Marketing Letters 11:1 (2000): 81±95

# 2000 Kluwer Academic Publishers, Manufactured in The Netherlands

Organizational Trust and Inter®rm Cooperation: AnExamination of Horizontal Versus Vertical Alliances

ARIC RINDFLEISCH

University of Arizona, Eller College of Business and Public Administration, Department of Marketing,

320 McClelland Hall, Tucson, AZ 85721

E-mail: aric@bpa.arizona.edu

Abstract

Over the past decade, trust has emerged as the central means of achieving cooperation in interorganizational

relationships. Past empirical inquiries have largely focused on the role of trust within the context of vertical

relations between channel members or service providers and their clients. Thus, little is known about the nature or

the role of trust in horizontal relations. A number of interorganizational scholars suggest that the nature and the

effect of behavioral norms such as trust may be widely different in horizontal versus vertical relationships. This

study examines the effect of relationship form on organizational trust using data from a survey of 106 U.S. ®rms

who have recently participated in either horizontal or vertical R&D alliances. The results of this survey indicate

that participants in vertical alliances display higher levels of organizational trust than participants in horizontal

alliances. In addition, while organizational trust enhances cooperation in vertical alliances, trust is unrelated to

cooperation in horizontal alliances.

Key words: interorganizational relationships, trust, cooperation, alliances

Introduction

As detailed in the marketing literature over the past two decades, a growing number of

®rms are participating in long-term interorganizational relationships. These relationships

take a variety of forms, ranging from working partnerships between manufacturers and

retailers (Anderson and Narus, 1990), to relational exchanges between service providers

and their clients (Moorman, Deshpande, and Zaltman, 1992), to co-marketing alliances

(Bucklin and Sengupta, 1993). A common thread among these various types of inter-

organizational relationships is the dif®culty of achieving and sustaining cooperation

among participants. Although cooperation may be achieved through a variety of mechan-

isms, a number of studies have focused on the central role of trust as a means of

establishing and sustaining cooperation in interorganizational relationships (e.g., Anderson

and Narus, 1990; Moorman, Deshpande, and Zaltman, 1992; Morgan and Hunt, 1994).

Although investigations of the relationship between trust and cooperation are fairly

widespread, these past studies focus almost exclusively on vertical relations between

channel members (for an exception see Smith and Barclay, 1997). Thus, the nature of the

relationship between trust and cooperation in horizontal relations has not been system-

atically investigated. However, as a variety of scholars have observed, there are many

reasons to suspect that the nature of inter®rm relations may be widely different in

horizontal versus vertical relationships (e.g., Achrol, 1997; Sheth and Sisodia, 1999). As

recently noted by Sheth and Sisodia (1999), `̀ . . . we have good theories on vertical

integration (in economics as well as marketing) but not on horizontal integration or

alliances'' (p. 84).

In this study, I seek to address this concern by examining the relationship between

organizational trust and inter®rm cooperation across horizontal versus vertical interorga-

nizational relationships. Speci®cally, I suggest that the level of organizational trust is lower

and the effect of organizational trust on inter®rm cooperation is weaker in horizontal

relations (i.e., cooperation among competitors) than vertical relations (i.e., cooperation

among channel members). Thus, this research provides a test of the robustness of previous

empirical research on trust by focusing more closely on the type of relationship in which

trust unfolds.

2. Background and Hypotheses

Trust is broadly viewed as a highly effective means of fostering cooperation across all

types of interorganizational relationships (Doney and Cannon, 1997; Morgan and Hunt,

1994; Smith, Carroll, and Ashford, 1995). As Doney and Cannon (1997) suggest, `̀ It is

now well established that trust supports exchange'' (p. 36). However, on closer inspection,

it appears that the nature and role of trust in exchange activity is dependent upon the form

of the relationship in which this exchange takes place. For example, in an early study of the

role of interpersonal trust on information utilization, Moorman, Deshpande, and Zaltman

(1992) ®nd that the effect of trust differs between interorganizational versus intraorganiza-

tional dyadic relationships. In a recent replication of this study, Grayson and Ambler

(1999) ®nd that trust is related to advertising service usage by managers in short-term

relationships but not long-term ones. As noted by Smith and Barclay (1997), the `̀ relative

importance [of trust] may depend on the speci®c relationship context'' (p. 6). In sum, a

growing body of research suggests that the role of trust on inter®rm cooperation is

dependent upon the nature and form of the relationship in which this trust unfolds.

Unfortunately, little theoretical explanation exists in order to understand the role of trust

in various forms of interorganizational relationships. However, a careful review of the

interorganizational relationship literature provides conceptual insights regarding the

differential role of trust in horizontal versus vertical relationships. In brief, this literature

suggests that ®rms in horizontal alliances should display lower levels of organizational

trust and a weaker relationship between organizational trust and inter®rm cooperation

compared to ®rms in vertical alliances. This differential role of trust is largely a result of:

(1) higher opportunism, (2) lower interdependency, and (3) stronger institutional and

interpersonal linkages among horizontal collaborators compared to their vertical counter-

parts.

82 RINDFLEISCH

2.1. Higher Opportunism

Interorganizational relationship scholars generally view trust as an effective means of

allowing a ®rm to reduce the risks of opportunistic self-interest seeking by exchange

partners (Doney and Cannon, 1997; Ganesan and Hess, 1997). However, while trust may

enhance cooperation in vertical alliances by developing con®dence in one's fellow

collaborators, this effect may be mitigated by the competitive tension that underlies

horizontal alliances. For example, Bucklin and Sengupta (1993) note that in horizontal

relations like co-marketing alliances, `̀ The potential for opportunism is high as partners

may use the alliance only as a means to gain market position at the expense of a partner''

(p. 33). Thus, the high level of opportunism characteristic of horizontal relationships may

lead to lower levels of trust and may make trust a less effective form of governance, as

behavioral norms may be unable to quench a ®rm's suspicion of the motives of its

collaborator-competitors. This is the basic argument of transaction cost economists such as

Williamson (1993), who suggest that inter®rm relationships are more likely to exhibit

`calculativeness' than real trust.

This supposition of the inability of horizontal relationships to overcome the fear of

opportunism is supported by recent research by Park and Russo (1996), who ®nd that joint

ventures in which partners are direct competitors are more likely to fail than joint ventures

in which partners do not compete. They suggest that this failure is due to the fact that goals

are more likely to con¯ict among venture participants who are direct competitors, and

conclude that `̀ cooperating with competitors is risky business. . .as the incentives to act

opportunistically appear to motivate actions that threaten and frequently undermine joint

ventures'' (p. 887).

2.2. Lower Interdependency

Trust is highly associated with dependency (Doney and Cannon, 1997; Moorman,

Deshpande, and Zaltman, 1992). According to Moorman, Deshpande, and Zaltman

(1992), trust is de®ned as `̀ a willingness to rely on an exchange partner in whom one

has con®dence'' (p. 82, italics in original). Relying on the goodwill of an exchange partner

is a risky endeavor, but may be a necessity if a ®rm is dependent upon another organization

for valuable resources (Pfeffer and Salancik, 1978).

According to Galaskiewicz (1985), horizontal and vertical interorganizational relations

differ in terms of resource dependency. Speci®cally, while vertically-connected ®rms

provide importance sources of needed inputs through which a ®rm can alleviate

dependency problems, horizontally-connected ®rms do not typically serve this function.

This supposition is echoed by Gulati (1995), who notes that ®rms from different industries

will have greater interdependence, because they are likely to possess complementary sets

of skills, compared to ®rms from a single industry. Finally, Doney and Cannon (1997)

suggest that different levels of dependence among relationship participants are likely to

`̀ moderate the development and in¯uence of trust'' (p. 47). Recent research by Mowrey,

Oxley, and Silverman (1996) provides indirect support for this dependency argument, as

ORGANIZATIONAL TRUST AND INTERFIRM COOPERATION 83

these authors ®nd that ®rms involved in alliances with collaborators in the same product

line (i.e., horizontal relations) engage in lower levels of knowledge sharing compared to

®rms in different product lines (i.e., vertical relations). One reason for this differential level

of cooperation may be due to the fact that the lower level of resource dependency among

horizontal alliance participants provides less incentive to develop trusting relations

compared to their vertical counterparts.

2.3. Stronger Institutional and Interpersonal Connections

In addition to having lower levels of interdependency, participants in horizontal inter-

organizational relationships are also likely to display stronger institutional and interper-

sonal connections compared to participants in vertical interorganizational relationships. I

suggest that these institutional and interpersonal ties provide alternative routes of

cooperation and may serve to both lower the level of organizational trust in horizontal

alliances as well as reducing the impact of organizational trust on inter®rm cooperation.

A broad base of literature suggests that ®rms engaged in horizontal collaboration can

promote inter®rm cooperation through a variety of institutional factors not available to

®rms in vertical relations. For example, prior to establishing a formal relationship,

horizontally-related ®rms are likely to have participated in a number of informal

information sharing activities via a broad range of institutional supports, such as trade

associations (Vives, 1990), established norms of behavior (Thomas and Soldow, 1988),

and long-standing networks of know-how trading among engineers and technical person-

nel (von Hipple, 1987). In addition, horizontally-related ®rms are likely to view themselves

as belonging to a common technological community with a shared sense of history

(Powell, Koput, and Smith-Doerr, 1996; Sabel, 1993). This shared sense of community

and history may allow interorganizational cooperation to emerge in the absence of trust.

For example, Sabel (1993) shows that many industries share a common heritage and that

this common heritage provides a foundation for interpersonal friendships and association

memberships.

Although it seems unlikely that strong interpersonal ties would develop among

competing ®rms, previous research suggests that ®rms in horizontal alliances are likely

to share a web of interpersonal linkages. Innovation scholars ®nd that cooperative

information sharing is common among engineers in many high-tech industries such as

steel minimills, aerospace ®rms, and waferboard manufacturers (von Hipple, 1987). In

addition to informal linkages among engineers and technical personnel, managers of ®rms

in the same industry may also belong to a common social circle, as they are likely to share

similar educational backgrounds and may often belong to the same associations (Chandler,

1977). These informal linkages among engineers and managers form what Schein (1996)

refers to as `occupational communities' in which members share common assumptions and

maintain contact with other members.

In sum, previous research suggests that horizontal interorganizational relationships will

display greater opportunism, lower interdependency, and stronger institutional and inter-

personal ties than vertical interorganizational relationships. These three factors are

84 RINDFLEISCH

expected to result in both (1) a decrease in the overall level of organizational trust, and (2)

a weakened impact of organizational trust on inter®rm cooperation for ®rms engaged in

horizontal relationships.

H1: Organizational trust will be higher among ®rms in vertical alliances compared to

®rms in horizontal alliances.

H2: The relationship between interorganizational trust and inter®rm cooperation is

moderated by alliance form. Speci®cally, the relationship between cooperation and

trust will be stronger among ®rms in vertical alliances than ®rms in horizontal

alliances.

3. Method

3.1. Sample and procedures

The sampling frame for this study is U.S. ®rms who have recently participated in

cooperative R&D alliances. These alliances were identi®ed through the Federal Register,

which publishes the names and locations of ®rms who are seeking antitrust protection for

R&D collaborative ventures in accordance with the National Cooperative Research Act of

1984. I examined 153 ventures ®led during the period January 1, 1989 to March 15, 1995.

Within each venture, I identi®ed between one to six ®rms for inclusion in the sample

depending on the number of ®rms in each venture and how many of the participants had

been included from an earlier venture. If an alliance had six or fewer participants, I

included all members in the sampling frame. For alliances containing more than six

participants, I used a random selection procedure. Because international alliances may be

systematically different than domestic alliances, I only included ®rms that were either U.S.

companies or a domestic division of a MNC. In order to maximize the diversity of

organizations included in this study, ®rms who belonged to multiple R&D alliances (as

®led in the Federal Register) were sampled only once. At the end of this process, I ended

up with 380 ®rms.

The next stage of the sampling procedure involved ®nding the name of a key informant.

As detailed by Campbell (1955), the key informant approach allows researchers to obtain

information about a group (i.e., a ®rm) by collecting data from selected individuals within

that group who are highly knowledgeable about the phenomena under study. The targeted

key informants were vice presidents of research and development (or persons with

comparable positions) within each ®rm. R&D vice presidents are ideal respondents for

this type of study due to their high levels of knowledge about the ®rm, its strategic

environment, and its alliance activity (Link and Bauer, 1989).

Prior to questionnaire mailing, each key informant (or his or her secretary) was

precontacted by telephone. The objective of this telephone contact was (1) to assess the

informant's ability to serve as a key informant by asking if the executive was knowledge-

able about the venture in question, (2) to obtain cooperation by stressing the importance of

this study, and (3) to verify the informant's mailing address. This process eliminated 39

ORGANIZATIONAL TRUST AND INTERFIRM COOPERATION 85

®rms in which no telephone contact was possible or which the ®rm claimed to know

nothing about the venture. Thus, the ®nal sampling frame consisted of 341 ®rms.

The key informant in each ®rm was mailed a cover letter, a one page summary

description of their R&D alliance, a survey, and a postage-paid reply envelope. As an

incentive to participate, respondents were told they would be provided with a customized

summary report of the main results of the study. Approximately three weeks after this

initial mailing, non-respondents were telephoned, followed by a handwritten postcard one

week later as a reminder. Respondents who did not reply within six weeks were remailed a

second complete set of survey materials.

The surveys for eight ®rms were returned as undeliverable and another 33 ®rms replied

that they were willing to participate in this study, but were unable to locate anyone who

was knowledgeable about the venture in question. This left an effective sampling frame of

300 ®rms, of which 106 usable surveys were returned for a 35% response rate. As

recommended by Armstrong and Overton (1977), potential non-response bias was

assessed via an extrapolation method of comparing early versus late respondents. No

signi®cant differences in either mean scores or variances were found for any key constructs

between early (i.e., before second mailing) and late (i.e., after second mailing) respon-

dents, indicating that non-response bias is a relatively minor concern. These 106 ®rms

represent a wide range of industries, including biosciences, chemicals, consumer goods,

electronics, publishing, and transportation, among others. No single industry accounted for

more than 5% of the total sample.

3.2. Measures

The key constructs for this study include: alliance form, inter®rm cooperation, and

organizational trust. In addition to these key constructs, I also included the number of

alliance participants, stage of product development, and relationship history as control

variables. Previous research suggests that all three of these variables may in¯uence the

degree of inter®rm cooperation (e.g., Bucklin and Sengupta, 1993; Dawes, 1980; Nueno

and Oosterveld, 1988). For example, ®rms with a history of prior dealings should be more

willing to engage in cooperative information sharing activity than ®rms engaged in their

®rst collaborative venture. A listing of the items used for measures assessed via multi-item

scales and their item-to-total correlations is detailed in the Appendix, and the intercorrela-

tions, reliability, and descriptive statistics associated with all measures are provided in

Table 1. A brief review of the origin, measurement, and psychometric assessment (via

coef®cient alpha and exploratory factor analysis with a varimax rotation) of these measures

is listed below.

Inter®rm Cooperation: As noted by Heide and Miner (1992), cooperation is a multi-

faceted phenomenon. Inter®rm cooperation is de®ned as coordinated actions taken by

alliance partners to achieve desirable mutual or singular outcomes (adapted from

Anderson and Narus, 1990, p. 45). In other words, cooperation entails both the process

of cooperating and the outcomes of this cooperative activity. Thus, I employ measures of

86 RINDFLEISCH

two separate facts of cooperation: (1) respondents' perception of coordinated action with

alliance partners (i.e., perceived cooperation), and (2) their satisfaction with the outcomes

of their cooperative alliance (i.e., outcome satisfaction). The ®rst measure is a new three-

item scale designed for this study, while the second measure is a six-item scale adapted

from Olson, Walker, and Ruekert's (1995) measure of product development outcomes.

Both measures display good reliability (a � :79 for perceived cooperation, a � :94 for

outcome satisfaction) and unidimensionality (both measures load strongly on single

factors, with an average factor loading of .84 for perceived cooperation and .87 for

outcome satisfaction). I assessed the discriminant validity of these two measures by forcing

the nine items across both scales into a single exploratory factor analysis. Using a varimax

rotation, this analysis produced a two-factor solution (which explained 75% of the

variance) in which the six outcome satisfaction measured loaded cleanly on the ®rst

factor (with an average loading of .83), while the three perceived cooperation items loaded

cleanly (with an average loading of .82) on the second factor. This suggests that these two

measures assess different facets of inter®rm cooperation.

Alliance Form: I consider alliance form as the nature of the relationship among alliance

participants. Given the conceptual distinction between horizontal versus vertical relation-

ships noted in the literature (e.g., Achrol, 1997; Galaskiewicz, 1985; Park and Russo,

1996), participants were classi®ed as being members of either horizontal or vertical

alliances. This classi®cation was derived by listing the name of each alliance participant

(drawn from the Federal Register) in the survey and asking respondents to classify each of

them as either a customer, a supplier, a competitor, or other. Based on these respondent

classi®cations, I designated alliances in which half or more of the participants were

collaborators as horizontal alliances. The remaining ventures were designated vertical

alliances. Of the 106 ®rms in the sample, 42 were members of horizontal alliances and 64

were members of vertical alliances.

Organizational Trust: Organizational trust is de®ned as `̀ con®dence in an exchange

partner's reliability and integrity'' (Morgan and Hunt, p. 23, italics added). I measured this

Table 1. Key Measure Statistics

Measure Mean SD 1 2 3 4 5 6 7

1. Perceived cooperation 4.72 1.24 (.79)

2. Outcome satisfaction 4.16 1.32 .50a (.94)

3. Alliance form 1.60 .49 .13 .07 (na)

4. Organizational trust 4.67 1.24 .45a .02 .19 (.85)

5. Stage of development 4.83 1.30 ÿ:03a .03 .07 .01 (.77)

6. Number of partners 5.24 2.68 .09 ÿ:09 ÿ:34a .02 .26b (na)

7. Relationship history 2.67 1.50 .32a .21b .15 .18 .17 ÿ:21b (na)

Note: The coef®cient alpha for each measure is on the diagonal and the intercorrelations among the measures are

on the off-diagonal. a: Statistically signi®cant at p � :01. b: Statistically signi®cant at p � :05. For alliance form,

horizontal alliance�1, while vertical alliance�2.

ORGANIZATIONAL TRUST AND INTERFIRM COOPERATION 87

construct using an adapted version (to ®t an organizational context) of the ®ve-item trust

scale developed by Moorman, Deshpande, and Zaltman (1992). This scale exhibited a high

degree of internal consistency (a � :85) and unidimensionality, as all ®ve items strongly

loaded (with an average factor loading of .83) on a single factor.

Stage of Development: I de®ne stage of product development as the stage of a new

product innovation in terms of its development cycle. Product innovations in earlier stages

of development are characterized by general forms of technology, frequent changes in

design, and a high degree of product diversity. As a measure of this construct, respondents

were asked to retrospectively assess the stage of product development at the time of

venture formation using a ®ve-item, Likert-type scale based on the work of Garud (1994),

Link and Bauer (1989), and Tushman and Anderson (1985). This measure displayed

adequate reliability (a � :77), and unidimensionality, as all ®ve items strongly loaded on a

single factor (with an average factor loading of .72).

Number of Participants: The number of participants was directly determined by counting

the number of collaborators listed in the alliance ®ling as reported in the Federal Register.

This number was adjusted accordingly if respondents listed any changes in alliance

member composition in their completed survey. The mean number of collaborators was

5.42.

Relationship History: Relationship history is de®ned as the degree of prior formal

associations between two organizations. Thus, this measure focuses on the degree of

previous formal associations between the ®rm and the other alliance participants.

Speci®cally, I used a single item to ask respondents to assess the extent to which their

®rm has participated in prior ventures (i.e., strategic alliances, joint ventures, licensing

agreements) with each of the other organizations in the alliance (using a 7-point scale

ranging from `few relationships' to `many relationships'), and developed an aggregate

measure by calculating the average score among all organizations.

4. Analysis and Results

H1 was tested using an independent t-test of mean differences in the level of organizational

trust among horizontal versus vertical alliances. Because this hypothesis is directional in

nature, I used a one-tailed test. As predicted, ®rms in vertical alliances display a higher

level of trust in their collaborators compared to ®rms in horizontal alliances

(Vertical� 4:86, Horizontal� 4:39, t� 1:95, p � :027). Thus, H1 is supported.

I tested the moderating effect of alliance form on the relationship between trust and

inter®rm cooperation (H2) by employing two separate hierarchical regression analyses

(HRA). In HRA, a test of moderation is performed by entering the individual predictor

variables ®rst followed by the product term for their interaction. A moderating effect is

88 RINDFLEISCH

con®rmed by the presence of a signi®cant two-way interaction. The independent variables

were mean centered in order to reduce the collinearity between the predictors and their

product terms. The results of these analyses are presented in Table 2. Perceived

cooperation was the dependent variable for the ®rst regression (Table 2a), while outcome

satisfaction was the dependent variable for the second regression (Table 2b). For both

regressions, organizational trust, alliance form, and their interaction were the independent

variables, and stage of development, number of partners, and relationship history were

included as control variables. As seen in Table 2, the interaction between organizational

trust and alliance form is a signi®cant predictor of both perceived cooperation (beta�:22; p � :013) and outcome satisfaction (beta� :35; p � :003). Thus, both regression

results support H2, as alliance form appears to moderate the effect of organizational trust

on inter®rm cooperation.

To better understand the nature of the moderating in¯uence of alliance form upon the

relationship between trust and cooperation, I conducted a median split of trust for both

horizontal and vertical alliances. As shown in Figure 1a, while trust is strongly associated

with perceived cooperation among ®rms in vertical alliances (low trust� 4:14, high

trust� 5:33; ; p � :0001), the relationship between cooperation and trust is weaker among

®rms in horizontal alliances (low trust� 4:20, high trust� 4:83; p � :10). Moreover, as

shown in Figure 1b, trust is positively associated with satisfaction with vertical alliances

(low trust� 3:83, high trust� 4:50; p � :10), but negatively related to satisfaction with

horizontal alliances (low trust� 4:40, high trust� 3:65; p � :07). This combined pattern

of relationships is congruent with the hypothesized effect outlined in H2.

Table 2. Test of the Moderating Effect of Alliance Form on Inter®rm Cooperation

A) Dependent Variable: Perceived Cooperation

Independent Variable Coef®cient t-value p-value

Alliance form (AF) .04 .48 .634

Organizational trust .46 5.10 .0001

AF x Trust .22 2.54 .013

Stage of development ÿ:04 ÿ:44 .662

Number of partners .18 1.89 .064

Relationship history .28 3.09 .003

Note: R2 � :36; F � 8:39; p � :0001

B) Dependent Variable: Outcome Satisfaction

Independent Variable Coef®cient t-value p-value

Alliance form (AF) .00 .04 .971

Organizational trust .11 .94 .351

AF x Trust .35 3.07 .003

Stage of development .01 .05 .962

Number of partners .02 .21 .838

Relationship history .18 1.56 .122

Note: R2 � :16; F � 2:33; p � :04

ORGANIZATIONAL TRUST AND INTERFIRM COOPERATION 89

Figure 1. Interaction of Organizational Trust and Alliance Form

90 RINDFLEISCH

5. Discussion

As noted by a number of relationship scholars, there are important differences between

vertical and horizontal interorganizational relationships in terms of the relations between

participants and the outcomes they seek (Achrol, 1997; Galaskiewicz, 1985; Park and

Russo, 1996). For example, Achrol (1997) suggests that vertical relations emphasize

`loyalty,' while horizontal relations emphasize `dialogue' (p. 65). To date, these potential

differences have received little empirical attention, as interorganizational relationship

scholars have largely focused on the dynamics and outcomes associated with vertical

relationships (e.g., Anderson and Narus, 1990; Heide and Miner, 1992; Moorman,

Deshpande, and Zaltman, 1992).

This study provides an initial attempt to understand how horizontal versus vertical

relationships may differ in their in¯uence upon inter®rm behavior. Results suggest that

inter®rm behavior, in the form of organizational trust, differs dramatically among

horizontal versus vertical alliance participants. In brief, ®rms participating in horizontal

alliances appear to be less trusting of their partners compared to ®rms in vertical alliances.

This suggests that the presence of relationship norms such as trust may not be able to

overcome the fear of opportunism (Williamson, 1993) when a ®rm collaborates with

competitors. In addition to this lower level of trust, the connection between trust and

cooperation is weaker in horizontal relations than in vertical ones.

The ®nding that alliance form moderates the relationship between organizational trust

and inter®rm cooperation suggests that while trust plays a facilitating role in enhancing

cooperation under conditions of low competitive intensity (i.e., vertical alliances), it has

little effect on cooperation under highly competitive conditions (i.e., horizontal alliances).

Thus, even if alliance participants place a great deal of trust in their fellow collaborators,

this trust only enhances cooperation when ®rms are collaborating with channel members.

This suggests that in place of organizational trust, collaborators in horizontal relations rely

on institutional or interpersonal supports to engender cooperation with competitors. Thus,

the effect of organizational trust on inter®rm cooperation appears to be dependent upon the

type of alliance a ®rm is participating in.

By highlighting the conditions under which trust is enhanced, this work extends a

growing body of related research that is beginning to question the role of trust in

interorganizational cooperation (e.g., Doney and Cannon, 1997; Ganesan and Hess, 1997;

Grayson and Ambler, 1999). For example, Ganesan and Hess (1997) ®nd that interorgan-

izational commitment in buyer-supplier relations is enhanced by acts of benevolence rather

than displays of credibility. Given that acts of benevolence are likely to be quite rare in

horizontal forms of interorganizational relations, my results are congruent with Ganesan

and Hess' ®ndings and extend their work by highlighting the important role of organiza-

tional form as a moderator of the relationship between trust and cooperation.

A recent study of cooperative behavior in the animal kingdom provides a parallel to

cooperation in horizontal alliances. In this study, Packer and Pusey (1997) ®nd that

although lions appear to be highly social creatures, they cooperate with rival lions only

when it serves their self interest and are quick to change alliances when the opportunity

presents itself. As Packer and Pusey observe, among lions, `̀ unrelated companions were as

ORGANIZATIONAL TRUST AND INTERFIRM COOPERATION 91

cooperative as brothers'' (p. 55). In sum, trust appears to play little role in fostering

cooperation among the king of beasts. Like these predatory lions, cooperative behavior

may have little to do with trust among industrial rivals engaged in joint R&D activity.

Much like their animal counterparts, these ®rms may be engaged in a temporary alliance

weakly united by the fear of a common threat rather than the strong ties of relational

norms. According to Williamson (1993), these horizontally-related ®rms are more likely to

display `calculativeness' rather than engender real trust. If this ®nding is substantiated by

future research among other domains, types of alliances, and forms of cooperation, it

suggests that researchers may need to reconsider the popular notion that trust is an

essential component of all types of relational exchanges (cf. Morgan and Hunt, 1994).

6. Appendix

Multi-Item Measures and Item-to-Total Correlations

Perceived Cooperation: (New Measure) 7-point Likert scale, Anchors: Strongly

DisagreeÐStrongly Agree.

Please rate the degree to which the following items accurately describe the nature of

your ®rm's overall relationship with the other organizations participating in this coopera-

tive research venture.

1. Our collaborators usually act in favor of the interests of the cooperative research

venture (r � :53)

2. Our relationship with our collaborators can be de®ned as `mutually gratifying'

(r � :76)

3. We expect that we will be working with our collaborators far into the future (r � :64)

Outcome Satisfaction: (Adapted from Olson, Walker, and Ruekert, 1995) 7-point Likert

scale, Anchors: Not at all Satis®edÐExtremely Satis®ed.

Thinking about the new products which have been developed or are being developed

from this relationship, how satis®ed are you with the following aspects.

1. The quality of the new products compared to other products developed by your ®rm

(r � :81)

2. The quality of the new products compared to products developed by competitors

(r � :81)

3. The product design (r � :78)

4. The time it will take to reach the break-even point after product introduction (r � :84)

5. The degree to which sales objectives will be reached (r � :81)

6. The degree to which pro®t objectives will be reached (r � :81)

Organizational Trust: (Adapted from Moorman, Deshpande, and Zaltman, 1992) 7-point

Likert scale, Anchors: Strongly DisagreeÐStrongly Agree.

92 RINDFLEISCH

Please rate the degree to which the following items accurately describe your ®rm's

aggregate level of trust in all of the other organizations participating in this cooperative

research venture.

1. We are willing to make our collaborators make important decisions without our

involvement (r � :53)

2. If we are unable to monitor our collaborators' research activities, we trust that they are

ful®lling their obligations (r � :75)

3. We trust our collaborators to do things we can't do ourselves (r � :77)

4. We trust our collaborators to carry out important project-related activities (r � :80)

5. We generally trust our collaborators (r � :78)

Stage of Development: (New Measure) 7-point Likert scale, Anchors: Strongly

DisagreeÐStrongly Agree.

Please circle the degree to which each of the following items provides an accurate

description of your ®rm's level of product development at the time of venture formation.

1. The projects were going through a substantial number of design changes (r � :33)

2. The projects were experimental in nature (r � :58)

3. The projects were highly unique (r � :72)

4. The projects were in an early stage of development (r � :62)

5. The projects were derived from state-of-the-art technologies (r � :51)

Acknowledgements

The research for this article was funded through the 1996 Business Marketing Doctoral

Support Award Competition sponsored by the Institute for the Study of Business Markets

at Pennsylvania State University. The author thanks Christine Moorman, Peter Dickson,

and Jan Heide for their thoughtful insights throughout this research project and Dan

Freeman, Shankar Ganesan, and Susan Heckler for their helpful comments on previous

drafts of this article.

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