8 - Trust development in German–Ukrainian business relationships: dealing with cultural differences in an uncertain institutional context

Summary

Summary

This chapter examines cultural differences and institutional uncertainty as important factors in the development of trust as a basis for successful international business relationships. The authors focus their investigation on the potential that actors have in becoming aware, and creatively responding to, institutional contexts, cultural differences and the challenge of trust development. Empirically, the authors look at German–Ukrainian business relationships and draw on a qualitative analysis of twenty-one field interviews and personal observations from the time of the so-called ‘Orange Revolution’. They conclude that generally the trust dilemma in international business relationships can be overcome through reflexivity and creativity, and they give many practical examples of what this means.

Introduction

The typical dilemma faced in international business relationships is that trust is particularly important and, at the same time, particularly difficult to achieve when the partners come from different cultures (Kühlmann, 2005; Zaheer and Zaheer, 2006). The positive expectations and willingness to be vulnerable associated with trust (Rousseau et al., 1998) are required even more, but are harder to produce, in business relationships where different cultural backgrounds increase the unfamiliarity and uncertainty between the partners. Successful cross-cultural business relationships may be jeopardized because the process of familiarization that they need to go through to build trust already requires some basic familiarity and trust to ‘shift the boundaries of familiarity from within’ (Möllering, 2006: 96, emphasis in original; see also Luhmann, 1988), which is more easily said than done.