Culture-contingent signs of trust in emergent relationships

Organizational Behavior and Human Decision Processes 104 (2007) 61–82 www.elsevier.com/locate/obhdp

Culture-contingent signs of trust in emergent relationships Oana Branzei b

a,*

, Ilan Vertinsky

b,1

, Ronald D. Camp II

c

a York University, Schulich School of Business, 4700 Keele Street, Toronto, Ont., Canada M3J 1P3 University of British Columbia, Sauder School of Business, 2053 Main Mall, Vancouver, BC, Canada V6T 1Z2 c University of Regina, Faculty of Administration, Education Building, Regina, Sask., Canada S4S 0A2

Received 12 July 2003 Available online 26 June 2007 Accepted By David Harrison

Abstract This study develops a culture-contingent model of trust formation in emergent relationships by comparing how trust-warranting signs shape attributions of trustworthiness to unfamiliar trustees in collectivist versus individualist cultures. We predict and find that the effectiveness of dispositional and contextual signs varies systematically depending on trustors’ national culture. Collectivists tend to rely less on dispositional signs and more on situational signs than individualists. This difference fosters distinct trust-building pathways. Individualists bestow trust based on a trustee’s perceived ability and integrity, collectivists’ trusting choices depend to a greater extent on predictable, benevolent interactions with a potential partner. These findings suggest that, in cross-cultural encounters, signs aligned with trustors’ cultural expectations hasten trust production. Mismatched signs are impotent, even offputting. Ó 2007 Elsevier Inc. All rights reserved. Keywords: Trust; Culture; Signs; Attribution

Trust in signs The trustor ‘‘seldom knows the trustee’s trust-relevant properties directly from observation. True, one may say, ‘I could see at once that he was an honest fellow.’ But it is in signs that one sees it [. . .] Sign reading is a fundamental part of deciding whether to trust.’’ (Bacharach & Gambetta, 2001, p. 155, original emphasis). Trust researchers have traditionally discussed two types of trust-warranting signs: dispositional and contextual. Dispositional signs reflect the individual attributes of the trustee, such as expertise and honesty; contextual signs qualify the nature, scope, and depth of partners’ interactions (Butler, 1991; Kramer, 1999; Masuda & *

Corresponding author. Fax: +1 416 736 5762. E-mail addresses: [email protected] (O. Branzei), ilan. [email protected] (I. Vertinsky), [email protected] (R.D. Camp II). 1 Fax: +1 604 822 6970. 0749-5978/$ - see front matter Ó 2007 Elsevier Inc. All rights reserved. doi:10.1016/j.obhdp.2006.11.002

Kitayama, 2004). Yet, national culture may systematically alter the weight a trustor places on dispositional versus contextual signs (Mo¨llering, 2006). This study contributes by explaining why an actor’s dispositions are less effective signs of trustworthiness for collectivist than individualist trustors, while the converse holds for contextual constraints. We also discuss how preference for one type of sign or the other triggers distinct paths to trust production. Prior studies suggest that individualists’ trusting choices are both highly personalized and decontextualized. Trust is bestowed on autonomous actors who have stable traits, talents, and preferences applicable across situations, and who rationally and deliberately form and dissolve relationships in order to maximize their individual goals (Kim, Triandis, Kaˆg˘itc¸ibasßi, Choi, & Yoon, 1994, p. 7). Maintaining interpersonal relationships is secondary (Markus & Kitayama, 1991) and thus individualists tend to pay less attention to relational cues (Sanchez-Burks, 2002). In contrast, collectivists’

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trusting choices are depersonalized and contextualized—trust is predicated on awareness of shared group membership and on the particular roles a trustee occupies in relation to in-group members (Fukuyama, 1995; Kramer, 1999; Yamagishi & Kiyonari, 2000; Yuki, 2003). For collectivists, social context figures prominently in perception and causal reasoning (Morris & Peng, 1994). Trustees are expected to take on those roles, identities, duties, and obligations that are appropriate for specific situations (Oyserman, Sakamoto, & Laufer, 1998; Shinada, Yamagishi, & Ohmura, 2004). Within cultures, trust grows quickly. This is partly because trustees can better anticipate the preferences of same-culture trustors, and can thus signal more efficiently (Bacharach & Gambetta, 2001; Spence, 1974). The signs deliberately (or spontaneously) emitted by trustees are also more likely to be perceived and correctly interpreted by trustors who share similar cultural norms, values, and expectations (Doney, Cannon, & Mullen, 1998). When signs and attributional styles are aligned, initial trusting choices can be made more confidently and the ensuing trust is deeper and more durable (Johnson, Cullen, Sakano, & Takenouchi, 1996; Sheppard & Sherman, 1998). However, in cross-cultural encounters, ‘‘a lack of convergence in cultural proclivities may result in a virtual collapse of the trust-building mechanism’’ (Doney et al., 1998). The absence of credible signs or the presence of unexpected/undesirable ones can create cultural misunderstandings which impede trusting choices (Aulakh, Kotabe, & Sahay, 1996; Das & Teng, 1998). Once a trusting relationship has been forged, repeated interactions gradually align trustee signals with trustors’ expectations. Yet, very few researchers have considered the logically prior question: How does trust initially emerge among partners from different cultures? (Cannon, Doney, & Mullen, 1999; Chen, Chen, & Meindl, 1998). This study contributes by modeling and comparing the effects of culture-contingent signs of trust in emergent relationships. Our basic argument is that, when direct experience is lacking, dispositional signs of trust may be less accessible, less applicable (Higgins, 1996), thus less credible (Spence, 1974), for collectivists than for individualists, for two reasons. First, there are differences in trustors’ implicit theories of agency; that is, conceptions of what causes observed behavior (Morris, Menon, & Ames, 2001). In individualist cultures, individual acts are considered intentional and autonomous (Morris & Peng, 1994). In collectivist cultures, actors’ motives and actions are subsumed to contextual considerations such as time, role, and situation (Fiske, Kitayama, Markus, & Nisbett, 1998). Second, there are differences in dispositional attributions. Individualists tend to engage in spontaneous trait inferences and rely on these to explain and predict others’ behavior (Choi, Nisbett, & Norenzayan, 1999). They also tend to

over-assign causality to traits and under-assign it to situations. This is the so-called correspondence bias (Gilbert & Malone, 1995), which sometimes results in the fundamental attribution error (Ross & Nisbett, 1991). Individualists are also unlikely to correct this dispositional attribution bias even when contextual cues are salient (Choi & Nisbett, 1998). For collectivists, however, dispositions are situationally bound, provisional, and malleable (Choi et al., 1999). Collectivists are less likely to regard individual traits as stable indicators of future behavior and more likely to correct dispositional inferences when situational constraints are salient (Masuda & Kitayama, 2004). We also argue that contextual signs of trust are relatively more helpful in distinguishing between trustworthy and untrustworthy trustees (Spence, 1974) for collectivist than for individualist trustors. Collectivists tend to pay greater attention to the field in which (inter)actions occur (Fiske et al., 1998; Nisbett, Peng, Choi, & Norenzayan, 2001). When contextual cues are salient, collectivists are more likely to notice and attend to situational constraints (Choi & Nisbett, 1998; Morris & Peng, 1994; Oyserman, Coon, & Kemmelmeier, 2002); they are also more likely to make situational rather than dispositional attributions for others’ behavior (Choi et al., 1999). Collectivist trustors also have chronically accessible relational schemas (Baldwin, 1992; Kashima et al., 1995; Markus & Kitayama, 1991), and thus are more likely to apply relational principles to explain and predict others’ behavior (Cross, Morris, & Gore, 2002; Menon, Morris, Chiu, & Hong, 1999; Sanchez-Burks, Nisbett, & Ybarra, 2000). A formative conceptualization of trust Signs beget trust by fostering trustworthiness (Hardin, 1998; Mo¨llering, 2006). By trust we mean ‘‘the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other party will perform a particular action important to the trustor, irrespective of the ability to monitor and control the other party’’ (Mayer, Davis, & Schoorman, 1995, p. 712). We study how individual decision makers bestow trust on a previously unknown organization, based on their interactions with a responsible representative (Tinsley, 1996). Building trust in an organization is not equivalent to building interpersonal trust; however, organizational trust stems from perceptions and interactions with specific representatives (Currall & Judge, 1995; Zaheer, McEvily, & Perrone, 1998). If these individuals change, organizational trust has to be revised (Tinsley, 1996). We conceptualize trust as a formative construct (Edwards, 2001; Jarvis, MacKenzie, & Podsakoff, 2003): different ‘conditions’ (Butler, 1991) or suitable ‘proxies’ (Dirks & Ferrin, 2000; McKnight, Cummings, & Chervany, 1998) cause trusting intentions and behaviors (Currall & Judge, 1995; Mayer & Davis, 1999). Indi-

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cators of trustworthiness, that is the trustee’s ability, integrity, predictability and benevolence, ‘‘help build the foundation for the development of trust [. . .] Each contributes a unique perceptual perspective from which to consider the trustee, while the set provides a solid and parsimonious foundation for the empirical study of trust for another party’’ (Mayer et al., 1995, p. 717). In some cases, a meaningful degree of trust develops with lesser degrees of each factor; other times, one factor is particularly critical (Mayer et al., 1995, p. 722). The literature on trust-building processes indirectly supports this conceptualization by discussing distinct bases of trust which work independently and additively (Lewicki & Bunker, 1996; Zucker, 1986). A formative conceptualization is particularly meaningful and appropriate for describing cross-cultural trust, where trustworthiness means different things depending on how partners view their relationship (Sheppard & Sherman, 1998, p. 426–427). A formative conceptualization is also suitable for capturing trust in emergent relationships, where initial trusting beliefs are important and immediate causes of early trusting intentions (McKnight, Choudhury, & Kacmar, 2002, p. 475– 476).2

Which signs, when? At the very beginning of a collaboration, trust forms ‘‘quickly (before parties have meaningful information about each other)’’ (McKnight et al., 2002, p. 336), based on features of the partner, the relationship, or the context in which the relationship is embedded (Sheppard & Sherman, 1998, p. 426). Trust-warranting signs help trustors manage their anticipated dependence on the trustee; these signs include social categorization, roles, obligations, reputation, dispositions, intentions, and promises (Sheppard & Sherman, 1998). We explain which signs matter when by discussing some of the main reasons why collectivist and individualist trustors tend to perceive distinct types of dependence on potential partners, and why they address these dependencies in systematically different ways. Initial trust depends on the cognitive processes by which a trustor forms first impressions of the trustee and interprets contextual cues (McKnight et al., 1998). Differences between collectivist and individualist cul2

Empirical studies of trust in established relationships use a reflective conceptualization that views trust as a cause of specific components (Jarvis et al., 2003). Such a conceptualization requires that perceptions of trustworthiness are repeatedly and reliably updated through prior interactions. As a result, the trustee is viewed much more homogeneously (Mayer et al., 1995) and trusted partners are attributed consistently high levels of predictability, ability, integrity, and benevolence. However, this is an unlikely scenario in cross-cultural encounters.

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tures elicit distinct ‘grammars’ for producing trust, depending on the dominant relational forms (Sheppard & Sherman, 1998; Fiske, 1992). In Western individualist cultures, exchanges are often characterized as transactions between autonomous parties, mediated by price. Trustors typically perceive their relationship with the trustee as one of shallow dependence (Fiske et al., 1998, p. 951). East Asian collectivist cultures emphasize reciprocal relationships; trustors are more likely to perceive relationships as deeply interdependent and seek a richer emotional connection with a potential partner (Gelfand, Major, Raver, Nishii, & O’Brien, 2006). The different perceptions that trustors have of their (inter)dependence on a trustee entail different risks, thus motivating different ways of producing trust (Cook et al., 2005; Fiske, 1992; Sheppard & Sherman, 1998). Shallow dependence involves risks of unreliability (i.e., concerns that the trustee will not behave as expected) and risks of indiscretion (i.e., concerns that sensitive information will be withheld or mishandled). As dependence deepens, trustors also face risks of cheating. To mitigate these risks, trustors seek competent partners who keep their promises (Sheppard & Sherman, 1998, p. 427). Inferences concerning a trustee’s ability to accomplish specific tasks and honest intent to keep promises have been at the core of Western theorizing on trust since Deutsch (1960) initially defined trust as an individual’s confidence in the intentions and capabilities of a partner (Lewicki, McAllister, & Bies, 1998 for a review). This is perhaps not surprising since ability and integrity rely heavily on dispositional attributions concerning a trustee’s individual skills, talents, commitments, and intentions, and assume that individual attributes are stable across situations (Doney et al., 1998). These premises are prevalent in individualist cultures which tend to view the self as independent and value personal initiative and success. Yet, studies of trust formation in East Asian countries have repeatedly suggested that ability and integrity are weaker bases of trust in these settings (e.g., Aulakh et al., 1996; Child & Mo¨llering, 2003; Johnson et al., 1996). Collectivist trustors tend to view relationships as deeply interdependent (Fiske et al., 1998). Interdependence exposes trustors to risks of neglect, abuse, and harm to self-esteem, as well as risks of misanticipation—that without specific instructions, partners will not accommodate a trustor’s needs or actions (Sheppard & Sherman, 1998). To mitigate these risks, collectivist trustors avoid uncertainty (Cook et al., 2005). They seek predictable trustees and avoid unpredictable ones, and favor benevolent partners who show loyalty, empathy, and support (Cross & Madson, 1997; Morris & Gelfand, 2004). Our hypotheses, summarized in Fig. 1 and sequentially elaborated below, propose that, for collectivists, dispositional signs will be less likely to engender trust

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National Culture Collectivism/Individualism

Trust

Signs Dispositional Professional Designation Relational/Task Focus Voluntary Promises Ex-ante Congruence

H1-2

Ability

H3-4

Integrity Behavioral Intention

Contextual Dissimilarity Thwarted Connection Relational Reputation Token Control Efforts

H5-6

Predictability

H7-8

Benevolence

Control Variables Age, Gender General & Specific Disposition Allocentrism Perceived Risk Perceived Deterrence Fig. 1. A culture-contingent model of trust formation in emergent relationships.

via attributions of ability and integrity, and contextual signs more likely to do so via attributions of predictability and benevolence. We focus on a set of dispositional and contextual signs which (a) have repeatedly been found to be important in prior trust research and managerial practice; (b) can be expected to be available to decision makers across cultures before the parties decide to willingly engage in trusting behavior; and (c) are focused, that is, they target a specific aspect of trustworthiness, rather than convey an overall impression. Although the chosen set of signs is not an exhaustive sample of the multitude of trust-warranting signals that could potentially affect the decisions of a specific trustor in real-life interactions, it provides a starting point for understanding whether and how dispositional and situational signs differentially shape trust formation in cross-cultural encounters (Table 1).

of trustworthiness in individualist cultures. Independent self-construals suggest that trustees are defined by unique and stable traits, abilities, and rights (Markus & Kitayama, 1991). Trustees are expected to act consistently across situations because they must maintain a sense of autonomy from others and be true to their distinguishing attributes (Yuki, 2003). Trustee actions are also seen as intentional, and deeply rooted in internal beliefs, preferences, and interests (Menon et al., 1999; Morris et al., 2001). In individualist cultures, dispositional attribution biases are not only pervasive (Gilbert & Malone, 1995) but also resilient— ‘‘even when a sufficient contextual force is known to be present, perceivers still tend to attribute behavior to personality traits and other dispositions of the actor’’ (Morris & Gelfand, 2004, p. 52). Individualists’ trusting choices often hinge on signs of a trustee’s ability and integrity (Doney et al., 1998; Kramer, 1999), but dispositions are weaker triggers of trust for collectivists (Mo¨llering, 2006).

Dispositional signs Ability Dispositional attributions figure prominently in Western theories of trust formation (Deutsch, 1960; Dirks & Ferrin, 2000; Lewicki et al., 1998). Several implicit assumptions make dispositions credible signals

Ability (competence, expertise, capability) refers to a group of domain-specific skills, competencies, and characteristics which enable a trustee to reliably fulfill a

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Table 1 Dispositional and contextual signs of trust in emergent relationships Signs

Description

Ability

H1, Professional designation: the scenario included or excluded an explicit comment that the trustee’s representative held a relevant professional designation. The dummy variable used in the SEM analyses took a value of 1 when the trustor discovered, during the discussions, that the trustee attended the same university, and 0 otherwise. H2, Relational/task focus: the extent to which the trustee emphasized personalized social exchanges than task-related exchanges during the negotiating process. The scenario conditions specified either a predominantly social- or a predominantly task-orientation. (Social) During several formal meetings between the teams, Mr. Y has been very interested in discussing the norms and expectations of your two companies. X-Corp’s team has focused more on the relationships that will be involved in an alliance than on project or contract details. Mr. Y has also spent several hours socializing with you outside normal work hours, discussing, among other things, sports, arts, and families. (Task) In formal meetings and dinners you have had together, Mr. Y has been very interested in discussing project details. The dummy variable used in the SEM analyses took a value of 1 in the former case, 0 in the latter.

Integrity

H3, Voluntary promises: the trustee’s prior commitment to keeping voluntary promises made to third parties. The scenario conditions specified whether the trustee had breached or kept its promises in prior alliances. (Breach) X-Corp has insisted on changing the terms of contracts with partners when conditions surrounding those partnerships have changed. (Adherence) X-Corp has insisted on adhering to contracts with partners, even when conditions surrounding those partnerships have changed. The dummy variable used in the SEM analyses took a value of 1 in the former case, 0 in the latter. H4, Ex-ante congruence: the extent to which the trustee clearly, precisely, and completely specified its intentions for the alliance and made commitments to fulfill specific obligations to the trustors. The scenario conditions specified either high or low congruency. (High) Mr. Y has insisted that an explicit, detailed contract be established before entering into an alliance. The contract he has proposed explicitly lays out the purpose and nature of the joint venture, including key activities and roles for project members from each company, monitoring expectations, expected costs and benefits for each company, dispute resolution mechanisms, etc. This contract should be easily enforceable in court if the terms of the contract are violated. (Low) Mr. Y has insisted that any contract should be minimal, little more than a short written document that stipulates that the two firms intend to work together in a joint venture and that they will endeavor in good faith to maintain the relationship over time. This is not a detailed plan of action, but rather a set of broadly applicable general principles, goals, and objectives; criteria to be used in deciding what to do when unforeseen contingencies arise; and dispute resolution principles to be used when disagreements do occur. The dummy variable used in the SEM analyses took a value of 1 in the former case, 0 in the latter.

Predictability

H5, Dissimilarity: whether the trustee belonged to an (un)familiar institutional context, as reflected by the degree of modernity of the trustee’s home country. The scenario conditions specified either that the trustee was from a developing country with changing social norms and expectations (e.g., Chinese trustees, from Hong Kong) or that the trustee was from an industrialized country with a comparable degree of modernity (e.g., Canadian trustees for Japanese trustors, Japanese trustees for Canadian trustors). The dummy variable used in the SEM analyses took a value of 1 in the former case, 0 in the latter. H6, Thwarted connection: the manner in which the trustee handled initial disagreements. The scenario conditions specified either a confrontational or a relational approach. (Confrontational) Disagreements were voiced in public settings by various people from the X-Corp team. (Relational) Disagreements were voiced in public settings by the trustee’s assigned representative. The dummy variable used in the SEM analyses took a value of 1 in the former case, 0 in the latter.

Benevolence

H7, Relational Reputation: third-party accounts of the relationships between the trustee and its past alliance partners. (Questionable) You have heard that although past alliances were successful, some of X-Corp’s past alliance partners had difficulty managing their working relationships in alliances with X-Corp. (Favorable) You have heard that X-Corp’s past alliance partners were generally happy with their working relationships in their alliances with X-Corp. The dummy variable took a value of 1 in the former case, 0 in the latter. H8, Token control efforts: the duration of interactions preceding the decision. The scenario conditions specified either a long or a short interaction period. (Long) You have been involved in discussions with Mr. Y of X-Corp for eighteen months regarding the possibility of forming an alliance for this project. (Short) You have been involved in discussions with Mr. Y of X-Corp for six months regarding the possibility of forming an alliance for this project. The dummy variable used in the SEM analyses took a value of 1 in the former case, 0 in the latter.

specific set of tasks (Mayer & Davis, 1999; Mayer et al., 1995). We discuss two distinct signs of a trustee’s ability: professional designation and relational/task focus. Professional designations are an institutional guarantee of the quality of the trustee’s domain-specific abilities; they help mitigate risks of unreliability. Relational/task focus reflects enacted norms of information disclosure; it addresses risks of indiscretion (Sheppard & Sherman, 1998). These signs enable a trustor to make at least some inferences about a potential partner’s ability to fulfill its tasks within the alliance. But they do not speak directly to the trustee’s predictability in other aspects of the

interactions, such as their personal commitment to keeping promises or their benevolent intentions. Despite professional reliability and discretion, competent trustees may engage in unforeseeable acts, be dishonest, or disloyal. Professional designation Professions, training, institutions, and associations represent an important source of skills and internalized rules of conduct. Professional designations provide an institutional endorsement for a reliable level of trustee competence. A designation is an individual attribute

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that signals that the trustee possesses a desired level of capability. It is observable ex-ante and is stable across situations, thus, it facilitates a high level of trust in unfamiliar partners (McKnight et al., 1998). Trustors are more likely to rely on signs of a trustee’s competence in societies which encourage, respect, and reward individual qualifications, expertise, and accomplishment (Doney et al., 1998). Individualists attach greater value to individual initiative and accomplishments and have social norms for excelling and trying to be the best—they are more likely to rely on professional designations (Doney et al., 1998). Collectivists emphasize leveling—not trying to be better than others. Individual capabilities are considered less differentiating (Morris et al., 2001); they are impermanent and malleable (Choi et al., 1999) and dependent on the context in which they are applied. For example, collectivists often use a tree metaphor to describe individuals as roots that take on the color of the local soil (Choi et al., 1999, p. 58). H1. Professional designation will have a weaker positive effect on trust (via trustee ability) for trustors in collectivist cultures than for trustors in individualist cultures. Relational/task focus describes a trustee’s preferences, goals, and intentions. When trustees pay attention to the peculiarities of the task (e.g., goals, features of effective performance, and related strategies), the trustor is reassured that their partner is capable of meeting technical expectations (Doney et al., 1998; Sanchez-Burks, 2002). Task-focused trustees reliably concentrate on ‘‘the underlying interests regarding the material aspects of the negotiation’’ (Gelfand et al., 2006, p. 441); they devote little attention to building or maintaining relationships. Rather, they are primarily concerned about maximizing the economic value of the exchange. Individualist trustors tend to approach interactions arelationally (Gelfand et al., 2006), transactionally (Fiske, 1992; Sheppard & Sherman, 1998), and with implicit assumptions of individual agency (Menon et al., 1999). These trustors may respond negatively to a trustee who tries to engage socially; viewing this as interference with the main aim of creating economic value and as a sign that the trustee does not have the capabilities needed on the task front (Sanchez-Burks, 2002; Sanchez-Burks et al., 2000). However, collectivist trustors may welcome greater social rapport because it strengthens their perceived connection with the partner (Cross, Bacon, & Morris, 2000). H2. Relational/task focus will have a weaker negative effect on trust (via trustee ability) for trustors in collectivist cultures than for trustors in individualist cultures.

Integrity Integrity assessments stem from perceptions that ‘‘the trustee adheres to a set of principles that the trustor finds acceptable’’ (Mayer et al., 1995), fair, and consistent (Butler, 1991). Integrity requires both consistency—that the trustee’s actions reliably reflect its words and written promises, and congruence—that the trustee’s beliefs and intentions are clear, morally acceptable, compatible, and in keeping with the trustor’s expectations (Sitkin & Roth, 1993). We discuss two signs of trustee integrity: voluntary promises and ex-ante congruence. Keeping voluntary promises signals that the trustee has previously adhered to mutually perceived obligations towards third parties. Ex-ante congruence is the extent to which the trustee took steps to clearly, precisely, and completely specify its alliance intentions towards the trustor. Both signs help convey integrity, but they do not necessarily imply ability or benevolence. Trustees may stick to specific promises, even if they lack the expertise to successfully complete specific tasks or their actions expose the trustor to possibly harmful consequences. A trustee that repeatedly makes detailed promises and rigorously keeps them becomes more predictable over time, however, less precise initial promises need not signal unpredictability. Contractual agreements3 are an important vehicle for sharing voluntary promises and aligning alliance intentions during early stages of the relationship. Contracts exist in all alliance negotiations, although their form and weight varies across cultures. Contracts ‘‘lend special assurance to particular expectations and make them sanctionable [and thus] lessen the risk of conferring trust’’ (Luhmann, 1979, p. 34). Individualist cultures are largely characterized by perceived dependence and transactional views of exchange (Fiske, 1992). Under these conditions, highly specific voluntary agreements facilitate trust production by mitigating risks of unreliability, indiscretion, and cheating (McKnight et al., 1998; Sheppard & Sherman, 1998; Zucker, 1986). But the effect of promises, voluntary or detailed, is likely to be weaker for collectivist trustors. We examine each in turn.

3 A long tradition of management thought has conceptualized trust and contracts as opposing alternatives—contracts yield distrust by fostering conflict and encouraging opportunism (Lyons & Mehta, 1997; see Woolthuis, Hillebrand, & Nooteboom, 2005 for a review). Other researchers have argued that contractual agreements do not impede trust, rather they are an important antecedent of trust (McKnight et al., 1998; Zucker, 1986). Several recent studies suggest that contracts often fulfill a symbolic function in addition to their frequently discussed safeguarding role (Malhotra & Murnighan, 2002, p. 537). They signal one’s desire to commit to the partner and they facilitate goal-setting and information-sharing (Bachmann, 1998; Woolthuis et al., 2005).

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Voluntary promises Contractual agreements reflect voluntarily assumed and mutually acceptable obligations; once formed, trustors may view these obligations as psychological contracts, which are typically durable and resistant to change (Rousseau, 1995). Voluntarily assented obligations are an opportunity for a trustor to attribute the trustees’ willingness to cooperate to fair motives. In this way, making and keeping voluntary promises generates trust via dispositional attribution of integrity (Malhotra & Murnighan, 2002). Breaching these voluntary commitments generates suspicion, dissatisfaction, feelings of betrayal or violation, and may lead to the dissolution of relationships (Sheppard & Sherman, 1998). In early encounters, partners cannot directly experience a trustee’s consistency. However, a history spotted with broken promises may lead trustors to question a trustee’s integrity, thus hindering trust production. Collectivists may place less weight on a track record of broken promises, for several reasons. First, collectivist trustors believe that individual promises must respond to local demands, and that individual attributes are provisional, malleable, and conditional on specific situations (Choi et al., 1999). The dialectic tradition in the East assumes that ‘‘both A and non-A can be true, indeed that A implies the existence, or the immanent existence of a non-A’’ (Fiske et al., 1998, p. 934). Thus, a breach is not necessarily at odds with the trustee’s intent to keep their promise, and thus carries less negative connotations (Chiu, Hong, & Dweck, 1997; Choi et al., 1999; Morris & Peng, 1994). Recent findings confirm that collectivists view themselves more flexibly across situations (Suh, 2002); extreme consistency could be seen as a ‘‘lack of flexibility, rigidity, or even immaturity’’ (Markus & Kitayama, 1994, p. 576). Second, a specific promise has differential appeal across cultures. Individualist trustors typically prefer low-context communication, such as direct and concise promises (Gundykunst et al., 1996; Singelis & Brown, 1995). They are suspicious when direct promises are not forthcoming. On the other hand, collectivist trustors may suspend suspicion until they more fully contextualize the promises and understand the conditions under which they were made and their broader implications (Nisbett et al., 2001). Third, collectivists may understand the obligation itself differently. Their chronically accessible relational schemas make them particularly sensitive to factors that may prevent or damage connection. It might be acceptable, even desirable, for a trustee to break a promise if that breach occurred because the trustee wanted to show empathy or support for its partner or had come to better understand their interests (Cross & Madson, 1997). In cultures which emphasize relationships, consistently acting in accordance with personal goals and attributes

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may be seen as selfish, immature, or even disloyal (Fiske et al., 1998). H3. Breach of voluntary promises will have a weaker negative effect on trust (via trustee integrity) for trustors in collectivist cultures than for trustors in individualist cultures. Ex-ante congruence At the beginning of a relationship, contractual agreements help trustors form trusting intentions (McKnight et al., 1998; Zaheer et al., 1998) by encouraging information-sharing, openness, and psychological safety (Woolthuis et al., 2005) and by signaling that the trustee is willing to commit to mutually agreeable obligations (Bachmann, 1998). Voluntarily assumed contractual obligations can signal a trustee’s intrinsic motives for future action (Malhotra & Murnighan, 2002). The more clearly, specifically, and completely a trustee states its values, beliefs, and intentions for action and reaction, the more confident the trustor will be that the trustee shares similar goals and is sincerely committed to accomplishing them. Attributions of trustworthiness (via integrity) are thus likely to be stronger in individualist cultures, which view an actor’s promises as intentional and self-determined. The underlying assumptions are generally implicit in many individualist cultures—actions are freely chosen, choices imply a preference, preferences are stable over time, trustees are responsible for the choices they make and the outcomes that result; and smart, good people make wise choices which yield the desired outcomes (Fiske et al., 1998: 939). However, many of these assumptions are often unwarranted in collectivist settings (Doney et al., 1998). East-Asian cultures entertain a more fluid, holistic, porous, and connected sense of the person. A trustee’s actions are oriented towards meeting social roles and norms and contributing to collective needs; individuals must flexibly adapt to situational changes and unexpected demands (Fiske et al., 1998). Thus, prior actions cannot be reliably generalized to future situations. Exante congruence is likely to be a less reliable basis of trust for collectivists than for individualists, because intentions are hard to specify in the abstract and because collectivists expect that a trustee’s intentions will adapt to their partner’s changing needs. H4. Ex-ante congruence will have a weaker positive effect on trust (via trustee integrity) for trustors in collectivist cultures than for trustors in individualist cultures. Contextual signs Dispositional attributions of trustworthiness explain only part of the story. Trust also stems from situational

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attributions: from how trustors view their interactions with the trustee. People in all cultures ‘‘think primarily in relational terms much of the time—more than in terms of personal attributes’’ (Fiske et al., 1998, p. 925). However, social relationships are construed rather differently across cultures. Individualists tend to view relationships as voluntary and derivative: they make people ‘free’, provide them with choices, and create opportunities for independent success. Positive relationships, group solidarity, and functionality are likely to be considered secondary to individual needs and desires (Fiske et al., 1998). For collectivists, relational schemas are more likely to be chronically accessible (Gelfand et al., 2006; Morris & Gelfand, 2004), and to be considered relevant, appropriate, and applicable (Higgins, 1996; Higgins & Brendl, 1995). Collectivists develop intense emotional attachment to a few in-groups (Yamagishi & Kiyonari, 2000; Yosuke & Yamagishi, 2003). Their attention, cognition, and motivation tend to be structured around social norms and roles that promote intensely interdependent, harmonious social connections (Cross et al., 2002; Yuki, 2003). Collectivists are more likely than individualists to attend to signs that describe the nature, depth, and quality of the connection with a trustee, e.g. similarity, familiarity, connection, caring, and empathy. Attention to these contextual signs facilitates trust production by conveying predictability and benevolence to the trustee (Doney et al., 1998; Mo¨llering, 2006). Predictability Trust emerges via a prediction process when the trustor can confidently and accurately forecast that the trustee’s future behaviors will fall within a desirable range (Deutsch, 1960; Doney et al., 1998). Predictability helps reduce initial uncertainty by defining what is ‘normally’ expected of a trustee acting in good faith (Mayer & Davis, 1999; Zucker, 1986). In new relationships, predictability often depends on the degree to which the encounter is seen as normal, customary, comfortable (Lewis & Weigert, 1985), and thus auspicious of a successful interaction (McKnight et al., 1998). Situational normality stems from physical cues (e.g., the setting, de´cor and dress in a bank or hospital) and from enacting well-understood social norms. We focus on the latter. Social norms foster trust by describing untrustworthy behavior and stipulating a systematic duty to sanction it (Fiske, 1992). Strong norms increase the odds that socially unacceptable behaviors will be detected and punished (Shinada et al., 2004), making it relatively more costly to engage in deviant behaviors. In so doing, social norms mitigate the risks of abuse, neglect, or harm to self-esteem in interdependent relationship (Sheppard & Sherman, 1998).

Through social categorization, a trustor can generally infer whether a trustee is aware of, in compliance with, or in violation of social norms (Fiske et al., 1998; Yamagishi & Kiyonari, 2000). More specifically, the trustor can observe the trustee’s (in)ability to build, affirm, and maintain social connections (Gelfand et al., 2006). We discuss two types of signs which may inhibit the development of trust via predictability: dissimilarity and thwarted connection. Dissimilarity arises when the trustee is a member of a different social system (McKnight et al., 1998). Thwarted connection occurs when the trustee handles initial minor disagreements in a way that signals he/she is not relating with the trustor (Cross & Madson, 1997). These signs do not imply ability—a competent trustee may be socially inept, and therefore a relational liability. Nor do they signal integrity—a highly principled, true-to-their-word trustee can take an arelational or competitive stance (Gelfand et al., 2006). Neither do these signs indicate the trustee’s benevolence; that is, the extent to which it is empathetic, loyal, and well-intentioned. Indeed, a highly dissimilar trustee, or one initially unaware of relational norms, can be extremely concerned about the quality of the relationship and about meeting trustor’s needs. Dissimilarity At the beginning of a relationship, when direct knowledge is usually limited, shared membership of the same social category (e.g., team, organization, corporate group, institutional system, etc.) increases perceptions of trustworthiness (Yamagishi, Cook, & Watabe, 1998a, 1998b; Zucker, Darby, Brewer, & Peng, 1996). Individuals who are grouped together share similar expectations, norms, and values concerning their behavior within a given social setting (McKnight et al., 1998). Interdependent self-construals and chronically accessible relational schemas generally heighten responsiveness to social categories. The effect of perceived (dis)similarity on trust, via trustee predictability, is likely to be stronger for collectivists, for several reasons. First, social categorization changes subjective uncertainty. Behaviors can be predicted with more accuracy and greater confidence (McKnight et al., 1998) because members of a specific category are subject to clear and socially enforceable normative prescriptions (Hogg & Abrams, 1993; Shinada et al., 2004). Even when category boundaries are based on ad-hoc, arbitrary, minimal, and transient criteria, members are considered to be more predictable, and thus more trustworthy, than non-members (Brewer, 1996; Kramer, Brewer, & Hanna, 1996; Yamagishi & Kiyonari, 2000). Second, the penalties for violating the social norms of category memberships are tougher for collectivist trustors, who identify more closely with social groups (Markus & Kitayama, 1991), view group membership

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as permanent rather than temporary, and exhibit lower intergroup mobility (Buchan, Croson, & Dawes, 2002). For example, in East-Asian cultures, ostracism from a valued social group is often seen as a threat to individual identity (Shinada et al., 2004). Third, collectivist trustors tend to be more biased against outsiders (Heine & Lehman, 1997). Not only are collectivists more trusting of members, they are also significantly less trusting of strangers (Huff & Kelley, 2003). Collectivists report greater disjuncture between insiders and outsiders than individualists (Oyserman et al., 2002), and some collectivist cultures actively sensitize their members to ‘stranger danger’ (Yamagishi et al., 1998a, Yamagishi, Jin, & Miller, 1998b). Thus: H5. Dissimilarity will have a stronger negative effect on trust (via trustee predictability) for trustors in collectivist cultures than for trustors in individualist cultures.

Thwarted connection (Dis)similarity influences predictability-based trust by verifying the extent to which a trustee shares, understands, and is likely to comply with social norms about how partners ‘ought to’ relate to one another in order to enact, develop, and affirm rewarding relationships. Signs that threaten these social norms are likely to raise suspicion. We focus on benign threats; that is, relatively minor threats which may cause discomfort, anxiety, or distress, yet do not directly harm or reflect poorly on the trustor (Jetten, Summerville, Hornsey, & Mewse, 2005). We are interested in the manner in which a trustee handles the initial disagreements that are often present during early encounters. We expect that a more confrontational approach thwarts the expected connection and thus hinders trust formation, while a more relational approach conveys acceptance of social norms. Collectivist trustors are likely to be more attentive and more sensitive to thwarted connections (Cross et al., 2000), for several reasons. First, their chronic accessibility to relational schemas makes connections a primary focus of consciousness, and a source of positive feelings and self-esteem (Gelfand et al., 2006). As a result, collectivists are more likely to encode and use information concerning relationships to predict a trustee’s future behavior (Cross et al., 2002). Second, collectivists may disapprove of confrontation because they are highly attuned to their own relational obligations and generally reluctant to express negative emotions for fear of damaging the relationship (Cross & Madson, 1997). Third, collectivist trustors may be more motivated to defend their group’s social norms (Jetten, Spears, & Manstead, 1997) by shunning the offending stranger.

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Such derogation is stronger in collectivist cultures where the boundaries between the in-group and the out-group are more sharply drawn (Jetten et al., 2005; Yamagishi et al., 1998a, 1998b). H6. Thwarted connection will have a stronger negative effect on trust (via trustee predictability) for trustors in collectivist cultures than for trustors in individualist cultures. Benevolence Trust emerges via benevolence when the trustee signals cooperation, reciprocity, and loyalty; for example, by taking social roles that go beyond required or rewarded obligations (Doney et al., 1998; Mayer & Davis, 1999; Mayer et al., 1995). Assuming appropriate social roles, and fulfilling them effectively when communication is difficult or incomplete, fosters high levels of ‘thick’ or ‘robust’ trust (Kramer, 1999; McKnight et al., 1998). Such roles are particularly important in situations of deep interdependence, when there are many opportunities to misinterpret partner needs, and the consequences of inaccurately assuming another’s intentions can be very costly. Under these conditions, evidence that a trustee can correctly and fully anticipate a trustor’s needs, and is willing to accommodate them, fosters benevolence-based trust by mitigating risks of misanticipation (Sheppard & Sherman, 1998). When partners cannot rely on a common history of interactions, a trustee can communicate benevolence by maintaining a consistently good reputation in past relationships and by deliberately creating opportunities for the trustor to ‘test its mettle’ with token control efforts (McKnight et al., 1998). Neither approach conveys ability or integrity. Indeed, a trustee may lack certain competencies or may have to significantly revise prior promises in order to ‘do good’ to the trustor. Nor does benevolence imply predictability. Signs that a trustee seeks to recognize and anticipate the trustor’s needs do not necessarily help forecast how it will behave in future interactions. Relational reputation A trustor may extend trust to a potential partner, based on the prior experience that a third party has had with the trustee. Transferring trust from trusted sources to an unknown trustee is likely to be more prevalent in collectivist cultures, for two related reasons. First, collectivists can more easily identify trusted sources, and they have more confidence in the assessments that others make of the trustee (Doney et al., 1998). Collectivists’ relationships tend to be tighter, closer, and more intense (Fiske et al., 1998). Within this deeply interconnected web of relationships, parties

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have a duty to nurture and promote trustworthy bonds, as well as to dispel untrustworthy ones (Shinada et al., 2004). Trusted sources are more likely to communicate their experience because failure to act on this duty undermines the trust on which the network is based (Fiske, 1992; Sheppard & Sherman, 1998). Second, once collectivist trustors collect feedback from multiple trusted third parties about the potential trustee, they are more likely to rely on this consensus information to draw inferences of future conduct (Fiske et al., 1998). Collectivist trustors think holistically and contextually, and thus are less likely than individualist trustors to generalize from isolated events. However, when legitimate signals indicate high base rates for a specific type of behavior, collectivists are more likely to accurately account for them in their decisions (Choi et al., 1999). H7. A questionable relational reputation will have a stronger negative effect on trust (via trustee benevolence) for trustors in collectivist cultures than for trustors in individualist cultures. Token control efforts Trustors may start with a tentative belief regarding the trustee and then deliberately try to gauge whether this belief is correct. Ybarra and Stephan (1999) found evidence that people with a situational orientation tend to predict more positive behaviors than people with a dispositional orientation. Cook et al. (2005) suggested that collectivists may start with more positive expectations, yet be more reluctant to engage in effortful trust-building by, for example, taking a series of risks. They may be particularly reluctant to take risks when these could damage valued relationships (Morris & Gelfand, 2004; Sheppard & Sherman, 1998). Therefore, before jumping in, collectivists may prefer to thoroughly verify that the potential partner can live up to expectations of deep relational connections. One way to do this is to incrementally test the quality of the bond (McKnight et al., 1998). This validation process helps reinforce collectivists’ initial expectations (Ybarra & Stephan, 1999)—token control efforts have been shown to over-inflate confidence in one’s original judgment, even when they do not surface positive evidence (Kramer, 1994). On the other hand, individualists often start the negotiation process with arelational schemas and thus feel a lesser need to pretest the relational bond before heading into material and economic exchanges (Gelfand et al., 2006).

Methods Research design To assess how the effectiveness of trust signals varies between trustors in collectivist and individualist societies, we relied on a scenario study which replicated a within-country fractional factorial design in two distinct national settings. The scenario specified four dispositional and four contextual signs (two for each component of trustworthiness). Because early impressions are formed rapidly and decision makers have limitations in their ability to access and process information, we felt that exposure to eight distinct signs was sufficiently narrow to ensure that all were considered in the process, yet sufficiently broad to shift attention towards the more relevant ones. These trust-warranting signs were mapped according to an orthogonal array (Hedayat, Sloane, & Stufken, 1999). The factorial combinations were then embedded within a vignette (Rossi & Anderson, 1982). Each combination was accompanied by a core script, which was identical across respondents. Participants were asked to take on the role of a decision maker, evaluate a single combination of trust signals, and then make a recommendation. The core script stated that the participants were evaluating a potential joint venture partner which was strategically important to their employer (a small consumer electronics company with 97 employees). The script explicitly noted that it was critical to secure ongoing collaboration with the selected partner: The proposed project is expected to be technically complex and last about six years. Due to the emergent nature of this project, it may be difficult to specify ahead of time what work needs to be done. It may also be difficult to monitor progress [. . .]. Because the project is complex and difficult to monitor it will require a high level of collaboration by both parties to succeed. The partner’s size, technical skills, and financial capability were held constant across respondents: The potential partner, X-Corp, is similar in size (about 100 employees), [. . .] appears to be a strong candidate for the partnership, [. . .and its] skills appear to be a strong technical complement for the skills available from your company for this project [. . .It] is financially sound and should have no difficulty maintaining its share of the investment throughout the project. Selection of countries

H8. Token control efforts will have a stronger positive effect on trust (via trustee benevolence) for trustors in collectivist cultures than for trustors in individualist cultures.

Our empirical tests are based on country-level contrasts between an East Asian, high collectivism/low individualism culture (Japan) and a Western, low

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collectivism/high individualism country (Canada). Several studies have presented both qualitative and quantitative arguments that the Japanese possess more interdependent self-construals and that Canadians possess more independent self-construals (Gundykunst et al., 1996; Heine, Lehman, Markus, & Kitayama, 1999). These two settings also offer a good contrast in terms of relative reliance on dispositional versus situational attributions (Choi et al., 1999; Fiske et al., 1998) and relative elaboration, accessibility, and applicability of relational schema (Kashima et al., 1995; Sanchez-Burks, 2002). Last, Canada and Japan capture the contrast between market pricing and communal sharing systems of exchange, as discussed by Fiske (1992) and Sheppard and Sherman (1998). Samples and responses In an effort to minimize non-cultural differences among respondents, we sampled undergraduate business students (Lenartowicz & Roth, 1999). We matched the education levels of the Canadian and Japanese samples by distributing surveys only to students enrolled in third and fourth year business courses. All surveys were handed out during the last 30 minutes of class. Once the instructor had left the class, the researchers or their confederates informed students that participation was voluntary and not related to course credit. Students who chose not to participate were free to leave the classroom. All participants completed their surveys in class, holding the effect of background factors constant, both within and between the samples. In Canada, 528 surveys were distributed at the University of British Columbia and 192 surveys were distributed at the University of Regina. We received 238 responses from the University of British Columbia (45% response rate) and 85 from the University of Regina (44% response rate). All surveys included information about respondents’ cultural background. In the Canadian sample, we retained only those students who identified themselves either as having been born in Canada or as having lived in Canada at least since elementary school (age 7) and who spoke English as one of their native languages. One hundred and sixty eight respondents from the University of British Columbia did not meet these criteria. They were either very recent immigrants or exchange students from other countries. The retained 155 responses accounted for an overall response rate of 28%, after adjusting the sample size for non-Canadian participants. In Japan, 192 surveys were distributed at the University of Hokkaido and 144 surveys were distributed at Shinga University. We received 119 responses from the University of Hokkaido (62% response rate) and 77 responses from Shinga University (54% response rate). All respondents reported Japanese ethnicity, accounting for a response rate of

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58%. Both samples surpassed the minimum size threshold of 144 respondents per country recommended for capturing medium-sized effects with the chosen fractional factorial design (Cohen, 1988; Murphy & Myors, 1998). The average age of Canadian respondents was 21 years; 59% were female. The average age of Japanese respondents was 20 years; 26% were female. Age and gender were used as control variables in all analyses. Equivalence In cross-national research, it is important to establish that the constructs, samples, and measures used are equivalent prior to testing comparative hypotheses (Behling & Law, 2000). We followed the approach recommended by Bensaou, Coyne, and Venkatraman (1999, p. 673), who discuss three types of equivalence: construct equivalence, sampling equivalence, and measure equivalence. Construct equivalence is supported when the behavior of interest is considered relevant and has the same function across the studied settings (functional equivalence), and is similarly interpreted by individuals across countries (conceptual equivalence). Trusting beliefs and trustworthiness have received significant support in experimental and field studies in Japan and Canada, and more generally in comparative studies of North American and East Asian trustors (Cook et al., 2005; Huff & Kelley, 2003). Sampling equivalence requires a research design which ensures that any differences observed are not due to differences in the samples (Reynolds, Simintiras, & Diamantopoulos, 2002). Our Canadian and Japanese respondents were closely matched on their level of education (e.g., Buchan et al., 2002) and relatively homogeneous and equivalent in terms of socio-demographic characteristics. Nevertheless, an important caveat is that our student samples were not randomly representative of their national populations (Oyserman et al., 2002), but rather deliberately selected to maximize internal validity. Measure equivalence requires that the units, standards, and procedures used to capture the phenomenon of interest are comparable across countries (calibration equivalence); that the linguistics involved in conducting the research preserve the meaning (translation equivalence); and that the dimensionality and precision of measurement is replicated in each setting (metric equivalence). We established calibration equivalence by relying on 7-point Likert-type scales, with anchors from strongly disagree to strongly agree. These scales have been widely used and validated in trust research in North America (Mayer & Davis, 1999; McKnight et al., 2002), in East Asian countries (e.g., Chen et al., 1998; Child & Mo¨llering, 2003; Yamagishi et al., 1998a, 1998b; Yamagishi & Kiyonari, 2000), and in

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cross-cultural comparative studies (Cook et al., 2005; Huff & Kelley, 2003). To ensure translation equivalence, the instrument was developed by a team of Canadian and Japanese researchers who paid close attention to specific meanings in each national setting (Van de Vijver & Leung, 1997, p. 39). A bilingual linguist translated the English version into Japanese and another bilingual linguist back-translated the Japanese version into English. Each version was also reviewed by several academic experts from both countries. Metric equivalence is addressed below.

that trustworthiness components have a similar direct influence on trust. Simultaneous equality constraints for the correlations among the trustworthiness components also result in a non-significant worsening in model fit compared to the partial criterion equivalence model (Dv2 = 10.47, df = 6). The hypotheses were tested on this constrained stacked model to ensure that the second-order specification was equivalent in the two samples. The magnitude and significance of all the hypothesized effects were robust to these constraints. Control variables

Criterion variable The criterion variable, trust, was operationalized using a formative second-order factor, predicted by four reflective first-order factors: ability, integrity, predictability, and benevolence (Edwards, 2001; MacCallum & Browne, 1993). Our operationalization treats each trustworthiness component as a separate cause of trust, with moderate correlations—changes in a component are sufficient (but not necessary) to observe an increase in trust (Diamantopoulos & Winklhofer, 2001). Two highly intercorrelated indicators of trusting beliefs were specified as effects of the second-order trust latent construct. We assessed the metric equivalence of the first-order factors (i.e., ability, integrity, predictability, and benevolence) by splitting the overall sample in two random halves. We conducted an unconstrained exploratory factor analysis on the first half of the sample to verify that each dimension represented a separate unidimensional factor. Confirmatory factor analyses models were then run separately for each multi-item factor using the second half of the sample, as recommended by Bensaou et al. (1999) and Bollen (1989). We used stacked models for the Canadian and Japanese samples and a series of equality constraints, to sequentially test whether, for the multi-item reflective factors: (a) the same indicators load on their specified constructs in both national samples (same-form equivalence); (b) the freely estimated loadings of these indicators are the same in the two national samples (factorial equivalence); and (c) whether the error-variances for all indicators of each latent construct are equal for the two samples (error variance equivalence). The integrity and benevolence factors showed partial equivalence—they had the same form and factor loadings in the two samples. The predictability factor was fully equivalent. We also tested the equivalence of the second-order formative construct between the Canadian and Japanese samples (Chen, Sousa, & West, 2005). We first constrained the factor loadings for the four trustworthiness cause-indicators to be equal across samples. The test for partial criterion equivalence shows a non-significant worsening in model fit (Dv2 = 2.97, df = 4), suggesting

Our control variables are shown in Table 2. In addition to age and gender, we controlled for within-country differences in respondents’ general disposition to trust people and institutions (Mayer & Davis, 1999); their specific disposition to trust alliance partners in a business setting (McKnight et al., 1998); and allocentrism, which is a measure of individual-level differences in respondents’ orientation towards the collective (Singelis & Brown, 1995; Triandis, 1995). We standardized the allocentrism scores within each sample prior to the analyses, because we wanted to capture individual variability within each setting without obscuring the cross-cultural differences of interest, and because reports could have been subject to reference group effects (Heine, Lehman, Peng, & Greenholtz, 2002). We also controlled for each respondent’s perception of risk (Deutsch, 1960; Sheppard & Sherman, 1998). Analyses We used structural equations methodology with the elliptically reweighted least square (ERLS) method offered by EQS to test our hypothesized model. The ERLS method assumes a multivariate elliptical distribution that is a more generalized form of the multivariate normal distribution assumed by the commonly used maximum likelihood (ML) method. According to Sharma, Durvasula, and Dillon, ‘‘the performance of ERLS is equivalent to that of ML for normal data and superior to that of other estimation techniques for non-normal data’’ (1989, p. 220). We simultaneously estimated stacked structural equation models for the Canadian and the Japanese samples (Table 3). All paths, including factor loadings, and all non-fixed error variances, were initially allowed to differ in magnitude between the two samples (except for the formative trust construct, which was identically specified in both models). Each model included a ‘Common Method Variance’ latent variable in an effort to statistically account for response bias, as recommended by Podsakoff, MacKenzie, Lee, and Podsakoff (2003). We allowed all items collected by the Likerttype, self-report scales—indicators of trust, general

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Table 2 Operationalizations of criterion and control variables Construct

Operationalization

Trust (formative construct)

Behavioral intention: Two independent indicators, 7-point Likert-type, with anchors from strongly disagree to strongly agree: (1) I believe I can trust X-Corp; (2) Because I trust X-Corp I would enter into an alliance. Reliability: .83 (Canada), .82 (Japan). Ability: Single item, 7-point Likert-type, with anchors from strongly disagree to strongly agree: I believe X-Corp has, or can develop in time, the knowledge, skills, and abilities necessary to effectively perform its tasks in the alliance. Integrity: Five-item scale, 7-point Likert-type, with anchors from strongly disagree to strongly agree: (1) I believe X-Corp will carry out its contractual agreements; (2) I believe X-Corp will solve issues as they come up; (3) I believe X-Corp will use discretion in dealing with sensitive matters; (4) X-Corp will keep promises made to me; (5) X-Corp will not make promises they cannot keep. Reliability: .72 (Canada), .72 (Japan). Predictability: Two-item scale, 7-point Likert-type, with anchors from strongly disagree to strongly agree: (1) I could predict how X-Corp will behave in an alliance; and (2) I can predict what X-Corp will do under relevant circumstances. Reliability: .78 (Canada), .72 (Japan). Benevolence: Four-item scale, 7-point Likert-type, with anchors from strongly disagree to strongly agree: (1) X-Corp will make an open-ended commitment to take initiatives for mutual benefit while refraining from unfair advantage taking in the alliance; (2) I believe X-Corp has no negative intent towards my company and furthermore intends to be cooperative; (3) I believe that X-Corp and my company share similar goals and values; (4) I believe that X-Corp intends to be cooperative. Reliability: .72 (Canada), .76 (Japan).

Age

Continuous variable.

Gender

Dummy variable, 0 Female, 1 Male.

General disposition

Six-item, 7-point Likert-type, with anchors from strongly disagree to strongly agree (adapted from Mayer and Davis, 1999): (1) Most people can be counted on to do what they say they will do; (2) Most experts tell the truth about the limits of their knowledge; (3) Most salespeople are honest in describing their products; (4) Most repair-people will not overcharge people who are ignorant of their specialty; (5) Most people answer opinion polls honestly; (6) Most adults are competent at their jobs. Reliability: .65 (Canada), .74 (Japan). MeanCanada = 3.747 (STDCanada = .815), MeanJapan = 3.270 (STDJapan = .944).

Specific Disposition

Single item, 7-point Likert-type scale, from strongly disagree to strongly agree: Most companies in alliances can be trusted. MeanCanada = 4.032 (STDCanada = 1.266), MeanJapan = 3.781 (STDJapan = 1.307).

Allocentrism

Eight-item scale, 7-point Likert-type, with anchors from strongly disagree to strongly agree: (1) The interests of the family as a whole are more important than the interests of any individual within the family; (2) One’s primary responsibility should be to family, including one’s extended family; (3) One should behave toward cousins the same way as toward one’s brothers and sisters; (4) People’s responsibility for family members should go beyond their parents and children; (5) People need to identify with a group; (6) The interests of the group take priority over the interests of any individual; (7) Members of the group should be mutually responsible for all the members; (8) Individuals should take care of each other more than of themselves. Reliability: .73 (Canada), .74 (Japan). MeanCanada = 4.545 (STDCanada = .843), MeanJapan = 4.485 (STDJapan = .799). Values for each respondent were standardized within each country to reflect individual variability rather than cultural differences.

Perceived risk

Single item, 7-point Likert-type, with anchors from strongly disagree to strongly agree: This proposed alliance presents a low level of risk for my company (reverse coded).

Perceived deterrence

Single item, 7-point Likert-type, with anchors from strongly disagree to strongly agree: X-Corp cooperative behavior is guided primarily by strong threats of punishment or the lure of rewards.

Table 3 Metric equivalence of multi-item trustworthiness components and behavioral intention

Abilityb Integrity Predictabilityc Benevolence

Exploratory factor analysisa N = 166

Confirmatory factor analyses, stacked models N = 185

Variance

Form equivalence

Factorial equivalence

v2 (df)

p

v2 (df)

p

Dv2 (Ddf)

v2 (df)

p

Dv2 (Ddf)

NA 26.9 (10) Base 8.2 (4)

NA p = .003 Base p = .084

NA 33.4 (15) 4.7 (2) 14.7 (8)

NA p = .004 p = .096 p = .064

NA 6.5 (5), ns NA 6.5 (4), ns

NA 67.3 (20) 5.8 (4) 24.6 (12)

NA p < .001 p = .218 p = .017

NA 33.9 (5), p < .005 1.1 (2), ns 9.9 (4), p < .05

18.40 16.56 12.06 6.73

Loadings

.96 .31–.96 .78–.84 .55–67

Error-variance equivalence

a

Maximum Likelihood extraction, 4 factors, Oblimin with Kaiser maximization. Inter-factor correlations: .119–.554. Confirmatory factor analyses were not performed for ability, measured using a single item. Its loading was fixed at 1 with error variance at 0 in both samples. c Predictability was measured with two items, both loadings were set at 1 in both samples, thus the factor equivalence model is the base for testing invariance. b

and specific disposition, allocentrism, and perceived risk—to load on the common method variance latent, in addition to their theoretical constructs. The latent was anchored by a single item effect-indicator of per-

ceived deterrence. The common method latent partials out calculation, that is reliance on a partner based only on economic rewards or punishments (Doney et al., 1998).

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1 1. Age 2. Gender 3. Orientation 4. General disposition 5. Specific disposition 6. Perceived risk 7. Perceived deterrence 8. Professional designation 9. Relational/task focus 10. Voluntary promises 11. Ex-ante congruency 12. Dissimilarity 13. Thwarted connection 14. Relational reputation 15. Token control efforts 16. Ability 17. Predictability 18. Integrity 19. Benevolence 20. Trusting intentions

2

3 .11

.14 .11 .04 .14 .17 .07 .06 .01 .04 .07 .09 .11 .13 .06 .15 .06 .04 .09 .20

.12 .01 .13 .00 .01 .03 .06 .10 .04 .08 .03 .05 .07 .13 .07 .08 .02 .06

4 .01 .04 .13 .11 .08 .04 .19 .00 .08 .11 .05 .14 .07 .03 .13 .09 .06 .03 .03

5 .09 .07 .22 .24 .10 .09 .07 .06 .00 .01 .08 .10 .03 .02 .16 .24 .25 .29 .13

6 .07 .07 .14 .28 .09 .10 .17 .13 .01 .05 .05 .14 .12 .20 .15 .17 .15 .23 .08

7 .03 .17 .03 .08 .17 .06 .05 .05 .17 .20 .15 .05 .10 .04 .15 .24 .25 .28 .38

8 .00 .10 .03 .00 .12 .13 .07 .06 .06 .02 .04 .07 .19 .02 .03 .09 .01 .08 .06

9 .03 .04 .04 .04 .02 .03 .04 .03 .03 .09 .02 .00 .01 .01 .11 .14 .04 .00 .05

10 .26 .01 .11 .09 .09 .00 .13 .14 .04 .02 .04 .01 .01 .03 .14 .05 .09 .14 .02

.01 .05 .05 .01 .00 .01 .02 .06 .00 .07 .04 .05 .42 .03 .01 .03 .20 .07 .13

11 .11 .13 .06 .10 .00 .05 .01 .08 .01 .04 .07 .22 .21 .11 .05 .10 .19 .06 .16

12 .14 .01 .02 .09 .03 .02 .03 .19 .04 .02 .07 .02 .19 .05 .11 .05 .08 .11 .06

13 .10 .02 .15 .01 .04 .03 .04 .11 .05 .02 .22 .07 .04 .02 .09 .02 .10 .05 .10

14 .05 .00 .06 .11 .11 .01 .02 .03 .00 .38 .18 .23 .04 .00 .05 .10 .29 .21 .17

15 .07 .09 .06 .04 .04 .06 .04 .11 .13 .03 .03 .10 .02 .00 .17 .08 .06 .05 .05

16 .12 .00 .17 .15 .18 .07 .02 .08 .03 .07 .04 .01 .07 .10 .07 .19 .38 .48 .23

Note: Zero-order correlations for the Canadian sample are shown below the diagonal; correlations for the Japanese sample are presented above the diagonal. All correlations significant at p < .05 appear in italics.

17 .07 .08 .15 .21 .04 .18 .05 .12 .09 .08 .07 .18 .24 .00 .05 .13 .39 .30 .22

18 .07 .04 .14 .33 .32 .18 .13 .01 .04 .08 .06 .03 .07 .20 .02 .41 .25 .61 .58

19 .13 .15 .22 .24 .41 .24 .09 .00 .06 .11 .03 .01 .02 .19 .10 .45 .06 .57 .50

20 .07 .10 .20 .29 .43 .14 .16 .09 .03 .05 .01 .02 .06 .12 .03 .33 .05 .49 .62

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Table 4 Correlationsa

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We tested the hypothesized moderation effects of collectivism/individualism by constraining each hypothesized path to be equal across the two samples. When the constrained model produced a significant worsening in fit compared to the unconstrained model, the equality of the constrained paths was rejected, thus lending support to the hypothesized moderation effects. That is, the paths are significantly different between the chosen individualistic and collectivistic settings. MacCallum, Browne, and Cai (2006) suggest a simple procedure for estimating the power of small differences in fit between nested models, based on the size of the sample, the degrees of freedom of the compared models, and the expected effect size (determined by the pair of RMSEA values, and their difference). Our relatively large sample size and high degrees of freedom allow power above .8 for detecting RMSEA differences as low as .02 between moderate values of fit (e.g., in the range .04 to .06). However, we do not have a large enough sample to detect a small difference in fit between two well-fitting models (MacCallum et al., p. 25). In this case, low power may lead to Type II errors; that is, incorrect decisions to not reject the null hypothesis of model invariance (Kim, 2005). To mitigate against this possibility, we a priori set a .10 significance level for model comparisons.

Results Table 4 shows the correlations for the Canadian and Japanese samples. For Canadian trustors, integrity had the highest correlation with trusting beliefs (.58), more than twice the strength of the association between ability

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and trusting beliefs. For Japanese trustors, benevolence and trusting beliefs had the highest correlation (.62), followed by integrity, ability, and predictability. The stacked model with equivalent trust measures fit the data well (v2 = 538.46, df = 420, p < .001, GFI = .90, CFI = 970, RMSEA = .028). Table 5 shows the path coefficients for Canadian and Japanese trustors. Dispositional signs had the predicted strong and significant effects for individualist trustors; their effects were non-significant for collectivist trustors. Contextual signs had the hypothesized effects for collectivist trustors and were non-significant for the individualist trustors. This pattern of results suggests that the pathways to forming trust in cross-cultural encounters vary with trustors’ national culture. Notably, the influence of dispositional and contextual signs within each setting was remarkably focused on the predicted component of trustworthiness. Dispositional signs had only the predicted effects on ability and integrity. Contextual signs yielded three unexpected effects. Specifically, a questionable relational reputation tainted collectivist trustors’ perceptions of integrity. Individualist trustors were skeptical of token control efforts, such as a longer predecision interaction period. They regarded these as a sign of incompetence (Sanchez-Burks, 2002). Individualists also viewed greater dissimilarity (i.e., the trustee was from a developing country) as a sign of higher ability. Perhaps individualists assume that these trustees need more talent to overcome larger differences in social norms. Nested model comparison tests support four of the eight moderation hypotheses. Voluntary promises have a significantly stronger effect for individualists (H3). Dissimilarity, thwarted connection, and token control

Table 5 Results of stacked structural equation models Ability Japan Age Gender Allocentrism General disposition Specific disposition Perceived risk H1: Professional designation H2: Relational/task focus H3: Voluntary promises H4: Ex-ante congruence H5: Dissimilarity H6: Thwarted connection H7: Relational reputation H8: Token control efforts

.12* (.06) .14 (.17) .15* (.08) .06 (.09) .12* (.06) .05 (.05) .12 (.16) .14 (.16) .05 (.16) .19 (.16) .03 (.16) .15 (.17) .21 (.18) .20 (.15)

Integrity Canada .05 (.04) .16 (.14) .14* (.07) .17* (.09) .11* (.06) .04 (.05) .28* (.14) .23* (.14) .09 (.16) .13 (.15) .32* (.16) .15 (.16) .18 (.17) .38* (.14)

Japan .07 (.05) .05 (.16) .06 (.07) .24* (.08) .20* (.06) .12* (.05) .03 (.15) .18 (.15) .02 (.15) .04 (.14) .04 (.15) .14 (.16) .30* (.16) .07 (.14)

Predictability Canada .04 (.05) .42* (.16) .12 (.08) .23* (.10) .08 (.07) .12* (.06) .07 (.16) .16 (.15) .56* (.17) .39* (.16) .11 (.17) .01 (.17) .25 (.19) .11 (.15)

Japan .08 (.06) .37* (.17) .13* (.08) .26* (.09) .13* (.06) .16* (.05) .17 (.16) .18 (.16) .11 (.16) .23 (.16) .31* (.16) .50* (.17) .04 (.18) .00 (.15)

Benevolence Canada .03 (.05) .06 (.19) .08 (.10) .30* (.11) .09 (.08) .20* (.07) .29 (.19) .08 (.18) .06 (.21) .15 (.19) .13 (.21) .14 (.20) .23 (.23) .01 (.18)

Japan .09* (.05) .15 (.14) .15* (.06) .09 (.07) .25* (.05) .12* (.04) .03 (.13) .06 (.13) .07 (.13) .14 (.13) .08 (.13) .04 (.14) .31* (.15) .27* (.12)

Canada .03 (.04) .10 (.13) .04 (.07) .24* (.08) .15* (.06) .11* (.05) .06 (.13) .12 (.13) .05 (.14) .01 (.13) .05 (.14) .07 (.14) .32* (.16) .20 (.12)

Note: Elliptical estimation, with full equivalence constraints for the criterion variable across the two samples. The results are robust to alternative estimation methods. First factor loadings for predictability, ability, benevolence and integrity and their error correlations are set equal for Canada and Japan. Reported effects are standardized coefficients. Standard errors appear in parentheses. * p < .05, one-tailed tests.

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vidual differences (qualifications, expertise, accomplishments). Dispositional signals may not be credible in societies which discourage the display of individual differences. Thus, trustors may find it hard to rely on indicators of individual talent to distinguish between trustworthy and untrustworthy trustees. Foreign trustees who approach collectivists hoping that their superior talents will be rewarded with quick trust may be disappointed. On the other hand, trustees who fail to signal their ability to individualist trustors (perhaps because their culture discourages self-promotion) may miss the opportunity to establish high levels of initial trust (McKnight et al., 1998).

efforts have a significantly stronger effect for collectivists (H5,H6,H8). Four of the moderation hypotheses (H1, H2, H4, H7) are not supported. Although each effect is almost twice as strong in one culture as in the other, all in a direction matching our predictions, constraining the effects of professional designation, relational/task focus, ex-ante congruence and relational reputation did not yield a significant worsening in model fit. The unconstrained and constrained models were equivalent (Table 6). Ability Our findings show no significant differences in the extent to which Canadian and Japanese trustors rely on dispositional signs (professional designation and relational/task focus) when attributing ability to an unfamiliar trustee in cross-cultural encounters. The differences between the two samples are small, even though the effects of these two dispositional signs are almost twice as strong for Canadians as for Japanese, and only significant for the former. The unconstrained and constrained models fit the data very well (RMSEA < .03) and the difference between their fit indicators is very small; thus, the nested model comparison test has low power (MacCallum et al., 2006). Nevertheless, even if the two models are statistically equivalent, it is important to highlight that, within the Japanese sample, none of the dispositional signs affected collectivists’ assessments of ability. These results corroborate earlier arguments by Doney et al. (1998) that trust production via ability assessment depends on cultural norms concerning respect for indi-

Integrity We also considered how trust is formed via trustee integrity. Individualists seem to be significantly more sensitive to the withdrawal of a promise (Malhotra & Murnighan, 2002), but this concern is not universal. Collectivists espouse a dialectic view (Fiske et al., 1998) and show greater cross-situational flexibility (Suh, 2002). As a result, they may expect that making a promise implies keeping it in some circumstances but breaking it in others—thus, a breached promise is less likely to taint trustworthiness. We obtained a very similar pattern of results for ex-ante congruence, although the intercultural difference is not significant (p = .105). Individualists highly value complete, detailed promises given before a relationship gets started; collectivists see little merit in the exercise. There are clear differences in how collectivists and individualists develop trust. These distinctions are noteworthy because most

Table 6 Moderating effects of national culture—nested structural equation models v2

df

Dv2

Ddf

p

527.994 530.962 538.468

410 414 420

2.968 10.474

4 10

ns ns

539.484 538.553

421 421

1.016 .085

1 1

p = .313 p = .771

No No

Integrity H3: Voluntary promises H4: Ex-ante congruence

544.993 541.090

421 421

6.525 2.622

1 1

p = .011 p = .105

Yes No

Contextual signs Predictability H5: Dissimilarity H6: Thwarted connection

541.324 543.807

421 421

2.856 5.339

1 1

p = .091 p = .021

Yes Yes

Benevolence H7: Relational reputation H8: Token control efforts

538.499 544.173

421 421

.031 5.705

1 1

p = .860 p = .017

No Yes

Unconstrained stacked model Stacked model (partial criterion equivalence) Stacked model (full criterion equivalence) Moderation effects of national cultures Dispositional signs Ability H1: Professional designation H2: Relational/task focus

Note: Nested models are compared against the full criterion equivalence Stacked Model, estimated simultaneously in Canada and Japan.

Support

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Western theories of trust formation hold that trust is built when promises are kept, and threatened when integrity is lacking (Butler, 1991; Tinsley, 1996). In Western cultures, individual attributes and intentions are seen as critical for ensuring cooperative behavior and mitigating the risks of cheating. This is partly because trustors tend to see trustees as autonomous agents, with stable intentions that apply across situations, and partly because the meaning and weight of a promise is much better defined in cultures that value explicit communication (Doney et al., 1998). However, neither assumption holds in collectivist societies—there, giving and keeping a promise is not a credible sign of trustworthiness. Overall, dispositional signs inform the trusting choices of individualists, but have limited effects on collectivists who pay more attention to connections with others. Predictability Collectivists are particularly sensitive to signs of situational (ab)normality (McKnight et al., 1998). Japanese trustors have sharp social categories, which deeply shape the way they make sense of the world. This sensitivity is reflected in the terms uchi and soto, which mean ‘in the house’ versus ‘the outside’ (Yamagishi et al., 1998a, 1998b). Our findings show that the social norms and roles inferred from social categorization differentially affect trust formation. We studied two contextual signs: dissimilarity in the system of social norms governing a trustee’s interactions, and symbolic actions that may thwart a trustee’s connection with trustors. We found that these signs are significantly more likely to hinder trust production in collectivist than individualist societies. In the former, outsiders are considered less trustworthy because they are harder to predict (Huff & Kelley, 2003). This result reiterates the importance of breeding familiarity when approaching collectivist trustors. Complying with social norms is equally important; even small challenges to these norms may raise doubts about the stability of the connection and thus jeopardize predictability-based trust. Cross et al. (2002, p. 401) suggest that once certain relationships are included in the definition of the self, they become a ‘‘global selfstructure that is a source of motivation to develop close relationships with others.’’ This structure operates implicitly, without deliberate activation or conscious control. In other words, collectivists may automatically screen trustees based on signs of similarity, and/or screen them out if initial relational expectations are thwarted. For individualist trustees, meeting these expectations will require effortful processing, even deliberate planning, but our results suggest that it would be worthwhile.

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Benevolence Japanese trustors were also significantly more likely to infer benevolent intentions when trustees gave them the opportunity to verify relational expectations by repeatedly engaging in token control efforts (McKnight et al., 1998). But a prolonged ‘testing’ period was certainly not welcomed by individualists. Indeed, it had a marginal negative effect on benevolence (p < .10, onetailed) by conveying an unexpected impression of lower ability. Perhaps individualists believe that time spent building a relationship is at odds with the main task at hand (Sanchez-Burks, 2002). These results corroborate the differences that have been observed in the relationship-building expectations of collectivists and individualists during early negotiations (Gelfand et al., 2006; Morris & Gelfand, 2004). Our results also confirm anecdotal evidence concerning the different length of the courtship period in the two settings—one reason for these findings may be that collectivists pay greater attention to processing contextual cues. These differences have intriguing implications for cross-cultural encounters between collectivists and individualists. It is unlikely that collectivists can deliberately ‘turn off’ intensely relational schemas, as much as it would be unreasonable to expect individualists to replace their arelational ones. If these schemas implicitly organize actions and reactions (Cross et al., 2002), collectivist trustees may not be able to avoid emitting the relational signs that individualists distrust. And, individualist trustees may never emit the relational signs that signal positive benevolence to collectivists. This study suggests one alternative that can help partners overcome this double-bind. Individualists may attempt to compensate by conveying the signs of benevolence that are under their deliberate control, such as maintaining a flawless relational reputation. Our results are particularly encouraging in this direction because we found that Canadian and Japanese trustors were equally likely to not trust potential partners who had a questionable relational reputation. Conversely, if positive reputational signals are sufficient to kick-start the relationship, individualist trustees will gain more opportunities to signal their concern and loyalty as the relationship unfolds. This may trigger a virtuous cycle, where a good reputation opens more opportunities for relational interactions. Over time, learning helps update trustee’s relational schemas, and signs that were initially unfeasible may come within reach.

Discussion This study offers a culture-contingent model of how trust is formed in cross-cultural encounters. We extend prior arguments about the role of culture in producing

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trust (Doney et al., 1998; Sheppard & Sherman, 1998) by arguing, and showing, that trustors are more likely to rely on culture-consistent signs and tend to neglect inconsistent ones when assessing the trustworthiness of an unfamiliar partner. More specifically, collectivists are more responsive to situational signs and consistently unresponsive to dispositional signs in their initial assessments of trustworthiness; the converse holds for individualists. Furthermore, we argue and show that differential attention to dispositional and contextual signs tends to evoke distinct types of trustworthiness beliefs. Lehman, Chiu, and Schaller (2004) suggested that cultural frames become important tools for making sense of reality when the relevance of cultural paradigms is highlighted by the behavioral context. Our study applies this insight to better understand trust formation in cross-cultural collaborations. We explain how cultural norms and values that are conducive to efficient trust production in one setting may be impotent, misleading, and even damaging in another. Taken together, our findings support at least a tentative assertion that mismatched signs hinder trusting choices, while signs that are aligned with the culturally laden expectations of trustors hasten trust production. We acknowledge that the set of signs we examined is suggestive rather than exhaustive and that future studies are needed to verify if and how these conclusions generalize to other cultural dimensions. However, our pattern of findings provides several interesting insights. First, trust formation is deeply embedded within distinct relational systems (Fiske, 1992; Sheppard & Sherman, 1998); crossing from one system to another changes the bases of trust production. This applies whether we are moving between cultures or among different spheres of influence within a culture, such as between family and business. Trust cannot develop when old tools have failed and new ones remain unclear. So far, we know very little about how partners come to anticipate and recognize distinct bases of trust and adjust the signs they emit accordingly. However, extensive studies of self-construal, relational schemas, and implicit theories of agency and attribution provide a largely consistent basis for beginning to contrast trust formation in transactional versus deeply relational interactions (Fiske et al., 1998). Our study takes one step in this direction, and in so doing tackles some of the challenges, and possible solutions, for trustors transitioning from collectivist to individualist cultures and vice versa. Extending this line of inquiry, both across cultural dimensions and across relational systems within the same culture, would shed additional light on how signs shape emergent collaborations. Future research may also explore how signs intensify or erode trust for partners who have worked together over an extended period of time. We are also interested in fleshing out some of the dynamics

by which partners come to understand, practice, and harness system-specific trust production. Second, our results lend some support to the idea that trusting choices may unfold by qualitatively different logics in distinct relational systems (Fiske et al., 1998; Sheppard & Sherman, 1998). Assumptions concerning self-determined preferences, choices, and actions increase the confidence that individualist trustors have in individual traits. These arguments closely resonate with March’s (1994) logic of consequences, where trustees form trusting intentions by anticipating the outcomes of specific actions, given the trustee’s current traits and preferences. On the other hand, assumptions concerning a fluid, closely interconnected self, who complies with social norms and adopts situationally appropriate roles, align more closely with a logic of appropriateness (March, 1994). Future research into the logics and processes that enable trust to form in different relational systems, the flexibility (or resilience) of these processes, and their transparency (or opaqueness), will determine whether, when, and how much trustees can deliberately adjust their signs of trustworthiness to fit trustors’ culturally laden expectations. Limitations As with any study, our findings are limited by our design and method. We used a generic core scenario that held several objective characteristics of the alliance constant across respondents and systematically varied eight different types of trust-warranting signs. This design simulated trusting choices in emergent collaborative relationships but lacked the context and interpersonal dynamics of typical alliance decisions. At the same time, the task fostered considerable involvement. Each respondent evaluated a single, but detailed, scenario which provided background information about the partners, their current positions, and future goals, and asked respondents to make a final recommendation. Although a scenario study misses some of the nuances of realworld decisions, we feel that this trade-off is warranted by the opportunity to precisely specify and orthogonally vary a set of relevant signs. Our design also allowed us to control non-cultural differences and common method biases. Second, sample equivalence considerations motivated us to choose undergraduate business students as respondents. In cross-cultural studies, student samples often yield findings comparable to those obtained by studying managers, sales-people, and bankers (Oyserman et al., 2002). The respondents had comparable levels of formal education, but lacked the practical experience of seasoned decision makers. Student samples provided conservative tests for our hypotheses, because differences in the attributional styles and relational schemas of collectivists and individualists tend to amplify with age and

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cultural experience (Fiske et al., 1998). Likewise, exposure to broadly consistent curricula may motivate Canadian and Japanese students to react similarly to the scenario conditions. However, current findings await replications on samples of business executives. Last, we focused on weak signs (Mischel, 1977) because these are more frequently available in emergent interactions and they increase a trustor’s need to tap into cultural values. Strong signs leave little room for discretion: a trustor simply responds consistently. Nevertheless, strong signs may trigger powerful reactions, especially when they go against a trustor’s culturally laden expectations. Because of their surprise effect, these signs may warrant thicker trust or sharper distrust. Future studies may examine to what extent such overshooting occurs, persists, or gets corrected in subsequent interactions. Managerial implications With the above limitations in mind, our findings provide some insights into how differential attention to dispositional and contextual signs influences the trusting choices of educated, but novice, decision makers. Signs which consistently evoke trust within one culture may prove impotent, even off-putting, in cross-cultural interactions. A mismatch between the signs emitted by the trustee and those used by the trustor to explain and predict behavior can hinder the production of initial trust in cross-cultural encounters. Our findings show that the ‘gap’ between collectivists and individualists is wide. Closing it requires deliberate action—trustees can manage the signs they emit and trustors need to reconsider the way they interpret and process these signs. Because collectivists rely heavily on contextual signs and far less so on dispositional signs, individualist trustees, who tend to focus on the latter while discounting the former, may fail to prove their trustworthiness. Similarly, collectivist trustees may neglect sending the dispositional signals that individualist trustors expect, simply because they do not attach as much importance to dispositions. Our findings discuss some reasons why it has proved so challenging for alliance partners to develop initial trust in cross-cultural encounters and suggest that some of these initial challenges may be overcome by deliberately managing the signs exchanged in emergent relationships. Concluding remarks This study explores how trustors’ national culture determines which signs evoke or inhibit trust in emergent cross-cultural encounters. We predicted that collectivists’ initial trusting choices will be more responsive to contextual signs and less responsive to dispositional signs, compared to individualists. Our argument was based on consistent East–West differences in self-construal, rela-

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tional schemas, implicit theories of agency, and attribution processes. Our two-culture comparison lends partial support to these predictions. We show that Japanese trustors are significantly more likely than Canadians to rely on contextual signs, and to make situational attributions, when assessing the initial trustworthiness of an unfamiliar trustee. Furthermore, Japanese trustors pay greater attention to relational connections, such that they weight predictability and benevolence more heavily in forming trusting beliefs. Intercultural differences are largely non-significant in the case of dispositional signs, however, they only trigger attributions of ability and integrity in Canada. Dispositional signs are consistently neglected by Japanese trustors. Understanding which signs matter when represents an important first step for suggesting how partners may deliberately foster the emergence of trust in cross-cultural relationships, an area which remains underdeveloped despite its significant theoretical and practical relevance.

Acknowledgments We thank Chris Bell, Rekha Karambayya, Takeshi Hamamura, Darrin Lehman, John Oesch, and Christine Oliver for their constructive suggestions on earlier versions of the manuscript. The paper has greatly benefited from the valuable guidance we received throughout the review process from Associate Editor David Harrison and three anonymous reviewers. Funding for this research was provided by the Social Sciences and Humanities Research Council.

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