Modes of trust production in project-based industries

Paper in proceeding, 2007

Appropriate levels of trust may have important benefits for interorganizational cooperation. In the construction industry, concerns are often raised that higher levels of trust would improve performance. In this paper, we review literature on trust to identify key modes of trust production in this project-based industry. Trust is a complex and multidimensional construct, involving conscious calculation as well as emotions and intuition. Processes on the individual, organizational and societal levels interact in shaping trust. Further, since trust is strongly related to interaction between individuals, organizational processes primarily serving purposes of communication and coordination also influence trust. In construction, the temporary and unique project organizations entail high needs for information processing. Extensive industry-level standardization of roles and procurement routes has been developed, while the amount of face-to-face mutual adjustment is kept down. We conclude that trust production in construction is characterized by a strong emphasis on institutional trust (thin trust), while relational trust (thick trust) is neglected. In this weak trust context contracts influence trust negatively, since changes tend to produce tensions. To improve collaboration, more resources need to be spent on project-level communication. Also, industry level standardization should be better adapted to goals of flexibility and joint explorative learning.