Cognitive and behavioural determinants of trust in small and medium-sized enterprises

Purpose - The purpose of this paper is to provide a systematic examination of the importance of trust-developing constructs and the impact of trust on long-term orientation within the small and medium-sized enterprises (SME) domain. Design/methodology/approach - A theoretically grounded model has been developed that comprises three cognitive (reputation, skill and transaction specific investments) and three behavioural (information exchange, coercive power and flexibility) antecedents of trust, which in turn is posted to be a determinant of long-term orientation. The model has been tested using 229 responses obtained through a postal survey carried out in the UK electrical and electronic industry. Findings - With the exception of the skill to trust, all other hypothesised relationships have been supported. In relative terms, reputation followed by flexibility have been found to be the most important determinants of trust. Research limitations/implications - The moderating impact of company size and length of relationships have not been examined. The potential for differential behaviour of upstream and downstream business relationships also merits examination. Practical implications - The results indicate that development of trust can best be affected by a balanced and coordinated set of activities designed to enhance both cognitive and behavioural aspects of trust. Advice as to how this can be achieved is offered. Originality/value - Despite the extensive study of trust between large organisations there is a general lack of corresponding research with the SME domain. The results reported here provide support for the claim that related findings based on large organisations can be extended to apply to SMEs.