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Trustworthiness as a Source of Competitive Advantage
Author(s) -
Barney Jay B.,
Hansen Mark H.
Publication year - 1994
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250150912
Subject(s) - competitor analysis , competitive advantage , trustworthiness , business , corporate governance , industrial organization , work (physics) , marketing , knowledge management , computer science , internet privacy , mechanical engineering , finance , engineering
Three types of trust in economic exchanges are identified: weak form trust, semi‐strong form trust, and strong form trust. It is shown that weak form trust can only be a source of competitive advantage when competitors invest in unnecessary and expensive governance mechanisms. Semi‐strong form trust can be a source of competitive advantage when competitors have differential exchange governance skills and abilities, and when these skills and abilities are costly to imitate. The conditions under which strong form trust can be a source of competitive advantage are also identified. Implications of this analysis for theoretical and empirical work in strategic management are discussed.