Sub-theme 8:
Trust and law

Convenors:

Call for papers

The relationship between trust and law is a fascinating and important one, in a theoretical and an empirical view as well as in a policy oriented perspective. Macauly (1963) and Beale and Dugdale (1975) were among the first contributors to this topic, both arguing that trust has little to do with legal arrangements or that the establishment of trust might in fact be jeopardized if contractors refer too much to law in their relationships. Meanwhile, the organizational literature on trust has suggested a more complex picture where law can - but need not necessarily - reduce the chances to develop trust in business relationships. In a comparative empirical project conducted at Cambridge in the 1990s, it could be shown that it largely depends on the characteristics of the specific business systems whether trust is detrimental or indeed conducive to building trust among cooperating organizations (e.g. Arrighetti, Bachmann and Deakin 1997). In more recent years, scholars with different backgrounds have added to this debate (e.g. Luo 2002; Poppo and Zenger 2002, Ring, 2002, Liu and Ngo 2004 and Klein Woolthuis, Hillebrand and Nooteboom 2005).

Their findings and those of other scholars suggest that reliance on trust and in the law provide complementary and supplementary ways to deal with questions such as a) whether law can replace trust as a coordination mechanism in organizational relations, or vice versa; b) whether trust can co-exist or even flourish on the basis of detailed legal arrangements; c) what different forms of trust and law may have specific interrelations with inter-personal trust development between organizations; d) what role the law plays in institutional support for economic actors seeking to rely on inter-personal trust in their dealings; e) whether different institutionally-based legal systems (e.g., common-law, civil law, Islamic law, etc) lead economic actors to rely in different ways on inter-personal trust, on contracts, on memoranda of understanding, or whether they take different approaches to negotiating economic exchanges; or, f) whether a social contract is a necessary antecedent to social capital and how social capital or social contracts affect the willingness of parties to rely on inter-personal trust and/or legally enforceable contracts in their economic exchanges.

This sub-theme proposal is an effort to identify key notions to the debate on the relationship between trust and law, and to examine the central theoretical findings that scholars have provided in the past decades as well as to reconsider and to encourage further research on this issue in a wide range of empirical contexts. Conceptual, empirical and policy-oriented contributions to this important field of research are welcome. Among other questions, contributions to this sub-theme could specifically focus on the following ones:

• Can trust flourish in developing and emerging economies if there is no reliable legal framework?

• How can trust be developed in inter-cultural relationships if there is no common legal framework?

• Does the specific relationship between trust and law have any bearing on organizational and/economic performance?

• How do trust and legal arrangements interact over time in the development of collaborative relationships?

• How can legal policies, for example in the EU, be supportive to developing trust in business relationships?

About the convenors

Reinhard Bachmann is Associate Professor (Reader) of Management at the University of London, Birkbeck College. He has widely published in journals such as Organization Studies, British Journal of Sociology, Cambridge Journal of Economics, and others. With Christel Lane, he edited Trust Within and Between Organizations (Oxford University Press, 1998/2000). In 2001, he edited a Special Issue of Organization Studies on "Trust and Control in Organizational Relations" (with David Knights and Jörg Sydow). With Akbar Zaheer, he is the editor of "The Handbook of Trust Research" (Edward Elgar, 2006). His research focuses on the role of trust and other social coordination mechanisms in inter-organizational relationships.

Bart Nooteboom is Professor of Innovation Policy at Tilburg University, the Netherlands. He is a member of the Royal Netherlands Academy of Arts and Sciences. He is author of several books, including Inter-firm Collaboration, Learning and Networks: An Integrated Approach (2004), Trust: Forms, Foundations, Functions, Failures and Figures (2002), Learning and Innovation in Organizations and Economies (2000), Inter-firm Alliances: Analysis and Design (1999), and some 250 articles on a variety of subjects, including trust. With Frederique Six he edited The Trust Process in Organizations (Edward Elgar, 2003). He was awarded the Kapp prize for his work on organizational learning and the Gunnar Myrdal prize for his work on trust.

Peter Smith Ring is Professor of Strategic Management at the College of Business Administration, Loyola Marymount University, Los Angeles, CA. He is also an AIM International Visiting Fellow. One of his research streams focuses on collaboration, inter-personal and institutional trust and contracts. He has been widely published in journals such as the Academy of Management Review, Strategic Management Journal, Journal of Management Studies, California Management Review, and in a number of research monographs. With Chris Huxham, Steve Cropper and Mark Ebers he is currently editing "The Oxford Handbook on Organizational Relationships" (Oxford University Press, 2006).