Reputation & Trust

Trust and reputation play a major role in the development and ultimate success of relational contracts. This section collects some of the resources which deal with this wide-ranging field of study.

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Corporate Governance: Improvement and Trust in Local Public Services (PDF)
Audit Commission, 2003

This report seeks to investigate the relationship between the quality of corporate governance arrangements in public sector organisations and the quality of the services that they provide. The study illustrates some of the main strengths in existing arrangments and identifies some areas that are in need of attention.
ISBN 1 86240 462 3
UK

Trust In Construction: Achieving Cultural Change
Swan, Will; McDermott, Dr. Peter; Wood, Graham; Thomas, Andrew and Abbott, Carl, 2002
Centre for Construction Innovation in The North West

Based on interviews with employees on two projects used as case studies, the study looks at issues regarding trust in construction projects. Trust is seen in the reduction of risk and uncertainty via better communication and teaming. The building of trust improves project performance. Trust as part of an organisation's reputation is significant in giving employees an advantage in project teams and forging longer-term relationships with other organisations. In building trust, communication is vital. Trust is also fundamentally connected to money: reducing costs and leading to faster projects.

Rethinking Construction 2002: Achievements, Next Steps, Getting Involved (PDF)
Rethinking Construction, 2002
Office of the Deputy Prime Minister (ODPM)
This brochure reports the main advances made in the implementation of the recommendations of Sir John Egan's Rethinking Construction report. Furthermore, it calls for members of the industry to get involved in continuously improving the quality of the sector.

UK

More Order with Less Law: On Contract Enforcement, Trust, and Crowding (PDF)
Bohnet, Iris; Frey, Bruno, S; Huck, Steffen, 2001
Institute for Empirical Research in Economics, University of Zurich, Working Paper No.52
Trust can increase efficiency in the economic and political spheres. Recent studies using aggregate data suggest the existence of an efficiency-enhancing feature of trust for countries and organizations. The report attempts to provide a microfoundation for some of these findings by investigating whether trust-worthiness can have an economic payoff at the individual level.

USA

Rethinking Construction (PDF)
The Report of the Construction Taskforce (Egan Report), 1998
Office of the Deputy Prime Minister (ODPM)
This taskforce report seeks to improve the overall performance of the construction sector in UK. The project identifies the main challenges and makes a series of recommendations for the industry; primarily it makes a call for the industry to generate an integrated project process around the four key elements of product development, project implementation, partnering the supply chain and production of components.

UK

Contract Law, Trust Relations, and Incentives for Co-operation: A Comparative Study
Deakin, Simon; Lane, Christel; Wilkinson, Frank, 1997
Deakin, Simon; Michie, Jonathan (eds), Contracts, Co-operation and Competition: Studies in Economics, Management and Law. Oxford University Press, pp.105-139
The article compares inter-firm cooperation in Germany, Italy and Britain. For the authors, the evidence extracted from such a comparison calls for a reassessment of the role of contract law in shaping contractual co-operation.

UK

Co-operation and Trust in Inter-Firm Relations: Beyond Competition Policy?
Deakin, Simon; Goodwin, Tom & Hughes, Alan, 1997
Deakin, Simon and Michie, Jonathan (eds), Contracts, Co-operation and Competition: Studies in Economics, Management and Law. Oxford University Press, pp.339-369
This study suggests that competition policy can enhance co-operation and competitiveness. The authors suggest that, while maintaining careful considerations for constraining and controlling the abuse of economic power, competition policy should more clearly recognize that co-operation between firms is an important mechanisms to improve overall efficiency.

UK

Trust for Hire: Voluntary Remedies for Quality and Safety
Klein, Daniel B., 1997
Klein, Daniel B. (ed), Reputation: Studies in the Voluntary Elicitation of Good Conduct, Ann Arbor: University of Michigan Press, pp.97-133
Among other things, a discussion of the role of reputation and brand names in building trust

USA

The Role of Market Forces in Assuring Contractual Performance (PDF)
Klein, Benjamin and Leffler, Keith B., 1997
Journal of Political Economy, Vol. 89, No. 41, pp.615-641
A study which analyses the role of increased price as a way in which transactors can use the market mechanism to guarantee adequate contract enforcement. The study analyses some motivations behind good contract performance and compares some proposed measures on contract designs aimed at guaranteeing the quality of the services supplied.

USA

Private Sector Business Contracts: The Text Between the Lines
Lyons, Bruce and Mehta, Judith , 1997
Deakin, Simon and Michie, Jonathan (eds); Contracts, Co-operation and Competition: Studies in Economics, Management and Law; Oxford University Press, pp.43-66
This paper explains why contractual arrangements are greatly determined by the "text between the lines", the key dimensions of the transaction. The authors state that when transactions are recurrent, require investment to be made in specific assets, and are accompanied by high level of uncertainty, informal relational contractual arrangements provide a viable option.

UK

Trust-Based Relationships in Local Government Contracting
Davis, Howard and Walker, Bruce , 1997
Public Money & Management, pp.47-54
A theoretical article on the nature of trust under a CCT environment. The authors conclude that full relational contracting is not a feature of CCT legislation and argue that it might even be an undesirable characteristic due to government policy objectives. However, they state that for contracts to effectively become an efficient way of managing public services more extensive trust based relationships must be fostered.

UK

Detrimental Effects of Reward: Reality or Myth? (PDF)
Eisenberger, Robert; Cameron, Judy, 1996
American Psychologist. Vol. 51, No. 11, 1153-1166
An empirical study based on evidence of the decremental effects of reward on intrinsic task interest and creativity. Among some of its main findings, the data analysed suggest that detrimental effects of reward occur under highly restricted, easily avoidable conditions.

USA

Production of Trust: Institutional Sources of Economic Structure, 1840-1920
Zucker, Lynne G., 1986
Research in Organizational Behavior, 8, pp.53-111
An analysis of three different modes of trust production: process-based, character-based and institutional-based

USA

Goodwill and the Spirit of Market Capitalism
Dore, Ronald, 1983
British Journal of Sociology 34: 459-482.
A theoretical article that addresses the question of whether or not relational contracting is ultimately efficient. Taking examples from Japan, the author illustrates both the good and bad effects of relational contracting and concludes that an assessment of its overall impact on efficiency is not a straightforward task.

UK

Serco Institute Resource Centre

Reputation & Trust