Trust, Social Networks and Enterprise Development: Exploring Evidence from East and West Germany

This paper examines the role of social networks in enterprise development by comparing personal trust (as inherent in social relationships) to collective and institutional trust (derived from the wider cultural, political and legal environment). The findings indicate that there is a shift from personal towards institutional trust as the firm develops and grows, but they also confirm enterprise behaviour being based on a mixture of different trust forms. Moreover, the findings underline the difficulty of studying trust empirically, recommending longitudinal qualitative approaches for further research.

[1]  Johannison Bengt,et al.  The institutional embeddedness of local inter-firm networks: a leverage for business creation , 2002 .

[2]  Allan Gibb,et al.  STRATEGIC AWARENESS, PERSONAL COMMITMENT AND THE PROCESS OF PLANNING IN THE SMALL BUSINESS , 1985 .

[3]  Martin Raiser,et al.  Trust in transition , 1999 .

[4]  Michael Thomas,et al.  Vertrauen – Kooperation – Netzwerkbildung: unternehmerische Handlungsressourcen in prekären regionalen Kontexten , 2002 .

[5]  Elizabeth Chell,et al.  Networking, entrepreneurship and microbusiness behaviour , 2000 .

[6]  Entrepreneurial Strategies in New Organizational Populations , 1996 .

[7]  J. Jenssen,et al.  Social Networks, Resources and Entrepreneurship , 2001 .

[8]  Bart Nooteboom,et al.  Trust: Forms, Foundations, Functions, Failures and Figures , 2003 .

[9]  C. Lane.  The Social Regulation of Inter-firm Relations in Britain and Germany: Market Rules, Legal Norms and Technical Standards , 1997 .

[10]  R. Bachmann.  Trust, Power and Control in Trans-Organizational Relations , 2001 .

[11]  D. North.  Institutions, Institutional Change and Economic Performance: Economic performance , 1990 .

[12]  N. L. Chervany,et al.  Initial Trust Formation in New Organizational Relationships , 1998 .

[13]  Mark S. Granovetter.  Economic Action and Social Structure: The Problem of Embeddedness , 1985, American Journal of Sociology.

[14]  A. Schwarz.  Diverging patterns of informalization between endogenous and exogenous economic actors in the East-German transformation process: results from a case-study in the IT-branch in Berlin-Brandenburg , 2000 .

[15]  J. Brüderl,et al.  Network Support and the Success of Newly Founded Business , 1998 .

[16]  Heiko Bergmann,et al.  Global Entrepreneurship Monitor (GEM). Länderbericht Deutschland 2003 , 2004 .

[17]  J. Coleman.  Foundations of Social Theory , 1990 .

[18]  Friederike Welter,et al.  Entrepreneurship and enterprise strategies in transition economies : an institutional perspective , 2001 .

[19]  P. Sztompka.  Trust: A Sociological Theory , 2000 .

[20]  Arent Greve,et al.  Networks and entrepreneurship -- an analysis of social relations, occupational background, and use of contacts during the establishment process , 1995 .

[21]  R. Yin.  Case Study Research: Design and Methods , 1984 .

[22]  L. Zucker.  Production of trust: Institutional sources of economic structure, 1840–1920. , 1986 .

[23]  M. Dowling,et al.  Firm networks: external relationships as sources for the growth and competitiveness of entrepreneurial firms , 2003 .

[24]  G. S. Hansen,et al.  Network evolution, entrepreneurial success, and regional development , 1991 .

[25]  Diego Gambetta.  Can We Trust Trust , 2000 .