relations in the firm.
Therefore internal trust has to first be fostered. However, that does not automatically
mean that trust is exhibited in external relations. It may be weaker or non-existent as
in criminal activity requiring the co-operation of several (Husted 1998, Watson 1998,
c.f. Gummesson 1999). In so far that trust exists, it is widely agreed that there must
integrity (Anderson and Narus 1991, Mayer, et al 1995, Kumar 1996, Clark and
Payne 1997, Wood et al 2001, Beccera and Huemer 2000).

People need good evidence to trust in a sustained way. Indeed, many tend to trust up
to a minimal level until there is evidence one way or the other. Misplaced trust arises
when we ignore contrary evidence, which is when the desire to trust is stronger than
the evidence because of high hopes or expectations in a desired outcome.

Williamson (1985) argues that trust does not exist in the market. It only occurs within
an organization. Circumstantially partnering and other contract forms are trying to
promote the benefits of internal collaboration within a market context. It has been
noted that trusting relationships can over-ride opportunism (Fukuyama 1995, Brenkert
1998, Smyth 1999; 2000) and indeed erect barriers of market through increasing
switching costs (Smyth, 1999; 2000). Korcynski (2000) challenges Williamson by
saying he adopts a neo-Hobbesian view and follows neo-classical orthodoxy in
respect of denying trust in the market. Korcynski builds upon Durkheim, citing that
any contract formed in the market gives rise to social obligations that are not stated in
the contract terms. The outworking of such obligations are that the motivation to
fulfill them is relationship based, mediated by trust. Barney and Hansen define trust
in economic relations as:

…an attribute of a relationship between exchange partners. (1995, p. 2)

Trust in a market helps to increase stability, whereas its absence can lead to market
failure (Dasgupta 1988). Trust adds value through incentives or governance,
increases the value of personal or corporate relations, adds value through all forms of
scarce knowledge, and through the perceived reliability of corporate systems in the
exchange process (Korcynski 2000). In contracting it is acknowledged that trust is
linked to money, in particular to better business from working in teams (Swan et al
2001b), which can be interpreted as improved repeat business, improved market share
and increased profit margins. Working in teams demands support from senior
management and implies there is a system, for example an approach derived from the
relationship marketing paradigm (Storbacka et al 1994, Gummesson 1999 and for
construction Smyth 2000).

If one organisation trusts another and it shows, evidence is then provided to other
parties of the trustworthiness of both organisations. This acts as a basis for the third
party to trust these too. In this way, trust is built between groups or teams and then
across organisations. The teams may be the decision-making unit (DMU) for a
project. In turn, parties in other organisations may observe the trust and be prepared
to follow suit. Trust then builds across a project’s temporary multi-organisational
team (Cherns and Bryant 1983) or virtual organisation for project implementation and
then the whole project coalition. This is the basis for creating the beginnings of a
network of trust that includes the client, design team, contracting team and supply
chains or clusters as well as other stakeholders. Wood et al (2001a) support the notion
that working in teams within the market is positive and indeed believe that this will
reinforce the social values required to sustain trust in the long run:

… the trend towards trust-based partnering in the UK construction industry is

leading its managers and professionals to adopt an ethic of care. They may
not be doing so consciously, and in some instances be doing so sceptically.
(2001 p.127)

However, there are broader economic forces in play. Financial stability in the market
and of the company may create favourable positions for trust building. Recessive
conditions can actually encourage opportunistic behaviour that undermines trust.
While it is demanding to build trust in time and effort, it is easy to destroy trust, hence
the need to achieve a critical mass of network based trust that is robust. A critical
mass means that the social values exert a stronger force than the economic ones and
must do so to maintain trust.

Recent research in contracting has reported indicative signs for respect and
commitment, and a preparedness to be vulnerable and trust the other party (Wood and
McDermott 1999). If replicated in a widespread manner across the market, then there
is a positive basis for developing trust and then going on to manage the development
of trust.

In summary, the concept of trust has been defined in terms of disposition and attitude,
expressed as a belief through behaviour. It has been seen to act in a mediating role
between other beliefs, values and behaviours. The role of social values is seen as
being of critical importance, where the presence of trust helps to facilitate their
development. It has also been shown what behavioural investment can be made to
help shift attitudes and built trust. Finally, the corporatist requirement for
accountability and performance measurement creates tensions with trust and tends to
erode it through a process of substitution, which has been traced in the construction
context. Both accountability and good communication are a outcomes of trusting
relationships rather than drivers. Where these are placed above trust in importance,
legalistic behaviour tends to surface and adversarial relations are re-established.

The Framework
A basis has been provided for developing a framework of trust. This section provides
a brief overview, prior to examining each of the elements. The main elements of the
framework of trust are:

Characteristics of Trust
Components for Trust
Conditions of Trust
Levels of Trust
Operational Basis for Trust
Evidence of Trust
Trust in the Marketplace

The characteristics of trust concern the primary types of trust. This commences with
definition (Lyons and Mehta 1997). Two types of trust are identified, self-interested
trust and socially orientated trust. The two characteristics concern the depth of
willingness of one party to trust another and an analysis is provided of how and when
to move from one type towards another. These characteristics determine behaviour
experienced by the other party.

The components for trust deals with the attributes and attitudes that underpin trust.
The way in which trust relates to other feelings and beliefs is analysed, building the
relationship between confidence and faith, adding in desires, needs and expectations
of parties in showing how these work together in the development of trust. The
components therefore focus upon the dynamics that changes attitudes and therefore
behaviour experienced by both parties. Facilitating change at this level is vital for
inducing trust internally, hence experiencing trust between organisations.

The conditions of trust concerns an analysis of how those attributes and attitudes are
translated into behaviour patterns that combine to create an atmosphere of, or
conducive culture, for trust (Butler 1991). Trust operates at different levels in
organisational terms. The expression of trust is therefore different at these levels.
The role at each level and the organisational dynamics is important to grasp for the
client-contractor interface to be managed effectively. Having an understanding of
each other’s business, combined with a common interests and empathetic business
approach, provides the chemistry to begin to build trust in particular practical
circumstances. This provides the operational basis for trust.

Each party must have good reasons to trust. Evidence of trust in operation and being
able to measure trust is therefore important for maintenance and development of
client-contractor relations (see for example Dawson 2000). Therefore trust has to be
demonstrated through transparency and communication to each party for it to be
valued. Finally, developed trust ultimately depends upon surviving external
pressures. Market forces can provide a test for maintaining trust in the marketplace.

These framework elements will be constructed into an integrated entity by the end of
the paper. At this stage they can be grouped in two ways. The first way concerns the
level of analysis and operation (see Figure 9).

Concepts of Trust Understanding the Developing Trust

Operation of Trust

Characteristics of Trust Conditions of Trust Evidence of Trust

Components for Trust Levels of Trust Trust in the Marketplace
Operational Basis for
Trust

Figure 9. Levels of Analysis and Operation of Trust

The second way concerns the location of these elements in the context of the
customer-supplier and market relations.

Elements that are developed within an organisation are represented in Figure 10 by a

circular arrow. Some elements are only evident internally. Where some evidence,
mainly intuitive or subjective, may become apparent to the other party a broken arrow
crosses the interface. The solid straight arrow indicates where direct assessment,
evaluation and interpretation can be gained between parties, in this context within the
market. The extent of trust is moderated between organisations by prevailing forces
in the market. This will serve to indirectly reinforce or erode the potential for trusting
relationships. It is experienced and expressed by the parties in terms of how much
perceived trust in the marketplace exists under the prevailing economic conditions.
Figure 10 shows the indirect influence using a broken arrow.

People and the ‘organisation’ have to have good reasons to trust. This may take two
forms. First, there may be evidence for trust in a relationship with those in the other
party. Yet, trust may not be sufficiently evident in some circumstances.
 Market

Market Interface
Client Contractor

Characteristics of Trust Characteristics of Trust

Components for Trust Components for Trust

Conditions of Trust Conditions of Trust

Levels of Trust Levels of Trust

Operational Basis for Operational Basis for

Trust Trust

Evidence of Trust Evidence of Trust

Trust in
the Marketplace

Figure 10. Expression of Trust in the Customer-Supplier Dyad

Second, the willingness of an individual to trust another party may be increased where
they have internal support and trust others within their organisation. This may
provide a basis for increased confidence because the perceived risk in the external
relationship is reduced through internal support and capacity to act should insufficient
evidence of trusting behaviour become apparent. The evidence must therefore be
available in terms of being sensed or observed in behaviour. That embraces both
intuitive and rational communication. The second option based upon internal trust is
only a short-term one, allowing trust to be demonstrated further on. Thus, in the
medium term, trust must be demonstrated by one organisation to another in order to
provide the necessary evidence to continue to be vulnerable and therefore have the
willingness to trust the other party.

For example, in construction, a tender price secures a project based upon the
estimated cost of the work to a contractor including a mark up. In traditional
contracting the price is not guaranteed and indeed the customer or client may make
design and project variations during the contract. If a contractor tries to extract a
premium payment out of each variation or makes claims for additional payment
without due cause, there will be no evidence of trusting behaviour, opportunism
having emerged and adversarial relationships tending to become dominant. In such
instances contractor behaviour demonstrates to the client there is insufficient evidence
to trust.

The next sections consider each of the framework elements in turn.

Characteristics of Trust
The characteristics of trust concern the primary types of trust. Before exploring the
types of trust, first it is necessary to examine when parties may show a willingness to
trust, but where it is misplaced trust. There is a risk for any party that trust may prove
to be misplaced with hindsight. It is part of the vulnerability:

Since trust has to be placed without guarantees, it is inevitably sometimes

misplaced: others let us down and we let others down. When this happens
trust and relationships based on trust are both damaged. Trust, it is constantly
observed, is hard earned and easily dissipated. It is valuable social capital
and not to be squandered. (O’Neill, 2002a)

Misplaced trust may occur where one party is acting prematurely, hoping that
everything will work well. It may occur when there is no evidence for trust. Denial
can play a part too where evidence is overlooked when either hope or perceived need
for a favourable outcome leads a party to put trust in another without sufficient
reason. Misplaced trust turns out to be ‘blind faith’ without trust converting such
faith into confidence.

In construction, misplaced trust is corporately born out of the drive to secure projects
regardless or denial that things are going wrong and failing to recognise a strong
tendency for the other party to behave opportunistically during a contract.

Where there is good reason to trust, two types of trust have been identified by Lyons
and Mehta (1997):

Self-interested trust, which focuses upon a willingness to trust with minimal

evidence for trust, but from which it is estimated there is mutual short-term
advantage to trust another party. The risk is small and so is the initial reward,
yet there may be potential to build the reward beyond the initial willingness to
trust.
Socially orientated trust, which is generated through obligations in a social
network comes through reputation, advocacy and especially relationships. It
is sustained through experience, leading to a preparedness to “go the extra
mile” for another trustworthy party. In this sense it is sacrificial.

Self-interested trust is based upon behaviour where it is mutually beneficial to trust

each other. The importance of this type of trust is that it requires minimal evidence of
trust, probably at the level of an intuitive sense or based upon company reputation. It
could be summarised as being prepared to trust the other party until proved otherwise.
So, as long as there is no basis, nor strong suspicion, for mistrust it is to mutual
advantage to trust the other party. This is the classic “win-win” situation. However,
it is entirely based upon the premise that it is in my short-term interest to trust. In
summary the motive to trust is, “What can the other party do for me?” This is the
character of self-interested trust.

Self-interested trust is therefore the initial stage of developing trust between parties.
Each party stands to gain, but it is relatively superficial in character if that is where
the relationship, hence trust stays. Fukuyama (1995), for example distinguishes
between low and high trust societies. Societies change over time, O’Neill (2002b)
recently drawing attention to a growing crisis of trust in civil society in Britain. As a
sector, the construction industry has been adversarial and is seeking to change
towards a higher trust sector, especially at the ‘top end’.

In summary, the following configurations can be identified:

a) Self-interested trust will be highest where goals are shared.

b) Self-interested trust can exist where goals are different, yet can be achieved
through low level collaboration.
c) Self-interested trust will be lowest where goals are different and can be
achieved through co-operation, yet where the goals of one party could also be
achieved at the expense of the other – opportunistic behaviour.
d) Self-interested trust can be minimal where the power relations between the
parties are unequal at any one time, the more powerful party needing to
dispense with any deception or opportunism or taking the initiative to
transition towards to socially orientated trust.

Making a change to a deeper level of trust carries costs and many prefer to remain at
the self-interested level of trust. However, this level is easily punctured by
opportunistic self-interest. The mind-set can stay the same, only the behaviour
changing.

Socially orientated trust is a deeper level of trust with a philanthropic character. In

that sense it is giving in character. It takes the definition of ‘service’ in the literal
sense and requires that one party “goes the extra mile” for another. Socially
orientated trust needs to be built with care through the relationship, as each party must
be aware of the willingness of the other party to be equally trustworthy. In a business
context, there must also be investment on both sides in the relationship. Whilst there
must be a return on the investment in the long run, each act of investment does not
require a short-term return. In other words, the trusting is unconditional. This is not
the short-term “win-win” situation. Nor is it a win-lose situation, but rather it is about
seeing the potential relationship value and investing in it to build it up as an asset. In
terms of motivation socially orientated trust asks, “What can I do for the other party?”

Wood and McDermott (1999) found from a small sample that senior managers within
the industry are putting self-interest aside in favour of further collaboration. Further
research is needed to establish how widespread this is in intention and behaviour.

In summary, the following configurations can be identified:

a) Socially orientated trust will be maximised when predicated upon mutual

understanding of expectations, needs and likelihood to act in one way or
another
b) Socially orientated trust will be highest where both parties expect to secure a
high and relatively equal level of benefit
c) Socially orientated trust stands most likelihood of being maintained where
there is mutual respect and consistent responsibility taken for the relationship
internally as well as for the other party
 d) Socially orientated trust stands most likelihood of being maintained where
both parties make relatively equal levels of investment in the relationship and
in management and technical requirements.

The outcome for both parties should be favourable in the end, but the focus changes in
achieving those ends. Making the switch from the self-interested trust to the socially
orientated trust is what will make the client-contractor relationship sustainable in the
long run.

What does that transition from one focus to another mean in practice? Many
companies are “accountancy driven” in the sense that the figures tend to drive
decisions more than relationships. Where this is the case, the “win-win” mentality of
self-interested trust will be the normal limit of pursuit. Partnering down the supply
chain, on the other hand, will require levels of support and co-operation that may go
beyond the short-term win-win objective to a more strategic aim of socially orientated
trust. The supplier will hope that they will benefit from “going the extra mile” in the
long run, but there is a short-term sacrifice. The relationship value over the long run
will warrant some sacrifice (Storbacka, et al 1994). In construction, the relations are
traditionally adversarial. Project partnering is largely tactical and short-term, hence is
still largely based upon self-interested trust, whereas strategic partnering across
projects offers opportunities to develop socially orientated trust, although the
commitment and investment has yet to be manifested in a consistent way (Smyth
1999, 2000).

Components for Trust

Components of trust deals with the attributes and attitudes that underpin trust.
The link between confidence and faith has been cited. Confidence is based upon past
direct and indirect experience, giving concrete evidence as to why one party may have
confidence in another. Faith, on the other hand, is based upon belief, where there is
little or no evidence in advance. Trust is not grounded in substantial concrete
evidence, nor is it based purely upon belief. It is grounded in having good reason to
support someone or something. The reason gives comfort to the party trusting
another. The root of trust is in the German, trost, which suggests comfort. However,
confidence-trust-faith cannot be put into a continuum as faith can live side by side
with confidence, however trust has a mediating role in creating a bridge to explore
whether faith can be converted into confidence over time. This permits faith to rise to
higher levels and in new areas of potential. Figure 11 shows how the dynamic
operates in order that relationships are enhanced.
 New level or
issue of faith

Faith Confidence

Trust

Figure 11. Faith, Trust, Confidence Dynamic

As relationships are enhanced, faith is raised to a new level, hence improved

performance and new tasks arise. As confidence is established at this new level, the
cycle begins again. Greater trust is required as this dynamic demands the transition
from self-interested to socially orientated trust.

Levels of faith Socially

orientated trust

Self-interested
trust

Degrees of
confidence

Figure 12. Faith, Confidence and Trust Transition

The confidence-trust-faith dynamic contains aspects that may not be watertight

compartments. Trust is a subjective construct, therefore experience shows it is a
matter of interpretation of the party concerned. In this sense it is both circumstantial
and individual. In a business context individual competencies means employees are
in responsible positions during transaction relationships. Each has individual has their
own view of the skills and competencies of others, hence of faith-trust-confidence. In
the business environment of project management, Hartman (1999) develops trust in a
similar way, whereby technical competence is the mainstay and induces a solidity that
can give confidence with an element of trust. Trust is enhanced when it is
professionally based and like a liquid finds its own ethical level as code of conduct.
This is facilitated through communication. When these two elements are integrated,
trust develops as sufficient evidence concerning skills and behaviour is apparent. The
most mature development of trust produces a balance for highly effective project
teams (Hartman 2000), which by implication work in a highly rational and intuitive
form, combining confidence, trust and faith in both themselves and at the client-
contractor interface.

These aspects give rise to expectations in relationships. Trust encompasses beliefs

that others on whom we depend will meet our expectations of them (Shaw 1997).
The expectations will generally be positive ones. We may prioritise these
expectations in terms of needs and desires. Clients will want to have needs met ahead
of desires. The same is true of the contractor, as they too have business needs to be
met through delivering a service.

The characteristics and components for trust can be drawn together in a matrix to
articulate the customer-supplier dyad. Figure 13 shows how the relationship value
grows for both parties, adds value for the client and improves profitability for the
contractor as trust grows and increased expectations are met.

Desires High added value service

Premium profit

Minimum value service

Needs Marginal profit
Self-interested Socially
trust orientated trust

Figure 13. Expectations, Trust and Relationship Value Transition

The graph assumes that meeting desires is a higher aim than needs on the assumption
that needs have already been fulfilled. Given that the iron triangle of time, cost and
quality, are the minimum requirements for a client, even though these are not always
met, it is realistic to assume that clients are looking for value that exceeds the
minimum, especially as this has been an experience secured from many suppliers in
other sectors. Meeting client desires is a source of competitive advantage for the
contractor in the marketplace.
Similarly, the contractor has expectations too. Their minimum needs are to secure a
profit, although market share may also be a motive, especially in recessive conditions.
As value is added to the service, the contractor will expect the client to show a
willingness to trust them beyond the level of self-interest and towards a social
orientation. The client is making the relationship investment to secure high levels of
added value, while the contractor is seeking a higher profit margin. The relationship
must work for both parties.

As the relationship moves towards the top right hand quadrant of the graph, trust
moves towards the more sacrificial level of being more socially orientated:

Self-interested trust-needs: minimal “win-win”

Expectations and trust in transition: increased collaboration and relationship
testing
Socially orientated trust-desires: high trust, high collaboration levels,
where both parties potentially secure
advantage over their respective
competitors.

In summary, as the relationship moves towards the top right hand quadrant of the
graph, the contractor is giving service and the client is rewarding the contractor
through payment. Payment may come in the form of premium profits, concentration
of repeat business or some combination. The service-payment transaction accounted
for by trust is the meeting of mutual expectations. Hence profitability is a reflection
of service value. Repeat business is a reflection of service satisfaction. Thus the
market position of both parties is strengthened. It is in this way that trust can be
established as collaborative capital.

Once the competition in the market as a whole is also meeting those desires, the
desires quickly become new needs. So, a levelling process acts in the opposite
direction to developing trust. This implies a demand to deepen the relationship and
continue to build the trust. This provides some insight into the shifting and subjective
criteria for perceptions of trust. The graph therefore provides a springboard for
exploring the operational basis for trust later in the paper.

While trust can be articulated in relation to collaborative capital and to confidence

and faith, it also has to be located in terms of relationships. The expectations are
expressed through relationships, thus having reasons to trust are grounded in
relationships. One commentator on relationships put it this way:

Without trust you can have forgiveness, and even love, but there can be no
genuine relationship. The strength of trust will determine the strength of every
relationship. (Joyner 1996, p.57)

In business terms, “love” can be configured as closeness of understanding and

empathy, perhaps also including friendships between individual employees in both
organisations. Trust is indeed the bottom line of the client-contractor relationship.

The components for trust have been established. How these relate together in order to
deepen relationships and improve performance have been articulated in relation to
trust. Improved performance includes meeting higher expectations for both parties.
How this relates to the characteristics of trust has been developed in order to start
building together the elements of the framework.

Every business relationship operates in a wider set of circumstances. Some of those

circumstances include the conditions within which trust can develop. The next
section therefore addresses the conditions in which trust is fostered.

Conditions of Trust
Understanding the characteristics of trust and the components for trust provides
important underpinnings for analysing behaviour patterns. However, there is not an
automatic link from emotions and beliefs to particular types of behaviour. This is the
case for several reasons. First, people do not always behave logically. Second,
people mobilise different beliefs, hence behaviours that can be in conflict or
contradiction, depending upon what “buttons” are pressed circumstantially. Third, in
any circumstances there are usually choices to be made, some being more positive
responses than others. The same is the case for organisations. Therefore it is
important to understand what behaviour patterns, thus conditions, give rise to a
willingness of one party to trust another.

Wood et al (2001b) found six dimensions in a sample within contracting, namely

openness of communications and honesty dimension, promise-keeping, fairness-
reasonableness, relationships, mutuality-reciprocity, and values-ethics. This closely
relates to broader studies into trust (for example Mayer et al 1995, Mishra 1996),
however, these are part of the trust construct. Wood et al introduce ethics, although
trust can exist in unethical situations, for example in the criminal world where either a
high level of group trust or fear is necessary to afford protection in the face of an
absence of external trust (see Gummesson, 1999). Therefore, the six dimensions are
based upon the conceptions of trust and associated behaviours in the industry, which
is a step away from the behaviours themselves that create the positive conditions for
trust to be present.

Conditions of trust show how attributes and attitudes are translated into behaviour
patterns that combine to create an atmosphere of, or a conducive culture for, trust.
Butler (1991) was responsible for developing the dimensions of conditions of trust in
consumer markets. The approach of Butler is to look at conditions associated with
trust as they are demonstrated through the customer-supplier dyad. The outcome is a
number of areas upon which management can focus in order to foster trust. The
significance is that the analysis extends beyond the circumstantial aspects of the
characteristics and components. Management therefore can focus not only upon the
environmental context but also on specific conditions.

This is particularly relevant in business-to-business relationships. Two attempts have

been made to place this in a contracting and project context. The construction study
of 30 projects by Hannah (1991) in the United States showed that performance
derived from trust related to individuals rather than project factors. This may be more
a reflection of construction industry culture in the United States than trust per se. The
studies by Thompson (1996; 1997) in the United Kingdom endeavoured to examine
the conditions in terms of relationship marketing and management. Thompson related
perceived client risk to client confidence. The conditions of trust mediate between
these two elements. The more the client trusts the contractor the lower the level of
perceived risk.

Perceived Client
Risk Confidence

Conditions
of Trust

Source: Thompson, 1997

Figure 14. Risk-Confidence Continuum based upon Conditions of Trust

From this basis, Thompson analysed the conditions of trust from the perceptions of
clients derived from in-depth interviews. This acted as the basis for a broad based
survey of leading clients, which yielded the following results against each condition.

Condition of trust Correlation coefficient

against overall reported trust

Receptivity 0.84
Promise-fulfilment 0.82
Consistency 0.82
Integrity 0.81
Loyalty 0.81
Fairness 0.74
Openness 0.73
Competence 0.73
Discretion 0.69
Availability 0.52

Source: Thompson 1997; see also Smyth and Thompson 1999

Table 1. Client Conditions of Trust in Construction

Although this pioneering work experienced some difficulties in method and data
collection, the results can be treated as indicative. As such, they confirm part of the
foregoing analysis, as well as providing further insights. First, the conditions are the
result of client perceptions rather than mutually exclusive categories, and so reflect
perceived importance. Second, the conditions clients perceived to be important are
the intangibles of the service. Third, the most important conditions of trust are
certainly those that are either relate to the transition stage from self-interested trust to
socially orientated trust or require socially orientated trust. Apart from two
categories, receptivity and promise-fulfilment, there is no evidence that clients expect
contractor performance to exceed meeting their needs. Promise-fulfilment requires
that contractors meet those promises made pitching for a contract, during post-tender
negotiations, through to completion, which will go beyond the iron triangle and the
clauses of the contract. Receptivity may also imply for some respondents of the need
to listen and respond to new demands, including desires as they arise during the
contract. This demands a reasonable fluid approach amongst both parties.
Receptivity does not necessarily mean responding to every demand, but it means
careful consideration to create and maintain trusting conditions.

The apparent low level of desires implied in the research findings indicates that
clients do not have particularly high expectations. This does not mean they are
satisfied. This accords with initiatives to take construction away from adversarial
approaches towards a more co-operative approach (cf. Latham 1994; Egan 1996).
The conditions of trust are affected by context. The more complex is the project, the
higher the perceived risk, therefore, the greater the value of trust to reduce perceived
risk. However, project complexity tends to be linked to size, hence the greater the
number and complexity of relationships, and thus the longer it takes and the greater
the investment in building and maintaining trust.

Economic factors also come into play. Financial stability in the market and of the
company will create more favourable positions for trust building. Recessive
conditions can actually encourage opportunistic behaviour that undermines the
conditions of trust. While it is demanding to build trust in time and effort, it is easily
destroyed, hence the need to achieve a critical mass of network based trust that is
robust. In a project environment repeat business is implied with either a high level of
continuity maintained in project teams or strong systems being in place to maintain
the character of service (Smyth 2000).

The top three conditions from the findings of Thompson suggest that reliability is
important to clients. This reinforces the work of Parasuraman et al (1988; 1991), who
place reliability as the most important condition of service quality, using
SERVQUAL.

Thompson (1997) carried out research from the client perspective. Similar research
has yet to be conducted looking at the conditions of trust from the contractor
perspective of the client organisation. From Thompson’s and the foregoing analysis,
it would be surprising if the profile was markedly different. What can be asserted is
that the contractor too needs the conditions of trust to be in place in order to develop
confidence in the client and improve service and performance levels.

More problematic in the findings of Thompson (1997) and Wood et al (2001) is the
extent to which observed behaviours in practice have a causal power in engendering
trust and the extent they are the result of trust. It may be more realistic to suppose
that there is an iterative approach. Thompson is clearly addressing causal conditions.
The research approach combines the conditions of trust inventory with a reasoned-
action model. However, his data focuses upon perceptions rather than behaviour
itself, therefore, the behaviour is causal. This is not to say that all behaviour is in line
with any one of the conditions, nor to say that all behaviour is causal. For example,
people or organisations can behave in open and competent ways but may not always
establish conditions for trust, nor need the party necessarily intend to act in a
trustworthy fashion.

This distinction is important for examining the extent to which management can
manage the development of trust in their organisations and across the client-contractor
interface. At this stage, the most that can be claimed is that if one party encourages
and facilitates behaviour amongst staff in line with the conditions of trust an
appropriate basis will be created in general terms. In itself this will not create trust,
but coupled to managing other framework elements trust will be induced.

At this stage the framework begins to develop shape as attitudes and beliefs move
towards distinctive behaviour patterns.

Attitudes and Beliefs Behaviour Patterns

Components Conditions of
for Trust Trust

Characteristics
of Trust

Figure 15. Development of Trusting Behaviour Patterns.

Figure 15 can be considered for individuals and groups. A large group may constitute
a division or business operating unit, project team and indeed a company. However,
in considering group behaviour in a business setting, then the hierarchy and thus
levels of operation must be taken into account. There are two corporate aspects of
levels of trust germane to this study. The first aspect is how authority within the
hierarchy is expressed in relation to trust. The second aspect is how management
facilitate the development of trust internally and then support the willingness to trust
other parties at the client-contractor interface. This is the subject of the next section.

Levels of Trust
Trust operates at different levels in organisational terms. The expression of trust is
therefore different at these levels. The role at each level and the organisational
dynamics are important to grasp for the customer-supplier interface to be managed
effectively. There are essentially three levels of trust:

1. Corporate
 2. Group or Project
3. Personal.

The main issue is one of conceptual stance. Is trust purely located in individual
relationships or can trust located within and belong to organisations? In the first case,
trust is simply a reflection of trust between individuals across organisations and is
manifested in several ways, as trust in relationships:

within an organisation
across the client-contractor dyad
across the temporary multi-organisational team (cf. Cherns and Bryant 1983)
or the wider project coalition (cf. Winch 2002).

In the latter case, trust is embodied in organisations regardless of the individuals

because culture, competence and reputation reside with the organisation over and
above individuals. Wood et al (2001c) found individuals stated that they tended to
trust people rather than organisations. However, the role of an organisations
reputation is important for two main reasons. The reputation of the organisation is
important as it embodies semblance of relationship development and performance
across a series of dimensions, of which trust is important. Reputation therefore
embodies trust and in construction is more closely associated with individual
trustworthiness because of the strong network, referred to by Wood et al as the “small
world”, where many regularly worked with the same people over many years.

Reputation is based upon accumulated behaviour over a period of time as perceived

by other parties. An individual from one party will assess the individual from another
party, not only by their own behaviour but also by those with whom they work.
Effective project teams are built when people have authority to make decisions and
the information that they are passing between one another is honest and accurate. If an
organisation trusts it’s own people, its ability to build trusting relationships with other
parties is enhanced, as perceived by those parties (Wood et al 2001c).

There is a blending of individual and organisational relationships occurring, filtered

through the employee and reputation in the market. Therefore the position adopted in
this paper lies somewhere between trust residing with the individual and the corporate
organisation. Ultimately, trust is a human experience, based in the mind and emotions
of individuals. Yet it is the case that trust expressed between individuals can
influence the behaviour of others and hence the culture and performance of an
organisation. The organisational systems help develop and transmit trust, as systems
are vehicles for communicating both the willingness to trust and the evidence of
trustworthy behaviour. This helps enhance internal perceptions and external
reputation.

Behaviour differs at organisational levels, so trust is expressed differently. The more

the individual is operationally based, such as site personnel, the more rapidly trust
develops. Yet individuals operating at this level have a more limited view of it,
focussing on tasks or projects. Directors and senior management on the other hand
focus on relationships at a more strategic level (Wood et al 2001c). Figure 16 shows
how the focus shifts over time and up a hierarchy from being task based towards
being relationship based.
 Conception
of Trust
Building

Relationship

Project

Task
Level Time

Source: Wood et al 2001c

Figure 16. Levels of Trust Building.

At the corporate level trust is built around shared strategic vision and aims. It is a
matter of mutual understanding among the decision-makers. Developing trust down
and across the business will depend upon communication. The communication starts
with the mission and strategy of the organisation, as shown in Figure 17.
Communication will set up expectations amongst staff concerning the content and
realisation of the mission and strategy. When expectations are in line with the
strategy, then authority from the management will be accepted and followed, based
upon trust, resulting in conformance through co-operation. Successful
implementation, that is, without a performance gap (Parasuraman et al 1988), results
in actions following expectations so that confidence is built among staff. Success will
result in strategic aims being translated into applied objectives. Trust will have
enhanced efficacy and efficiency.
 Mission and
Strategy

Expectations

Authority

Conformance

Figure 17. Trust Planning Converted to Conformance in Actions

The same process works in human relation functions, where communication forms
part of the behaviour pattern in the transmission of trust in order that the character,
components and conditions of trust can be evident.

There is a corporate parallel to what happens within an individual. It has been shown
that attitudes and beliefs inform individual behaviour. They do not always determine
behaviour because there are choices. Similarly the communicated vision and strategy
in the organisation inform the behaviour of individuals who are bound by contract
rather than conscience. However, individual behaviour is not determined in this way,
for there are choices in the work environment too. The same occurs through
impartation and social osmosis concerning the organisational culture.

It has been noted that trust does not require complete transparency of communication.
Good communication tends to flow from a secure environment. Indeed, the
conditions of trust include discretion and integrity both of which require a degree of
confidentiality. The privacy will be high at the senior management level, especially
with external parties. The higher the management level the higher the confidentiality
warranted. The lower the level, the greater the need for open communication to
facilitate project implementation and task completion warranted. This is
demonstrated in Figure 18. Whatever the level of trust, taking responsibility for
relationships is crucial, but relationships need not be so deep to function effectively to
conduct tasks. At senior levels of management, there will be a greater emphasis upon
social values. The senior management focus upon relationships accords with the need
to assess and dovetail social values across the client-contractor interface.
 Senior Trust in Senior
Management relationships Management
of respect

PRIVACY PRIVACY
Trust in
relationships
OPENNESS of sharing OPENNESS

Source: adapted from Smyth 2000.

Figure 18. Communication Levels and Trust.

Therefore expression of trust needs to be more open at group or project level.

Teamworking requires confidence in each other. It is at the corporate-project
interface and within the project level that implementation gaps arise. Open
communication is far more important at this level and can be establish quicker in
order to plug the service gaps. Open communication is also important up and down
the management line. Staff support and adequate systems provide a means to address
and control issues where gaps may otherwise occur, especially in a project working
environment, where the team can become dislocated from corporate management.

Ironically, it is often here that greatest secrecy arises due to concern about
accountability and personal career issues. There are two reasons why openness may
be thwarted at this level. First, is failure for employees to be open because of
accountability issues, which has been shown tends to induce fear. In other words
employees fear the consequences of getting it wrong in the eyes of superiors, although
in many cases they know not what will be considered right or wrong. There may be
several reasons for this, but an absence of any real trust or the presence of misplaced
trust will be at the root.

Second, the employee may be fearful due to personal background and experience, the
working circumstances “pressing buttons” from the past, invoking fear. This poses a
particular problem in the blame culture of construction. The construction industry has
operated a blame culture in many countries. Its adversarial history has embedded
generations of mistrust into the industry fabric.

The combination of both factors can be destructive, because those full of fear are
familiar with situations where there is an absence of trust and in employment terms
people tend to be attracted to what they know rather than risk change when they are
not used to trusting others. Communication systems are part of the remedy for
plugging implementation gaps. They can provide an open means of communication,
which supported by senior management, can help employees through situations that
induce insecurity and fear. This is part of the process of maintaining and enhancing
trust at this level.
This takes the analysis from relations within one organisation to the client-contractor
interface. It has been noted how clients have been driving change. Partnering has
been instigated across many industries, including construction. Partnering is
endeavouring to reduce costs through supply chain management, using lean thinking.
Partnering is also endeavouring to reduce adversity and increase trust. In the
construction context in the United States, a CII report stated partnering as embodying:

A long term commitment between two or more organisations for the purpose
of achieving specific business objectives by maximising the effectiveness of
each participants resources. The relationship is based on trust, dedication to
common goals, and an understanding of each other’s individual expectations
and values. (Hander 1989, quoted in Cox and Townsend, 1998)

This is typical statement about many partnering contexts. The group or project level
is being temporarily constituted for implementing the contract with members of
different companies who are working together for the first time unless strategic
partnering is being practiced at company and team levels. Added to this, some team
members are frequently located remotely on site on the supply side. Thus, building
trust is potentially constrained by:

Dislocation decreasing organisational support, therefore increasing trust

based upon individuals
The temporary nature of the team, which means a steep learning curve for the
team or group members to build trust amongst themselves reducing capacity
for the client to trust the contractor
Characteristic reliance on subcontracting and external suppliers, putting
reliance upon supply chain management as a means to generate trust that is
supposed be demonstrated to the client.

Although trust is cited in so much of the literature, in practice it takes low priority.
The table below looks at a number of authoritative accounts of partnering. Trust
figures highly amongst them, but only one has a client focus, which undermines the
partnering concept in broad terms and constrains the ability to develop trust. Trust
demands an external focus.
 Key Attributes CII NEDC PS B-H B&J CIB ECII Score
Mutual objectives
(risk & rewards) X X X X X X 6

Agreed early problem

Resolution method X X X X X X 6

Continuous measurable
Improvement X X X X X X X 7

Equality in relationships
(win-win) X X X X X 5

Open culture
(No blame) X X X X 4

Customer focus X 1

Management and
stakeholder commitment X X X X X X 6

Trust X X X X X 5

Long term commitment/

Emphasis X X X 3

Innovation X 1

Team approach X 1

CII Construction Industry Institute, 1991 NEDC NEDC, 1991

PS Partnership Sourcing Ltd., 1994 B-H Baden-Hellard, 1995
B & J Bennett and Jayes, 1995 CIB Construction Industry Board,
1997
ECI European Construction Industry Institute, 1997

Source: adapted from Cox and Townsend, 1998

Table 2. Key Attributes of Partnering: The Client and Trust

Therefore trust needs to be seen as strategically important if the tactical and practical
implementation is to be achieved at project or group level. This covers personal
support and systems development. This levels of trust analysis provides elements to
brace the framework, which are summarised in Figure 19.
 Levels of Trust

Senior Levels
Components Conditions of of Corporate
for Trust Trust Management

Project Team
Management

Characteristics Junior Levels

of Trust of Corporate
Management

Figure 19. Levels of Trust.

Operational Basis for Trust

Trust has been asserted to be a form of collaborative capital. How can this be
understood? Dawson (2000) identifies three types of investments as intangible assets:

1. Human capital – skills and competencies

2. Structural capital – systems, processes and intellectual property
3. Relationship capital – image, reputation, trust and goodwill

Trust is part of relationship capital. Relationship capital can be broken down as:

Profile capital
i. Image
ii. Reputation
Collaborative capital
i. Trust
ii. Goodwill

It is collaborative capital because it adds value. On its own, it is meaningless,

especially in a business environment. Trust is expressed through behaviour, therefore
action is needed for trust to be mobilised within business operations. Approaches to
managing the enterprise will form a vehicle for trust to be experienced. Similarly,
approaches to managing projects can provide vehicles. For example, managing
projects can be conceived functionally (Morris 1994), technocratically as information
processing (Winch 2002) or conceived as relationship management (Smyth 2000).
Management science has placed greater emphasis upon the development of
competencies in recent years (Hamel and Prahalad 1994). Three concepts, the
learning organisation (Senge 1993), emotional intelligence (Goleman 1996) and
relationship management (Grönroos 2000), provide examples that can be applied to
project working environments and thus each will be mediated through trust in their
internal application, hence affecting their operational efficiency and efficacy. In order
 to demonstrate how this can work in more detail, some tenets from relationship
management have been selected for illustrative purposes, the paradigm being as, if not
more, appropriate than others as trust is seen as part of relationship capital (Dawson
2000). Relationship management grew out of relationship marketing (Grönroos 2000,
Gummesson 1999, and in construction Smyth 2000), whereby business-to-business
relations are seen as a main means to secure work, preferably on a repeat business
basis, and achieve successful outcomes. Customers or clients receive added value to
meet their requirements and greater satisfaction with services. The desired output
through adding value is an enhanced relationship value (Storbaka et al 1994). The
process is depicted in Figure 20.

Investment Service Customer Perceived Patronage Relationship

Foci for Quality Commitment Alternatives Concentration Revenue
Management

Focus of
Relationship Perceived Customer Relationship Relationship Relationship
Management Value Satisfaction Strength Longevity Profitability

Cost Foci for Perceived Exit Critical Event Relationship

Management Sacrifice Barriers Events Configuration Costs

Source: adapted from Storbaka et al 1994; see also Gummesson 1999 and Smyth
2000.

Figure 20. Model of Relationship Management.

There needs to be investment in the inputs and a willingness to shoulder costs in

operationalising the process. The investments and costs are represented by the top
and bottom lines, recognising that the translation of perceived value on the client side
into profitability for the contractor along the central line is not a mere mechanical or
automatic process. Each step provides an opportunity to build or erode trust. Critical
events are the area in which there is most scope for the destruction of trust. How
these are managed is crucial. Indeed, they provide positive opportunities to
demonstrate that the conditions of trust are in place through successfully addressing
single events or a configuration of events. When things go wrong, yet are handled
with honesty, simply addressing the mistake by taking responsibility and acting can
actually build trust.

An adaptation of the model for relationship management in projects is provided in

Figure 21, which should be seen as a supplement not a substitute. The prime
difference concerning relationship management of projects is that the focus changes
the project definition so that management begins with first contact and consistency
 plus continuity is provided throughout until the next project is secured from the same
organisation. Similarly the client recognises the investment and makes corresponding
relationship investments to improve the service and stimulate innovation. The two
models are combined to show how trust operates in facilitating the process in Figure
22.

Corporate- Strategic Site & Post

Foci for HQ -to-site Project Team Relationship Handover Repeat
Management systems Support Building Support Business

Focus of
Relationship Perceived Client Client Relationship Relationship
Project Value Commitment Satisfaction Strength Value
Management

Perceived Transaction
Foci for Cost & Supply Critical Event Relationship
Quality &
Project Events Configuration Costs
Sacrifice Chain Man’t.
Management

Figure 21. Model of Relationship Management of Projects.

Model of Relationship Management

Trust as Mediator in Relationships

Model of Relationship Management of Projects

Figure 22. Trust as a Mediator in the Relationship Management of Projects.

The mediation can be seen in a practical example where there is inadequate

information for a decision concerning a project. Combining the analysis of Winch
(2002) regarding information processing and Thompson (1997) concerning conditions
of trust the two aspects are combined in Figure 23. Uncertainty gives rise to a
perceived risk, which is assessed on the probability of an adverse outcome. This is
mediated by the conditions of trust, which may have a positive effect of increasing the
confidence of the one party in the other. This knowledge of the strength of
relationship is itself a part of the information that helps feed into the decision-making
process. The knowledge is about confidence in the capacity of the team to manage
the risk in the interim and solve the problem.

Uncertainty Perceived
probability data Risk

Information Conditions of
required for Trust
Decision

Available Confidence
Information relationship

Figure 23. Trust Applied in a Context of High Risk.

Information that contributes towards building trust occurs upstream. It begins with
business development:

Understanding the business of the other party

Articulating expectations
Mapping and profiling of the decision making units

These aspects are not exclusive, but are indicative of areas for exploration to build
trust. This provides a basis for:

Clarifying common goals

Accommodating and facilitating mutually exclusive goals
Agreeing a basis for an open relationship – communication and systems
Accepting of responsibility – credit, error and forgiveness

Again, good communication arises out of trust and is necessary. Good

communication can also be facilitated. There are key stages to the communication at
all levels that help the building of trust within the organisation. These are:

Key Stage Function Focus

1. Encouragement Supportive Feelings

2. Exhortation Directive Behaviour
3. Enlightenment Transformative Thinking (left and right brained)
Effective development of trust should require communication to pass smoothly
through each stage. In enterprises there is frequently a presumption to move to
exhortation or directive communication, which can preclude trust and curtail
employees understanding and constrain relations. The use of encouragement as a
matter of regular and good practice reduces the risk of employees behaving
opportunistically and increases their potential for initiative because trust is present
and they feel valued.

Being willing to trust at this level of analysis invites reciprocity. Reciprocity provides
security for trust to move to another level, hence further performance development. It
is at this operational stage that reciprocity is important. For it is at this stage that
accountability of performance may first begin to erode trust. Accountability does not
expect reciprocity, merely meets a benchmark. However, reciprocity could provide
scope for medium and long-term improvement and innovation through closer
collaboration. However, at each stage all trust risks disappointment, but that is the
nature of being vulnerable. Yet, opportunistic behaviour is as likely or more likely to
result in failure to meet the benchmark.

Therefore the framework can be developed to include operations, although how this
works in practice will depend upon the strategy and practices of an enterprise. This is
shown in Figure 24, which also includes the element for the next section, evidence of
trust. Operations culminate in the behaviour witnessed and experienced by the other
party and it is on that basis that an evaluation will be made about the degree of trust
that exists, the willingness to continue trusting and investing in the other party.

Operational Basis for Trust:

inputs of concepts, strategies,
Levels of Trust
systems and tools
Senior Levels
Components Conditions of of Corporate
for Trust Trust Management

Project Team Evidence

Management of Trust

Characteristics Junior Levels

of Trust of Corporate
Management

Figure 24. Operational Behaviour and Evidence of Trust.

Evidence of Trust
Trust has to be demonstrated to each party for it to be valued. Each party must have
good reasons to trust. Evidence of trust in operation and an ability to evaluate trust is
therefore important for maintenance and development of client-contractor relations.

There are several ways of demonstrating trust. Attitude, motivations and behaviour
are all ways of demonstrating trust. The former two are “caught”, while behaviour is
the only tangible evidence. Attitude and motivations are sensed and are therefore
about ‘chemistry’, especially one-to-one, but also in terms of corporate culture.
Behaviour demonstrates the way in which trust is being built or eroded. The
evaluation of the evidence is always based upon the attitude and motivations of the
observer, for it is these that are intrinsic to beliefs, values and expectations:

Your client’s interest in you is based on their belief that your actions will
reflect a high level of consideration for their interests. They must believe
that you will act with their best interests at heart. (Dawson 2000, p.20)

The evidence, derived from behaviour, will support or refute the belief. Some
behaviour is communicated as action, whilst some is verbal or captured as written and
visual communication. Some behaviour is communicated as action. Action may
result in an output, whilst other behaviour is subtle, such as body language.

Openness helps one party to collect evidence of trusting behaviour. There is a need
for a sufficient degree of openness or transparency to provide evidence of trusting
behaviour, derived from self-interested trust in the first instance. Dawson (2000)
makes the observation that services need to be more transparent for the added services
value to be perceived, rather than being delivered from a “black box”. Visibility is
necessary, especially at the front end so the customer can register the receipt and
initial processing of information and prior to delivery of the service so that an
evaluation can be made that quality and delivery is in line with expectation.
Supplier

Black Box

Opaque Process
Management

Outcome
(seen)

Source: Dawson, 2000

Figure 25. Black Box Service Provision

If one person in a team should break trust, then the presence of a team based trust or a
network of trust can maintain the trust by addressing their colleague who broke trust
to repair the damage. They can also address the wronged party and make efforts to
rectify what went wrong if possible. Indeed, there is potential for a “silver lining”
here, whereby the efforts of those in the team prove robustness of the network based
trust and turn the situation around to reinforce overall reliability and reduce future
perceived risk in the eyes of the wronged party.

Therefore, three principles can be derived concerning communication:

1. Initial evidence has to be provided as good reasons to (begin to) trust, some of
which will be in the form of communication:
a. A degree of openness
b. Using the key stages – encouragement; exhortation; enlightenment
2. Secondary evidence is provided through a relatively transparent service
a. Building on initial relationships
b. Responding to problems
3. Absence of evidence, recognising the need to respect confidentiality at senior
levels and support to staff in order to foster trust within the other company

Can trust be measured? Measurement can be internal or external to the enterprise.

Measurement based upon client, or indeed contractor, satisfaction surveys or
benchmarking performance help to establish the level achieved for each indicator that
may be compared to the expectations of both parties. In relation to trust such
measurement is unhelpful as trust is implicit in expectations and would not be
identifiable as to how it has contributed to a performance outcome. In addition, the
performance of clients is not measured under the KPIs, and client satisfaction
measures exclude any dynamics concerning their expectations at the outset. Yet, as
O’Neill (2002c) pointed out, it is nonetheless necessary to look for ways in which we
can actively check one another's claims. We need evidence that performance meets
the condition of trust expressed from the supply side, that is, promise-fulfilment. We
need to know too that promises relate to the demand side, that is, expectations are
met. Here the measures are not external measures set by rules of accountability but
those set in the responsibilities of trusting relationships. O’Neill puts it this way:

We can place trust beyond face-to-face relationships when we can check the
information and undertakings others offer. This is after all the function of
informed consent requirements. (2002c)

The requirements for evidence undermine the validity of recent benchmarking

practice in construction. The measures chosen have more to do with ease of
measurement in order to satisfy a political agenda rather than accurately articulate
actual performance:

In the end, the new culture of accountability provides incentives for arbitrary
and unprofessional choices. (O’Neill 2002b)

There is a need to reduce deception. Having more information available may help,
but transparency and increased communication do not remove a motive to deceive and
indeed can encourage an increase in misinformation. Deception undermines trust and
promotes opportunism. Deceivers:

… communicate in ways that others cannot share and follow, test and check,
and thereby damage others' communication and action. They undermine the
very trust on which communication itself depends: they free ride on others'
trust and truthfulness. (O’Neill 2002d)

There is a way around this – exposing the motives. Sometimes one party will require
evidence in advance by setting some sort of test or quest for the other party. This may
not guarantee anything, but will build confidence and take the willingness to trust to
another level.

Trust in the Market

Finally, developing trust ultimately depends upon surviving external pressures.
Market forces can provide a test for maintaining trust. There are two dimensions to
this:

1. The role of the client and contractor in the market

2. The role of competitors

The creation of trust and the realisation of profit have to be managed. The
management approach will depend upon the relative power position of clients in the
marketplace.
Client Purchasing Strategies

Independent Independent
Competitive
Perfect Market Seller’s Market

Co-operative Interdependent Dependent

Domesticated Captive Market
Market

Independent Dependent
Command
Buyer’s Market Sub-contract
Market

Competitive Co-operative Command

Contractor Marketing Strategies

Source: adapted from Campbell 1995

Figure 26. Classification of Buyer-Seller Relationships

In construction, there has been a move away from the bottom left hand box in the
matrix (see Figure 26) towards a desire to occupy the central position where the
benefits of an ‘in house’ service are experienced without the complacency. However,
clients are finding it difficult to relinquish their commanding position and contractors
are reluctant to make the necessary investments. There are reasons that extend
beyond the remit of this paper, however, a lack of trust is one reason. The scope for
developing trust changes according to the market position in the matrix. The scope is
scheduled in Table 3.

Client Procurement Contractor Market Trust

Strategy Marketing Strategy Potential

Command Competitive Buyer’s Poor

Command Co-operative Sub-contract Fair
Competitive Competitive Perfect Poor-Fair
Competitive Command Seller’s Fair-Poor
Co-operative Command Captive Good-Fair
Co-operative Co-operative Domesticated Good

Table 3. Buyer-Seller Relationships and Trust

Switching costs are a key determinant to maintaining high trust levels as high levels
over-ride the effect of market opportunism. Switching costs are the direct and indirect
costs a client incurs in switching supplier between purchases. Therefore low
switching costs can overrule the positive effects of trust, as the opportunity cost to the
client of switching suppliers or contractors for the next purchase is minimal. Low
switching costs encourage opportunistic behaviour. Trust may not feature much in
such decisions to switch. Where there is frequency of transaction, a co-operative
strategy may develop (see Campbell 1995) which may induce more investment in the
relationship. In construction, transaction costs are high. Thus, the more intense the
competition, the more opportunistic contractors will behave in the market place, even
“buying work” in times of recession as a defensive posture. The force of such action
tends to erode the value of investment in relationships generally and trust specifically.
Such opportunism may also lead the contractor to act opportunistically once the
contract is secured to claw back the cost of securing the contract at breakeven or with
a low margin. This will erode trust between the parties, but the net result will also be
erosion of trust across the market.

In terms of game theory and the prisoner’s dilemma, individual enterprises have a
strong incentive to ‘cheat’ on any tacit market agreement, in this case to build trust,
especially if they assume others are sticking or will stick by the tacit agreement
(Barney, 2002). The result is the undercutting of others, yet claiming to offer the
same service, hoping clients will break their partnering or framework agreements to
let them into the market. If a number of companies also decide to cheat, the tacit
agreement breaks down and quality must fall. Recession intensifies competition and
thus makes such an outcome more likely.

However, trust is collaborative capital. Where the value of that capital increases
switching costs, then the incentive to behave opportunistically recedes for several
reasons:

The client wishes to preserve the capital value, hence benefits

The contractor focuses upon repeat business with existing client rather than
behaving opportunistically to secure new business at higher cost
Trust has built up a barrier of entry to other competitors

The solution for the contractor, therefore, is to invest, hence add service or product
value that is greater than the cost savings clients derive from switching suppliers. In
the case of construction, the value of investment across a range of areas will need to
be considerable to achieve such a result. New procurement methods, project
innovations and some shift away from the blame culture have helped, yet it is
probable that considerable investment is still needed, including investment in the
areas or relationships and specifically trust in order to reinforce the new procurement
processes as well as raise the barriers to competition through client management. The
level of investment and value of collaborative and other sorts of capital must be
higher than the incentives for switching under the most intense competitive market
conditions. The value must match client needs to secure loyalty from key clients.

In summary, market forces are a significant test of trust. They can provide a powerful
and over-riding force. However, it is clear that the requirement to operate with a
willingness to trust is only sustainable with long term commitment amongst parties,
which includes commitment to invest and maintain trusting behaviours that add value.
This is the case for both parties in the client-contractor dyad. This completes the
framework, shown in Figure 27.

Trust in the Market

Client

Operational Basis for Trust:

inputs of concepts, strategies,
Levels of Trust Client
systems and tools
Senior Levels
Components Conditions of of Corporate
for Trust Trust Management Client

Project Team Evidence

Management of Trust

Characteristics Junior Levels Client

of Trust of Corporate
Management
Client

Figure 27. Framework of Trust

Developing and Managing Trust

The analysis has shown that trust is an attitude and disposition. It builds in
relationships that are working and is a foundation for both their maintenance and
deepening the commitment. It has also been argued that social values are key to
providing the context for maintenance and development in the face of external factors,
particularly opportunistic and deceptive behaviours. Within the enterprise, trust is not
a passive matter but can be fostered, first amongst staff within the business and then
in relationships across organisational boundaries. In construction, the client-
contractor interface poses particular difficulties because of the features of the project
working environment. However, it has also been shown that trust acts as
collaborative capital and thus adds value in the form of service benefits and
profitability for the two respective parties. Over several contracts this adds into the
relationship value of the client-contractor.

Therefore, the principal question raised in the paper has been addressed with the
conclusion that trust can be developed and managed. Within an enterprise this can be
carried out in a similar way to applying any other management concept, such as
supply chain management or the learning organization. There is one notable
difference. Trust cannot be directly observed and therefore investment cannot be
direct. It has to be carried out through encouraging certain sorts of behaviour. This
can be reinforced through systems and good communication, which may need further
investments to facilitate conditions of trust in particular.

There are wider issues for an enterprise, especially contractors. It has been shown
that the culture of accountability in society generally and construction in particular
(see Egan 1998) is in conflict with the advocacy of trust by the same powers and a
contractor will need to address that conflict within the various industry fora as well as
in relation to clients and government. However, their arguments will only carry
weight where the willingness to trust has been evident in the market, with further
desire to developing trust using the framework

Conclusions
The paper has articulated the importance and workings of trust between the client and
contractor. It has demonstrated that the concept of trust is complex. Trust can be
understood as the “bottom line” of the business relationship in as much complexity as
profit and loss can be understood as the bottom line of the balance sheet. Trust has
the following elements: characteristics, components and conditions of trust, which are
located and operate at different levels in the organisation and in the marketplace. As
such trust is also to be understood and evident as collaborative capital that adds
service value in enterprise operations. Whilst the supplier may wish to develop trust,
its value depends upon the perceptions and expectations of both parties in the dyad.
The sum of activity across a series of relationships will affect the perception of trust
in the market. Trust needs to be developed in and as part of the market, yet be robust
enough to resist countervailing forces.

The importance of analysing trust in a framework is twofold. First, the elements of

trust have been identified. Second, and arising from identifying the elements, is the
implication that trust can be developed. Developing trust may arise out of
relationships. It is also active and thus constitutes a management process. Activating
detailed management processes to build trust is beyond the scope of this paper and is
a research issue for investigation.

The understanding has been developed in the paper in such a way that facilitates
moving from the conceptual elements of trust to the normative process of exploring
how trust can be developed in enterprise relationships. The next steps for research are
to examine how these elements of trust can be understood in specific contexts, which
will help refine the analysis and provide insights into activating detailed management
processes to build trust.

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