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Trust is an important factor in building a successful collaboration, but it
takes time to develop. How can a company evaluate the trustworthiness
of a potential partner AND what steps can be taken toward
building trust from the earliest stages of the collaboration? Justify your
answer.
IMPORTANT:
Collaboration success.(How to build trust, which
kind of trust, Types of trust)
Literature.(Different views)
Implementation
International
joint ventures Evaluating Trustworthiness of a Potential Partner
Name
Institution/Affiliation
Date
1.0
Introduction
To
accurately assess the trustworthiness of a business partner is not easy. This
exercise is often biased as it is in most cases one-sided. For example, a
company will evaluate the trustworthiness of the company it plans to invest
into without appreciating the company’s insight of its own trustworthiness. Companies
look for partnerships both internally and externally so that to access added
value concerning expertise, products and complementary services. Madueno and
Garcia (2015, p. 27) found out that the present-day business environment is
dependent on the ability to quickly establish and build trust this is because
of an increase in strategic alliances and partnerships in business. Before any
ratification of formal partnership deals, companies tend to strategically focus
more on the partners' core competence level and high-value activities. Successful
business collaborations are dependent on the ability of business partners to
build trust; however, it takes time to develop.
2.0
Collaboration success
Types
of trust in business collaboration
In
the case that a business has multiple partners trust is very popular in
determining the structure of ownership and business operation. For instance,
where a business possesses various tangible assets characterized by the going
concern of trading business. The popularity of trust among business partners relates
to the benefits associated with income distribution and assets protection,
among other factors. Two kinds of trust determine business collaboration:
personal and procedural trust.
Personal trust
Personal trust can be termed as the kind of trust that
defines an interpersonal relationship between two individuals. Therefore, this
is the willingness of a company’s owner to trust another owner so that they can
form business collaboration. This kind of trust takes a significant amount of
time to come into existence. An owner of company assesses the integrity and
honesty levels of another owner through close monitoring of specific aspects of
a company’s business operations and organizations. This provides a platform
with which the intentions and the willingness to do business if entirely
determined. According to Hurwitz and Hurwitz (2015, p. 147) from these
particular expectations, the desire of a business owner to get into a
collaboration with a company either grows or erodes. The relationship between
collaborating company owners is built on trust and the willingness of one to
fight for the greater common good. However, personal trust cannot be built proactively;
it cannot just happen because certain business owners want it. In most case,
personal trust evolves slowly and situational, but most business today do not
have the patience to allow that to happen at a leisurely pace.
Procedural trust
The
second kind of trust is very crucial in the initial stages of business
collaboration between companies. Procedural trust can be built quickly and
proactively; thus it is easy for companies that want to form a partnership to
build a foundation of sustainable trust. This kind of trust involves the
process where consenting companies agree to trust each other by placing their
trust in a transparent procedure that they execute together or a conventional
structure (Madeuno & Garcia, 2015, p. 30). Typically, is the ability to collaborate
companies to establish precise, reliable, and provable steps and procedures
characterized by checks and balances, this enables the interested parties to
create a long-term and fulfilling relationship. This kind of business
collaboration is founded upon organizational trust, and subsequently, personal
trust can also be built between company owners.
The
concept of procedural trust has been built from a wide range of project
management disciplines, human resource practices, and societal structures. The
method of procedural justice can be credited to result in procedural trust as
it involved a situation where a defendant stood before a judge where facts and
stores were heard. According to Morley (2016, p. 2149), the idea of procedural
trust is grounded in the beliefs that companies can define the process in which
they first agree to trust in the verifiable steps. Procedural trust forms the
precedence upon which personal trust between company owners is established; as
such the process ensures that trust is developed so that a business partnership
can be sustained into the future. The critical advantage of procedural trust
over personal trust is that it can be built proactively, with a plan developed
by and agreed on by both business partners.
Steps
for building trust
Hurwitz and
Hurwitz (2015, p. 147) assert that the process where companies want to
establish or repair the business collaboration should be guided by a
transparent process. This practice should be ascertained by the interested
parties so that the objectives of the partnership can be aligned. Besides,
through such a process of building a long-term relationship, risks and challenges
will also be identified and so on. The method of establishing trust between
business partners ready to collaborate follows the followings steps:
i.
Placement
of interests and objectives
This step involves the process were consenting companies come together and agree on the specific goals that will determine the business collaboration. It is a process that is...