Trust in Different Types of Organizational Relationships : A Social Capital Perspective

Abstract: The purpose of this thesis is to expand the understanding about the concepts of trust and social capital, and to explore their role in achieving desired organizational outcomes. The research followed a multiple case study approach, focusing on Iranian service providers. The reason for this focus is the insufficient scholarly contribution about social capital in developing countries. Moreover, considering the significant role of trust in social capital generation according to many scholars, this study seeks to understand how the issue of lack of trust in developing countries can influence social capital generation in these nations. In order to address the criticisms in the literature, this research first attempts to study the concepts of trust and social capital in different types of organizational relationships separately. There are, therefore, different levels of analysis in this study. The three types of organizational relationships which are the focus of this research are intra-organizational, organization-customer and business cluster.An intensive literature review was carried out on trust and social capital to build an overall theoretical picture of the problem at hand. The next step was to analyse the findings of this study by engaging both empirical and theoretical findings simultaneously. This was carried out with the aim of achieving answers to the research questions through theory matching and elaboration.The result of this study, in general, supports both the positive role of trust and social capital in achieving desired organizational outcomes. The empirical data and literature, therefore, seem to be in line with one another to a large extent. However, in several cases of this study the issue of lack of trust at the Iranian companies did in fact hinder the achievement of their desired outcomes. Moreover, the findings from the organization-customer and business cluster relationships showed that several of these Iranian companies are indeed already benefiting from social capital. However, they mostly benefit from the type of social capital arising from information flows. What they are missing, and are in fact in great need of, is the type of social capital associated with the benefits of trust. In other words, they were unsuccessful in bringing forward the benefits of the relational dimension of social capital. The study has also contributed towards refining the literature by showing that there are differences in the connotation of both “trust” and “social capital” when they are studied under different types of organizational relationships. Simply using these terms without specifying the type of relationship, or level of analysis, does not bring forward a clear understanding. Furthermore, the findings had pointed out the important difference between a contributing factor to a phenomenon and the phenomenon itself, which in this case were trust and social capital, respectively.Last but not least, the results of the cross-case analysis identified certain patterns and differences in the role of trust and social capital in different relationship types. These findings were summarized in the form of  a proposed model and a matrix. The proposed model started with the development of trust in organizational interpersonal relationships, and ended with the creation of two different types of social capital that can benefit both the organization and its customers. The matrix, on the other hand, emphasizes the importance of keeping a balance between different types of social capital, depending on the organizational requirement, in order to achieve the best desired outcomes.