Understanding the Roles of Trust at Different Stages in Strategic Alliances: A Theoretical Review

Strategic management literature has emphasized the importance of developing trust among alliance partners. Understanding the roles of trust is essential because it is considered to have a substantial impact on the collaboration among alliance partners, and as a result, on the achievement of alliance objectives. Despite the interests in the roles of trust, our understanding of this issue is fragmented. Adopting multiple theories and the process model of strategic alliances, this paper aims to provide a more integrative understanding of the roles of trust in strategic alliances. This paper holds that the adoption of one theory has limitations in promoting a comprehensive understanding of this issue and reviews diverse theories to investigate the roles of trust at different stages in strategic alliances. Transaction cost economics, real option, organizational learning, and social network theories are juxtaposed and compared. First, this paper reviews major assumptions and theoretical logics of these theories and examines the rationales for strategic alliances each theory proposes. Next, I examine the implications that each theory provides for the understanding of the roles of trust. Drawing on the process model of strategic alliances, this review highlights how the trust among alliance partners influences the strategic alliances at a formation stage, an operation stage, and an outcome stage of strategic alliances.