The Ability of SMEs to Use Trust in Managing Offshore Activities

Abstract

Small and medium-sized enterprises have found their way into multi-cultural relations to outsource or offshore their business processes. Relationships are built either from an economic or emotional point of view. Our study particularly focused on how SMEs owner/managers build, maintain, and–when necessary–exit their relationships with other SMEs by using trust as a core element. We have chosen for a qualitative research strategy by conducting semi-structured interviews in The Netherlands, Germany, UK, Denmark and Sweden. The countries selected are representatives of the application of Northern-European and Anglo-Saxon business models. Our results suggest that trust is of the essence in the relationship building process and that the perception of trust needs to be understood and managed in multi-cultural relations by all parties involved. We can also conclude from our results that SMEs are intrinsically inclined to base their offshore activities on trust. For practical reasons, partners in relationships need to be educated and trained how to build trust in multi-cultural relations. Future research should focus on the firms’ culture to examine the influence on trustful multi-culture relationships.

Appendix 1

1.1 Pre-questions

• What is your position/role in the company?

• Could you describe briefly your organization, core businesses etc.?

• What kind of services/business functions are offshore outsourced in your company?

• In what extent have you done outsourcing?

  • When have you started offshore outsourcing?

  • How many contracts?

  • What have been the lengths of the contracts?

• What kind of service providers (vendors) you have had?

  • Size?

  • Location?

1.2 Pre-contract Phase

Cognition-based initial trust

Before working together with this service provider:

• We had a good impression of this service provider

• We heard of its good reputation

• We heard of its good ethical standard

• We knew that it treated its clients fairly

Calculative-based initial trust

Before working together with this service provider

• We heard that it usually acts in the interest of its clients

• We knew that it willingly provides assistance to its clients

• We heard that it usually tries to keep to its promises

Psychological initial distrust

Before working together with this service provider:

• We didn’t think it is usually honest with its clients

• We didn’t think it is usually benevolent to its clients

• We didn’t think its employees are usually competent

• We didn’t think its actions are usually predicable

Economical initial distrust

Before working together:

• We heard that it does not usually act in the interest of its clients

• We knew that it unwillingly provides assistance to its clients

• We heard that it does not always try to keep to its promises

1.3 Post-contract Phase

Customer’s mutual trust

After working together with this service provider, we realize:

• It makes beneficial decisions to us under any circumstances

• It is willing to provide assistance to us without exception

• It reliably provides pre-specified support in a contract

• It is honest

• It cares about us

• It is sincere at all times

Explicit knowledge sharing

With this service provider, we share:

• Business proposals and reports

• Business manuals, models and methodologies

• Each other’s success and failure stories

• Business knowledge obtained from newspapers, magazines, journals and television

Implicit knowledge sharing

With this service provider, we share:

• Know-how from work experience

• Each other’s know-where and know-whom

• Expertise obtained from education and training

Outsourcing success

• We have been able to refocus on core business

• We have enhanced out IT competency

• We have increased access to skilled personnel

• We have enhanced economies of scale in human resources

• We have enhanced economies of scale in technological resources

• We have increased control of IS expenses

• We have reduced the risk of technological obsolescence

• We have increased access to key information technologies

• We are satisfied with our overall benefits from outsourcing

Additional open questions:

• Do you think that the central role of owner/manager of SME is crucial for creating trustful relationship with the service provider?

• Do you feel that you have experienced opportunistic behaviour from your service provider?

• If yes, how have you reacted to this opportunistic behaviour?

• How do you see the division of interorganizational trust and interpersonal trust from your organizations point of view?

• Do you think that the creation of interpersonal trust plays more important role than interorganizational trust in successful outsourcing relationship?

• Do you initially feel that building a trustful relationship is easier with a SME service provider than large service provider (or vice versa)?

• In which ways and with which tools you feel trust could be improved in your relationships with the service provider?