Trust and Governance: Understanding the Dimensions and Institutional Foundations

To understand the role of trust in governance, we unpack the dimensions of trust and analyze both the normative and cultural- cognitive institutions that provide the foundation for these dimensions of trust. We consider a partner’s trustworthiness in terms of competence, benevolence, and integrity trust as the dimensions of trust. These dimensions are qualities of the partner, dyad, and industrial field, respectively, and thus are differentially impacted by their supporting institutions. Our analysis teases out the different aspects of trust and thus provides a more nuanced understanding of the role of trust as a mechanism in the firm’s governance portfolio.