Relationships in Business Markets: An Empirical Examination of Trust, Reliance, and Commitment

Past years have seen a plethora of studies on the construct of trust in business relationships. Despite the significance of trust in developing relationships, research on trust still has two main deficiencies. First, previous studies attempted to stretch the concept of trust from interpersonal towards interorganizational relationships which resulted in a cross-level fallacy, as the emotional characteristic of trust only makes sense at the interpersonal level. Second, despite the obvious benefits of trust, long-term and successful business relationships not based on trust can exist, as relationships between firms are invariably based on considerations of mutual interest. Trust is not the only construct enabling such mutual interest. To develop the concept of trust as exemplified in the current literature on business relationships, this study uses an argument proposed in the study by Mouzas et al. (2007) and validates the distinct importance of interorganizational reliance vis-à-vis interpersonal trust in business markets. Despite the importance of issues around reliance in business relationships, there exists a remarkable absence of studies on reliance in business marketing research. This paper distinguishes between trust and reliance and applies them respectively to the interpersonal and interorganizational levels. We use data from 404 companies in the construction industry to empirically examine the effects of trust, reliance and commitment on several key indicators of relationship quality, including communication, social satisfaction, economic satisfaction and long-term orientation. Our analysis using Structural Equation Modeling shows that trust is positively related to affective commitment, social satisfaction and communication, while reliance is positively related to behavioral commitment, economic satisfaction, and long-term orientation. This supports trust and reliance as the key factors which distinctly affect interpersonal and interorganizational relationships and thus have different effects on business relationship