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Trust Development in Entrepreneurial Relationships in an African Context

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Book cover Trust, Institutions and Managing Entrepreneurial Relationships in Africa

Part of the book series: Palgrave Studies of Entrepreneurship in Africa ((PSEA))

Abstract

Currently there is limited understanding about how institutions influence interorganisational trust development. In this chapter the author aims to bridge this gap by using the literature and empirical data to present a framework that explains trust development in entrepreneurial relationships in an African context where there are weak state and market institutions. The framework explains how the trusting behaviour of the entrepreneur depends on expectations of the entrepreneur and the trustworthiness of partners. This chapter shows further that entrepreneurs use logics of the weak formal institutions and indigenous institutions such as trade associations to develop parallel institutional trust in order to do business in local and distant markets where there may be limited personal knowledge of exchange partners. It contributes to the literature by showing how in contexts where state and market institutions are weak, entrepreneurs owning and managing small and medium-sized enterprises (SMEs) assess the actions and behaviour of key boundary spanners and draw on indigenous cultural institutions to develop personal trust and parallel institutional in order to do business. This has implications for theory, practice and policy.

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  1. Liverpool Business School, Liverpool John Moores University, Liverpool, UK

    Isaac Oduro Amoako

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Amoako, I.O. (2019). Trust Development in Entrepreneurial Relationships in an African Context. In: Trust, Institutions and Managing Entrepreneurial Relationships in Africa. Palgrave Studies of Entrepreneurship in Africa. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98395-0_6

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