Drivers of interpersonal and inter-unit trust in multinational corporations

Abstract

Purpose – This chapter explores the determinants of trust, a manifestation of the relational dimension of social capital, between interaction partners in multinational corporations at interpersonal and inter-unit levels of analysis.

Methodology – The study is based on two quantitative data sets from the Finnish subsidiaries of foreign MNCs, one at the individual level and another at the unit level (n= 265/102).

Findings – Our results indicate that the drivers of trust exhibit similar patterns across both levels of analysis, but are stronger at the interpersonal level. Trust was significantly and positively related to the length of the relationship between the two individuals or units, and to the frequency of the communication between them whereas it was found to be unrelated with cultural distance.

Limitations – The key limitations of the study were as follows. First, the samples at both levels were relatively small, a factor that may partly explain why some of the statistical relationships were relatively weak. Second, the study was carried out in one location only, and our findings need to be corroborated in other cultural settings. Third, we only examined the level of trust from one side of the relationship, as a dyadic analysis was not possible with the present data.

Practical implications – For practicing managers, the main message from our research is that communication frequency and the length of the relationship matter for the relational social capital that exists within MNCs – both at the interpersonal and unit levels.

Citation

Mäkelä, K., Barner-Rasmussen, W. and Björkman, I. (2008), "Drivers of interpersonal and inter-unit trust in multinational corporations", Feldman, M.P. and Santangelo, G.D. (Ed.) New Perspectives in International Business Research (Progress in International Business Research, Vol. 3), Emerald Group Publishing Limited, Leeds, pp. 59-80. https://doi.org/10.1016/S1745-8862(08)03004-5