Title: Coevolution of trust dynamics and formal contracting in governing inter-organisation exchange

Authors: Chien Yun Wang; Cheng-Min Chuang

Addresses: Department of International Business, National Taiwan University, No. 1, Sec. 4, Roosevelt Rd., Da'an Dist., Taipei City 106, Taiwan ' Department of International Business, National Taiwan University, No. 1, Sec. 4, Roosevelt Rd., Da'an Dist., Taipei City 106, Taiwan

Abstract: Recently, interest in the correlation between 'contract' in transaction governance and 'trust' in relational governance mechanisms has been growing. This study focuses on issues related to the evolution of contract and inter-organisational trust dynamics in transaction governance and uses mixed research method to investigate sectors related to transaction governance in Taiwan's electronics industry. The study finds higher flexibility in contract implementation to be a promoter of trust between two parties in a relationship, thereby promoting project execution efficiency in the case of Taiwanese firms. Organisational management differs between the East and West; therefore, Western firms should understand how various contractual provisions can be used to accommodate different transactions when cooperating with Taiwanese electronics companies.

Keywords: formal governance; relational governance; trust; contract; cooperative transaction; electronics; contract complexity; joint sense-making; satisfaction; customer relationship.

DOI: 10.1504/IJSHC.2024.136709

International Journal of Social and Humanistic Computing, 2024 Vol.4 No.2, pp.151 - 175

Received: 28 Nov 2022
Accepted: 14 Feb 2023
Published online: 19 Feb 2024 *

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