The moderating role of trust in SME owner/managers’ decision-making about collaboration

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Brunetto, Y & Farr-Wharton, R 2007, 'The moderating role of trust in SME owner/managers’ decision-making about collaboration', Journal of Small Business Management, vol. 45, no. 3, pp. 362-387.

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This paper analyzes the impact of trust and trust agents on small to medium-sized enterprises' (SMEs) ability to derive benefits from it. The findings suggest that trust is a significant factor moderating the way SME owners/managers perceive the potential benefits of networks. These findings support earlier research that posited that networking provides an avenue for SME owners/managers to learn about potential business opportunities. However, Australian owner/managers that belong to networks do not demonstrate behavior and practices typical of either explorative or exploitative networks. Instead, the findings suggest that in addition to the typical networks, a third type of network should be added to the literature—embryo-explorative networks. Such networks describe SMEs owners/managers who attend network meetings and report on what they learn about new opportunities from the networks; however, they do not tend to engage in typical collaborative activities (such as joint marketing venture) as described in the networking literature. Embryo-explorative networks are defined as those that have yet to develop into the explorative networks—probably because there has been insufficient time to build trusting relationships required to foster collaborative ventures that involve some risks.

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