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1 – 10 of 14The purpose of this paper is to examine the supervening loss of inter-organisational trust in long-term commercial contracts. The underlying research question is whether contract…
Abstract
Purpose
The purpose of this paper is to examine the supervening loss of inter-organisational trust in long-term commercial contracts. The underlying research question is whether contract law – the legal institution regulating economic exchanges – should intervene and enable a party to a long-term commercial contract to extricate itself from a situation where a relationship of trust has broken down irretrievably.
Design/methodology/approach
This paper uses doctrinal methodology and theoretical conceptualisation to answer the underlying research question. The legal instrument chosen for analysis purposes is the UNIDROIT Principles of International Commercial Contracts. This paper also draws on extant literature on inter-organisational trust (including conceptual and empirical studies) to support the arguments and propositions. Furthermore, this study proceeds to assess the substantive justifiability of the proposed remedial measure using four normative values: legal certainty and predictability, protection of the performance interest, economic efficiency and the preservation of the relation.
Findings
The central argument put forward in this paper is the reformulation of draft Article 6.3.1 proposed by the UNIDROIT Working Group on Long-Term Contracts, which confers a novel right to terminate for a compelling reason. This paper presents a multidimensional model of inter-organisational trust that would serve as the conceptual framework for the proposed reformulation of the provision and establishes a coherent juridical basis for the legal solution that would accord with the Principles of International Commercial Contracts’ general remedial scheme. As for the normative assessment, this paper demonstrates that the proposed remedial measure would significantly promote efficient outcomes and positively serve the norms of legal certainty, protection of the performance interest and the preservation of the relation.
Originality/value
This paper addresses the lacuna in current legal scholarship in relation to the adverse socio-economic effects following trust violation and deterioration in inter-organisational relationships. Additionally, the propositions and findings should contribute to the workings of the UNIDROIT in adopting new rules and principles that would serve the special requirements of cross-border trade.
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Tim Schwertner and Matthias Sohn
There is emerging evidence in the accounting literature that investors react negatively to corporate greenwashing. But does that hold for all investors, or do different types of…
Abstract
Purpose
There is emerging evidence in the accounting literature that investors react negatively to corporate greenwashing. But does that hold for all investors, or do different types of investors react differently? This paper aims to study retail investors’ responses to media reports on corporate greenwashing and how these responses depend upon the investors’ social value orientation. The authors argue that media reporting on corporate greenwashing negatively affects the rationale for allocating funds to firms engaging in greenwashing. The authors also expect this reaction to be stronger for prosocial investors compared to proself investors.
Design/methodology/approach
The authors conduct an online experiment with 229 participants representing retail investors in the German-speaking countries.
Findings
The results show that retail investors who received media reports on deceptive disclosure invest more funds in the company that does not engage in greenwashing (and less in the firm that engages in greenwashing) than investors who did not receive these reports. The authors’ results provide novel evidence that this effect primarily holds for investors with a prosocial value orientation. Finally, the authors’ data show that lower trust in the firm that engages in greenwashing partially mediates the effect of media reports on investor choices.
Originality/value
The authors provide unique evidence how different types of investors react to media reports on greenwashing. The authors find that moral motives, rather than risk-return considerations, drive investor responses to greenwashing. Overall, these findings support the important function of the media as an intermediary in stock market participation and highlight the pivotal role of individual traits in investors’ responses to greenwashing.
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Qian Zhang and Huiyong Yi
With the evolution of the turbulent environment constantly triggering the emergence of a trust crisis between organizations, how can university–industry (U–I) alliances respond to…
Abstract
Purpose
With the evolution of the turbulent environment constantly triggering the emergence of a trust crisis between organizations, how can university–industry (U–I) alliances respond to the trust crisis when conducting green technology innovation (GTI) activities? This paper aims to address this issue.
Design/methodology/approach
The authors examined the process of trust crisis damage, including trust first suffering instantaneous impair as well as subsequently indirectly affecting GTI level, and ultimately hurting the profitability of green innovations. In this paper, a piecewise deterministic dynamic model is deployed to portray the trust and the GTI levels in GTI activities of U–I alliances.
Findings
The authors analyze the equilibrium results under decentralized and centralized decision-making modes to obtain the following conclusions: Trust levels are affected by a combination of hazard and damage (short and long term) rates, shifting from steady growth to decline in the presence of low hazard and damage rates. However, the GTI level has been growing steadily. It is essential to consider factors such as the hazard rate, the damage rate in the short and long terms, and the change in marginal profit in determining whether to pursue an efficiency- or recovery-friendly strategy in the face of a trust crisis. The authors found that two approaches can mitigate trust crisis losses: implementing a centralized decision-making mode (i.e. shared governance) and reducing pre-crisis trust-building investments. This study offers several insights for businesses and academics to respond to a trust crisis.
Research limitations/implications
The present research can be extended in several directions. Instead of distinguishing attribution of trust crisis, the authors use hazard rate, short- and long-term damage rates and change in marginal profitability to distinguish the scale of trust crises. Future scholars can further add an attribution approach to enrich the classification of trust crises. Moreover, the authors only consider trust crises because of unexpected events in a turbulent environment; in fact, a trust crisis may also be a plateauing process, yet the authors do not study this situation.
Practical implications
First, the authors explore what factors affect the level of trust and the level of GTI when a trust crisis occurs. Second, the authors provide guidelines on how businesses and academics can coordinate their trust-building and GTI efforts when faced with a trust crisis in a turbulent environment.
Originality/value
First, the interaction between psychology and innovation management is explored in this paper. Although empirical studies have shown that trust in U–I alliances is related to innovation performance, and scholars have developed differential game models to portray the GTI process, building a differential game model to explore such an interaction is still scarce. Second, the authors incorporate inter-organizational trust level into the GTI level in university–industry collaboration, applying differential equations to portray the trust building and GTI processes, respectively, to reveal the importance of trust in CTI activities. Third, the authors establish a piecewise deterministic dynamic game model wherein the impact of crisis shocks is not equal to zero, which is inconsistent with most previous studies of Brownian motion.
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Arpita Agnihotri, Carolyn M. Callahan and Saurabh Bhattacharya
Leveraging Emerson’s theory of power and motivated reasoning, this study aims to explore how the net power of an individual and actual, instead of perceived, vulnerability results…
Abstract
Purpose
Leveraging Emerson’s theory of power and motivated reasoning, this study aims to explore how the net power of an individual and actual, instead of perceived, vulnerability results in asymmetric trust and distrust development in a dyadic relationship.
Design/methodology/approach
Based on extant literature and gaps in the literature, this conceptual paper hypothesises and proposes trust formation based on power dynamics and vulnerability.
Findings
This research extends the knowledge base by exploring the role of actual vulnerability over perceived vulnerability in trust formation and distrust formation.
Research limitations/implications
The research propositions imply that the dyadic trust formation process is not rational, and trust itself is not symmetrical but asymmetrical. The net power possessed by one individual over the other drives trust. Net power balance determines the actual vulnerability of the focal individual, and then the individual, through motivated reasoning, trusts or distrusts another individual. Scholars, going forward, could explore how trust formation varies at group and firm levels.
Originality/value
Extant literature has not explored the role of power imbalance in determining actual (versus perceived) vulnerability that influences trust formation between parties. The conceptual paper fills this gap.
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Jingke Sun, Xiongbiao Xie, Min Zhou and Liang Yan
While the theory and practice of open innovation networks are flourishing, green innovation in manufacturing small and medium-sized enterprises (SMEs) is stagnant. This study…
Abstract
Purpose
While the theory and practice of open innovation networks are flourishing, green innovation in manufacturing small and medium-sized enterprises (SMEs) is stagnant. This study explores the mechanism driving green innovation in manufacturing SMEs under open innovation networks based on the role of innovation platforms' relational governance.
Design/methodology/approach
A quantitative study was conducted using questionnaires to collect data from 270 manufacturing SMEs in Zhejiang Province and employing a structural equation model to test the developed hypotheses.
Findings
The results revealed that innovation platforms' relational governance positively affects green innovation in manufacturing SMEs. Furthermore, the collaborative innovation atmosphere and risk perception mediate this relationship through a respective mediating role and a chain-mediating role.
Originality/value
This study is the first to empirically investigate the mechanism of the influence of innovation platforms' relational governance on green innovation in manufacturing SMEs, provide a new perspective for understanding the antecedents of green innovation under open innovation networks, and expand the theoretical research on open innovation management.
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Talat Islam, Farheen Rizvi, Waqas Farooq and Ishfaq Ahmed
The practice of cronyism is a pervasive problem for most businesses and a great hindrance for employees, but empirical literature on its outcomes is scant. In light of such gaps…
Abstract
Purpose
The practice of cronyism is a pervasive problem for most businesses and a great hindrance for employees, but empirical literature on its outcomes is scant. In light of such gaps, the objective of this study is to examine the relationship between organizational cronyism and employees' silence behavior through the mediating role of felt violation and the moderating role of continuance commitment.
Design/methodology/approach
A time-lagged cross-sectional survey comprising 226 respondents is carried out in a metropolitan city of a developing country (Lahore, Pakistan). The respondents were selected using the convenience sampling technique.
Findings
The findings reveal that organizational cronyism influences employees' silence (acquiescent and quiescent) both directly and indirectly (via felt violation). However, continuance commitment was noted to work as a boundary condition only between felt violation and quiescent silence.
Research limitations/implications
Although the study deals with common method bias by collecting data in two waves, it may restrict causality. The findings not only have implications for the academicians, but also contribute to the conservation of resources theory. This study suggests organizations develop and implement a comprehensive intervention strategy that focuses on both prevention and damage control as a result of organizational cronyism.
Originality/value
Drawing upon the conservation of resources theory, this study adds value to the literature by empirically investigating the outcomes of cronyism at work. Moreover, the outcomes and mechanisms under consideration have largely been ignored in the literature.
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Patrizia Di Tullio, Matteo La Torre, Michele Antonio Rea, James Guthrie and John Dumay
New Space activities offer benefits for human progress and life beyond the Earth. However, there is a risk that the New Space Economy may develop according to an anthropocentric…
Abstract
Purpose
New Space activities offer benefits for human progress and life beyond the Earth. However, there is a risk that the New Space Economy may develop according to an anthropocentric mindset favouring human progress and survival at the expense of all other species and the environment. This mindset raises concerns over the social and environmental impacts of space activities and the accountability of space actors. This research article explores the accountability of space actors by presenting a pluralistic accountability framework to understand, inspire and change accountability in the New Space Economy. This study also identifies future research opportunities.
Design/methodology/approach
This paper is a reflective and normative essay. The arguments are developed using contemporary multidisciplinary academic literature, publicly available evidence and examples. Further, the authors use Dillard and Vinnari's accountability framework to examine a pluralistic accountability system for space businesses.
Findings
The New Space Economy requires public and private entities to embrace hybrid and pluralistic accountability for their social and environmental impacts. A new way of seeing the relationship between human life, the Earth and celestial space is needed. Accounting language is used to mirror and mobilise broader forms of responsibility in those involved in space.
Originality/value
This paper responds to the AAAJ's special issue call for examining how accountability can be ensured in the New Space Age. The space activities businesses conduct, and the anthropocentric view inspiring their race toward space is concerning. Hence, the authors advocate the need for rethinking accountability between humans and nature. The paper contributes to fostering the debate on social and environmental accounting and the accountability of space actors in the New Space Economy. To this end, the authors use a pluralistic accountability framework to help understand how the New Space Economy can face the risks emanating from its anthropocentric mindset.
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Zuzana Bednarik and Maria I. Marshall
As many businesses faced economic disruption due to the Covid-19 pandemic and sought financial relief, existing bank relationships became critical to getting a loan. This study…
Abstract
Purpose
As many businesses faced economic disruption due to the Covid-19 pandemic and sought financial relief, existing bank relationships became critical to getting a loan. This study examines factors associated with the development of personal relationships of rural small businesses with community bank representatives.
Design/methodology/approach
We applied a mixed-method approach. We employed descriptive statistics, principal factor analysis and logistic regression for data analysis. We distributed an online survey to rural small businesses in five states in the United States. Key informant interviews with community bank representatives supplemented the survey results.
Findings
A business owner’s trust in a banker was positively associated with the establishment of a business–bank relationship. However, an analysis of individual trust’s components revealed that the nature of trust is complex, and a failure of one or more components may lead to decreased trustworthiness in a banker. Small businesses that preferred personal communication with a bank were more inclined to relationship banking.
Research limitations/implications
Due to the relatively small sample size and cross-sectional data, our results may not be conclusive but should be viewed as preliminary and as suggestions for future research. Bankers should be aware of the importance of trust for small business owners and of the actions that lead to increased trustworthiness.
Originality/value
The study extends the existing knowledge on the business–bank relationship by focusing mainly on social (instead of economic) factors associated with the establishment of the business–bank relationship in times of crisis and high uncertainty.
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Sukhwant Kaur Sagar, Olugbenga Timo Oladinrin, Mohammed Arif, Amit Kaushik and Rubina Islam
This study aims to focus on model development to analyse key factors affecting trust in virtual project teams (VPTs).
Abstract
Purpose
This study aims to focus on model development to analyse key factors affecting trust in virtual project teams (VPTs).
Design/methodology/approach
A questionnaire survey was conducted on construction professionals participating in virtual teams. Structural equation modelling technique was performed to establish the effect of relevant factors on trust-building in VPTs.
Findings
Team performance is highly affected by the trust among the team members. Trust building can be enhanced by improving the quality of team communication, organisation culture, team bonding and team members’ characteristics.
Originality/value
The model developed in this study would benefit team productivity and team members’ learning in VPTs.
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Zuhairan Yunmi Yunan, Majed Alharthi and Saeed Sazzad Jeris
This study aims to investigate the relationship between political instability and the performance of Islamic banks in emerging countries.
Abstract
Purpose
This study aims to investigate the relationship between political instability and the performance of Islamic banks in emerging countries.
Design/methodology/approach
For a data sample of 93 Islamic banks in 20 emerging countries during the period from 2011 to 2016, the authors identify indicators that matter most for the activities of Islamic banks.
Findings
The study finds that a stable government and law and order are positively correlated with the health of Islamic financial institutions. On the other hand, corruption and military involvement in politics can create an unstable environment for businesses, leading to uncertainty and risk. The study also reveals that Islamic banks operating in regions or communities with lower risk of socio-economic conditions tend to exhibit higher levels of profitability.
Originality/value
Overall, the study provides valuable insights into the impact of political instability on Islamic banks in emerging countries.
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