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Strategies for the Base-of-the-Pyramid

Becoming trusted at the Base-of-the-Pyramid


Master thesis
M.Sc. in Organization Studies 2007/2008
Tilburg University

Author
Peter Grootveld
ANR: s577220
Tel.: 06 52 30 7700
Email: p.grootveld@uvt.nl

Supervisors
Dr. Patrick A.M. Vermeulen
Prof. Dr. Jac L.A. Geurts

Abstract
Numerous academics and business managers believe that western MNCs can create new markets and
help eradicate poverty at the same time, once they recognize the poorest of our world, the so-called
base of the pyramid (BoP) as novel consumers and innovative producers. To be successful in this
bipartite mission, MNCs are dependent on successful collaboration with local parties in the developing
countries. However, collaboration with western partners is based on other grounds than collaboration
with local parties, often living in remote communities. Trust appears to be the key word in the latter
and BoP literature provides quite some propositions on trust building activities. However, despite the
acknowledgement of the necessity of trust building with local partners, there is no empirical research
specifically aimed at MNCs trust building processes with people in the remote communities. Hence,
this master thesis sets out to explore how western multinational companies build trust with local
communities in developing countries. Departed from present BoP and trust literature this thesis studied
a BoP case in Tanzania and confirmed five variables causing trust: outset manifestation, reciprocity,
consistency, adaptation to institutional framework and communication. Moreover the results of this
thesis show that the relation between the variables and the actual processes that account for the
relationship between the concerning variables are determined by the context of the BoP.

Cooperation is sustained by the shadow of the future (Axelrod, 1984)

Preface
This master thesis presents the results of an inductive research on strategies for the base of the
pyramid. I conducted the preparing and concluding parts of the research at Tilburg University
and the field research in Tanzania. The finished thesis brings along ambivalent feelings. On the
one hand, it means the successful ending of a fruitful period of studying. On the other hand, it
means the end of working on a subject that inspired me increasingly, day after day. However, as
Jac Geurts spoke to me reassuring: its just like a boomerang, it will return to you once again.

The thesis has its origins in the strategy classes of Patrick Vermeulen and Jac Geurts. Their
enthusiastic introduction of the Base of the Pyramid made many hearts beat faster, and Strategies
for the Base of the Pyramid became a very interesting thesis subject. Hence, I want to thank both
Patrick and Jac for their impassionate classes. More specifically, I want to thank Patrick for his
professional supervision. His feedback was always quick, clear and to the point. It was not only
helpful to conduct better research, but also taught me to sharpen my vision in general.

Furthermore I want to thank Harrie Hendrickx from Unilever, who supported me in studying the
Allanblackia case - which was perfect for my thesis - and connected me to the right people. One
of these people was Fidelis Rutatina from NDTL. Fidelis introduced me to the real world of
Allanblackia and to Tanzania in general. He is the best host in Tanzania one could imagine. Next,
I want to thank Godfrey Nkongolo who not only helped me translating the interviews, but also
guided me during the trips across Tanzania.

Of course, I owe the results of this thesis to all the interviewed people. Hence, I thank all the
community members I interviewed and their villager leaders. I also want to thank, Maria and Tom
from FaiDa Mali, Ndanshau from SNV and Doris from ICA. I admire them for their dedicated
work to create a better life for the people in Tanzania.

I am also very grateful to all the people that have read my thesis and thought along with me, with
special thanks for their critical feedback to Michel Bachmann and Chris van der Schoor.

Peter Grootveld
Nijmegen, January 2009

Table of contents
1. INTRODUCTION..................................................................................................... 5
2. THEORETICAL BACKGROUND ........................................................................ 10
2.1 Organizing the trust literature ............................................................................. 10
2.2 Trust defined ....................................................................................................... 11
2.3 Antecedents of trust............................................................................................. 11
2.4 Trust in BoP studies ............................................................................................ 17
2.5 Insights from other studies .................................................................................. 20
2.6 Comparing visions on trust building ................................................................... 21
3. METHODOLOGY.................................................................................................. 24
3.1 Research design................................................................................................... 24
3.2 The case............................................................................................................... 25
3.3 Data collection..................................................................................................... 26
3.4 Data analysis ....................................................................................................... 29
4. RESULTS................................................................................................................ 32
4.1 Introduction ......................................................................................................... 32
4.2 Build trust incrementally..................................................................................... 32
4.2.1 Outset manifestation....................................................................................... 33
4.2.2 Manage reciprocity ........................................................................................ 36
4.3 Consistency ......................................................................................................... 41
4.4 Manage communication ...................................................................................... 42
4.5 Adapt to institutional framework ........................................................................ 44
4.6 An overview of the results & a BoP trust building model .................................. 49
5 DISCUSSION AND CONCLUSION ...................................................................... 51
5.1 Introduction ......................................................................................................... 51
5.2 The suitability of prevailing trust literature......................................................... 54
5.3 Comparison with the BoP literature .................................................................... 55
5.4 Conclusion........................................................................................................... 57
5.5 Limitations .......................................................................................................... 58
5.5 Further research................................................................................................... 59
6 REFERENCES......................................................................................................... 59

1. Introduction
If we stop thinking about the poor as victims or as a burden and start recognizing them as
resilient and creative entrepreneurs and value-conscious consumers, a whole new world of
opportunity will open up. (Prahalad, 2004, p.1).

This proposition is illustrative for the increasing signs of interest in the possibility of doing
business in developing countries and alleviating poverty at the same time.

The websites and annual reports of fortune global-500 companies show that nearly all of them
are to a certain extent serving the poorest of our world, the so-called base of the pyramid
(hereafter: BoP). Wal-Mart, for example, moved into the Mexican retail banking sector.
According to themselves, not only to sell more stuff but also to compete against the
entrenched domestic businesses that are not fulfilling local demand. And as the New York
Times (2006) stated affirmatively: Poorer Mexicans have been largely shut out of
traditional banks by minimum balances, high fees and intimidating paperwork. Community
banks barely exist. Another illustrative example is Unilever. It notifies on its website that
their deep roots and early engagement in BoP markets gave them valuable experience in
meeting the needs of BoP consumers. For instance, one of Unilevers oldest brands is
lifebuoy, once launched in the UK as an affordable soap. Today it is mainly consumed in
BoP countries. Nearly half of the sales take place in rural Asia, where hygiene issues such as
hand washing are of vital importance for whole communities. Another BoP-aware company
is DSM. This multinational proclaims they started three concrete Base of the Pyramid
projects in India this year. According to their website these projects will focus on the topics:
increased production of milk, better nutrition and the development of sustainable construction
materials. Like this, numerous other examples of companies entering the BoP can be found.

Strategies to enter the BoP are also increasingly subject of interest in Academia. In 2002 an
article named the fortune at the bottom of the pyramid caught not only the eye of the corporate
world, but attracted also many scholars of different disciplines. In this article Stuart Hart and
C.K. Prahalad capture the division of the worlds purchasing power parity in a pyramid with
four consumer tiers. They sketch the top tier as a saturated market accommodating about
hundred million people earning more than $20.000 a year. The bottom tier consists of more
than four billion people with an annual per capita income of less than $1500. Thereupon, they

state that although these bottom tier people are poor, they represent an underserved multitrillion dollar market. Hart and Prahalad continue in their article with quashing the prevailing
assumptions why these people should not be seen as potential consumers for western
companies and subsequently they draw attention to a few crucial elements to create a
commercial infrastructure in developing countries. For instance, they assume that the poor can
afford and do have use for the products and services in developed markets and they argue that
it is crucial to pay special attention to improvement of access to these products. Considering
the scholars innovatory train of thought, it is not surprising that many colleagues reacted on
Prahalad and Hart by publishing articles in line with The Fortune at the Bottom of the
Pyramid. Some of them primarily in a critical way (e.g. Jenkins, 2005; Crabtree, 2007;
Karnani, 2007) and others elaborated on Prahalads and Hart s ideas by studying certain
aspects of the BoP proposition, or by approaching it from a specific angle. For example, it is
studied how to create successful business models for entering the BoP (London, 2007; Seelos
& Mair 2007), how corporations and NGOs can partner successfully to learn from each other
(Brugmann & Prahalad, 2007), how a BoP perspective can complement other poverty
reduction programs (London, 2007), alternative perspectives on BoP concept are explored
(Jaiswal, 2007) and there is even a BoP protocol, helping organisations step by step to launch
a BoP venture (Simanis & Hart, 2008).

It seems convincing that the BoP philosophy receives increasing and mainly positive attention
by both academics and business managers. However, it is not all roses in the BoP markets.
Among the high number of organizations that entered the BoP, there are also many examples
of failed initiatives. A typical example is the Word Shoe project of Nike. In its attempt to
supply low priced shoes to the low-income-populations in China, it failed in meeting its sales
goals. According to McDonald et al (2002), Nike was unsuccessful in reaching the target
consumer because its business model was not based on an emphatic understanding of the
context. Stuart Hart (2007) has put forward that if Nike had started with a pre-commercial
period of engagement, deep listening and building trust with local parties, it would have had a
greater chance of being successful in resolving the contradictions between its used business
model and the one required to serve the low-income-populations of China. And even if a BoP
venture seems to have success in the beginning, it can still easily fail to meet its targets. The
detergent product Wheel of Unilevers subsidiary Hindustan Lever Ltd. (HLL) perfectly
illustrates this failure to make a BoP initiative grow. The business model was based on single
serve packaging, low-cost production, and distribution through small local companies.
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Although rapid growing sales figures were visible in the beginning, the business model was
not suitable to reach 500 million potential customers in rural villages. After a few years
HLLs rapid growth began to stagnate. In 2004, the HLL share price ended up in a downward
spiral, and shed over 25 percent within 3 months (Financial Express, 2004). HLL became
aware that it had to integrate deeper into the local communities to reach the 500 million
people. Hence, Project Shakti came into existence: through womens self help groups, HLL
trained thousands of entrepreneurial women in building a local HLL micro-franchise. This
project has resulted in both income creation for the female micro-entrepreneurs and the
possibility of reaching the 500 million previous unreachable customers.

The interested reader has probably considered what might be essential if a MNC wants to be
successful in entering the BoP. Consulting the BoP literature to explore this matter, results in
finding many factors that influence the consolidation in the alien BoP market. London and
Hart (2004) make a fundamental point with respect to becoming successful: Business
strategies that rely on leveraging the strengths of the existing market environment outperform
those that focus on overcoming weaknesses. All of the BoP scholars seem to comply with
the proposition that it is necessary for MNCs to become integrated in the concerning context
and hence they have to collaborate with local governments, local NGOs, local firms and local
individuals. Furthermore, literature suggests that MNCs have to develop a learning process
with the local people in order to create relevant ideas for products or services that the people
really need and to obtain other needed knowledge about the local context. Frequently
mentioned is the importance to have local companies and individuals taking over a part of the
MNCs activities and include them in supply chains. Logically, this creates income generation
in local communities and hence eradicates poverty. And indeed, also the earlier described
examples of BoP initiatives leads one to suspect that involving local communities in BoP
ventures calls for special attention and even determines the success of the venture. Unilever
brings its soap hand in hand with education on hygiene and according its website, it visits
each village several times, engaging all parts of the community, Nike failed because it didnt
engage with the local community and HLL began to meet its objective not before it started to
collaborate intensely with rural women.

It might be clear that collaboration with diverse local parties plays a major role in becoming
successful at the BoP. Consequently, the next question would be: how to collaborate with
local parties in this new market? Also this question is broadly discussed by BoP scholars and
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the ever returning key word in this discussion is trust. For instance, Stuart Hart (2007,
p.213) states: unleasing the wellspring of innovation at the BoP() requires developing a
personal relationship of trust, understanding and respect through which new possibilities for
locally-embedded businesses can emerge. In the same line, his colleague Simanis et al.
(2008) mentions that the corporate team will depend heavily on the trust they have to obtain,
because it will enter the local community as an outsider. Some imminent phrases in BoP
publications attach even more weight to trust because they could have the reader presume
that trust building in a developing country brings along more barriers than just differences in
cultural background. For example, Prahalad (2004, p.20) notices that Both sides- the large
firms and the BoP consumers- have traditionally not trusted each other. The mistrust runs
deep. Private sector firms approaching the BoP market must focus on building trust [}. ,
and Hart (2007, p.213) emphasizes that the key to success in the BoP is trust [] because
the poor are frequently exploited by predatory lenders and unscrupulous vendors.

The importance of collaborating with local partners and the striking statements about trust in
the BoP literature raise undeniable inquisitiveness about the way in which trust is build in the
BoP. Surprisingly, there is no empirical research aimed at a MNCs trust building process with
the people in the remote communities. Statements are mainly conceptual or derived as side
effects from other studies. To the best of my knowledge, not even one of the BoP articles
refers to the mature field of organisational trust research. Trust is, after all, recognized in
several scholarly disciplines as a crucial element in business partnerships. McEvily et al.
(2006) designate various viewpoints. Referring to Arrow (1974) they mention that economics
argue that trust is an essential lubricant necessary for even the simplest forms of economic
exchange. Strategy researchers believe that trust is a strategic resource providing a source of
sustained competitive advantage (Barney & Hansen, 1994) and other organisational
researchers describe trust as a governance form which helps organisations to coordinate its
economic activity (Powell 1990). It could be well conceivable that findings in general trust
research are applicable in BoP ventures and help MNCs to become successful in their mission
to create new markets and eradicate poverty at the same time. Hence, departed from the
mature field of trust research this thesis sets out to explore:

how western multinational companies build trust with local communities in developing
countries.

The importance of trust building is obviously discussed in the BoP literature, but it falls short
when it comes to the actual process of trust building with local partners. Consequently,
answering the research question will contribute to closing this important gap. Besides closing
the gap, it will also hold the proposed methods for launching BoP ventures in general against
the light. An interesting question is if these methods, for instance the ones elaborately
discussed in the BoP protocol by Simanis and Hart (2008), are fostering the trust building
process as well. But there is even more theoretical relevance. Also within the mature field of
trust research is the context of the BoP unknown. Hence, answering the research question will
provide insight in the applicability of the long standing trust antecedents in the context of the
BoP. Then there is the more practical point of view. The outcome of this thesis is valuable for
MNCs in search for the crucial relationship with local people in the yet untapped new market.
It will provide a model that can be used by MNCs as a guideline to build a trusted relationship
with local partners at the BoP.

The theoretical framework will first expound on the mature field of organisational trust
research. Subsequently, the conversely juvenile field of BoP research will be turned inside out
to make an inventory of ideas on trust building living in this academic domain. Also the
literature from the development field and on cross cultural collaborations will be shortly
visited to derive potentially important insights for this thesis.

2. Theoretical background
2.1 Organizing the trust literature
Many interesting but not always convergent streams of trust research have developed among
scholars (Bachmann and Zaheer, 2006). Already for decades, but especially at the moment of
writing (2008), trust in economies is a much discussed topic. Also trust in (groups within)
societies is studied a lot (Bachmann and Zaheer, 2006) and even within organisations trust is
studied on various levels.

Why is trust that interesting to study? It was already discussed in the introduction that trust is
a key factor in collaborations. McEvily et al. (2003) pointed out that economics define trust as
an essential lubricant necessary for all forms of economic exchange, strategy researchers
believe that trust is a strategic resource providing a source of sustained competitive advantage
and other organisational researchers describe trust as a governance form which helps
organisations to coordinate its economic activity. In addition, Larson (1992) claims that trust
reduces the extent of formal contracts needed. Furthermore, trust determines the likelihood of
future cooperation (Williamson, 1993), lowers transaction costs (Gulati, 1995), induces
desirable behaviour (Madhok, 1995) and facilitates dispute resolution (Ring & Van de Ven,
1994). Trust appears to be a broadly discussed concept, so it is important to be clear about the
context in which trust is studied and what is meant by the concept of trust.

This thesis explores how companies can become trusted by people within developing
communities. Hence, this theoretical background will go more deeply into how companies
can become trusted by individuals. However, trust in a company appears to be closely
connected with trust in an individual. For instance, Zaheer et al. (1998) conducted empirical
work on the relationship between trust in a specific individual dealt with, and trust in that
individuals organisation. They found that there is a significant relation between these two
levels of trust. Trust in the organisation is a result of trust in individuals from the concerning
organisation. With respect to this relation, McEvily et al. (2003) found evidence that negative
experience with individuals from a collective have even more impact on the trust in the
concerning organisation. Hence, the focus will be on both trust building between individuals
and between organizations and individuals.

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2.2 Trust defined


According to the ISI web of knowledge it was Morgan and Hunt (1994) who published the
most cited article with respect to organizational trust. They conceptualize trust as existing
when one party has confidence in an exchange partners reliability and integrity (p.23). The
second most cited article is published by Mayer et al (1995). Their definition is more
comprehensive: the willingness of a party to be vulnerable to the actions of another party
based on the expectation that the other will perform a particular action important to the
trustor, irrespective of the ability to monitor or control that other party (p.712). In the
second part of their definition, Mayer et al. explicitly mention the irrespective relation
between trust and the ability to monitor the other party. In this thesis, monitoring is seen as an
important part of trust building. Several scholars claim that the instrumental or functional
value of trust, lies in its power as a risk-coping strategy in social relationships (Koeszegi,
2004) and hence monitoring could be an important part in the concept of trust. Furthermore,
monitoring is also seen as a way to create routine in the contact between partners and also
make parties critically reflect on the partnership. This way adjustments in the relationship can
be made on time (Sabel,1993). Lewicki and Bunker (1995) proclaim that the presence of
monitoring could be a measure to determine the extent of trust. Besides monitoring, there is
another point of attention. There is a difference between plans and actions. In this sense, trust
is found in actions, not in words. Hence, in this thesis trust will be described as the found
willingness of a party to be vulnerable to the actions of another party based on the
expectation that the other will perform a particular action important to the trustor.

2.3 Antecedents of trust


This section will discuss relevant ideas and antecedents of trust, found in prevailing trust
literature.

Incremental trust building and reciprocity


Two of the most often discussed points of interest in the trust literature are reciprocity and
incremental trust building (e.g. Creed & Miles,1996; Johnson et al., 1997; Larson, 1992).

Das & Teng (1998) mention that theorists (e.g. Bowman & Hurry, 1993) propose incremental
resource commitments as the preferred strategy when risk and uncertainty levels are high. In
that sense they note, trust is the accumulation of prior satisfactory experiences (Gulati, 1995;
Luhmann, 1988). Also Burt and Knez (1996) discus trust building as an incremental process.
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Citing Blau (1968, p.454) they summarizes the process as follows: social exchange relations
evolve in a slow process, starting with a minor transaction in which little trust is required
because little risk is involved and in which both partners can prove their trustworthiness. This
enables them to expand the exchange process in their relation and hence, after a certain
period, they can engage in major transactions. Thus, the process of exchange leads to the trust
required for it in a self-governing fashion. Lewicki and Bunker (1995) call this insight in the
behaviour of the trusted partner knowledge-based trust. There is a willingness to rely on the
other person because of direct knowledge about this persons behavior. Knowledge-based trust
is grounded in the predictability knowing the other party sufficiently well so that the others
behavior is anticipatable. Knowledge-based trust relies particularly on information about the
other.

Part of reciprocity is the way in which benefits of a partnership are divided. Das & Teng
(1998) derive insights from Adams (1963) equity theory of motivation. This theory suggest
that people have a strong need to maintain their sense of equity in exchange relationships. In
this context it means that the all parties benefit from the collaboration in accordance with the
amount of resources they bring in. On occasion, this feeling of getting an equal return on
investment can even be more important then maximizing the synergy of the collaboration
(Ring & van de Ven, 1994). At the other side, if there is a high level of trust, partners tend to
be more flexible in getting an unequal share of the collaborations results for a short time.
When there is inequity felt for a longer term, tension will arise and trust will decrease. So, for
successful trust building, profits need to be distributed in an equal manner.

Das & Teng (1998) linked reciprocity also with risk taking. They explain that trust researchers
usually link risk taking with trust to notify that trust leads to risk taking (e.g. Coleman, 1990).
However, from another perspective, Das and Teng suggest that trust and risk taking forms a
reciprocal relationship because risk taking increases the level of trust. When it is visible that
one of the parties within a relationship takes a risk in trusting the other, the other tends to feel
incumbent upon the other to behave in a trustworthy manner. So risk taking is a way to show
one another his trustworthiness. Again, in this technique of trust building, people will not at
once take a lot of risk in the hope that it will cause reciprocal trust from the other party.

When partners get used to each other, they slowly develop a customary way of working. Van
Ees & Bachmann (2006) introduce the concept of extended trust. This form of trust is not
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really build on personal contacts, but is rather grounded in patterns of routines and rules,
which people use to predict their partners future behaviour. This would mean that over time,
trust is not only determined by personal contact and (cultural) similarity of partners, but can
also be based on norms produced by and integrated in an institutional framework (Arrighetti
et al., 1997).

The first steps


Knowing that trust is subject of reciprocity and is build incrementally, doesnt say much about
what a MNC could do when it first enters a remote community in a developing country.
However, the trust literature also proposes ideas about the very beginning of a partnership. To
start with, even without any direct assignable factor, the extent to which a person trust one
another can vary. Mayer et al. (1995) explain this by the difference in peoples propensity to
trust, or in other words, the tendency to which a person will trust another before having any
information. This propensity can differ per person, but is also often dependent on culture.

Das & Teng (1998) suggest a more tangible step to take in order to build a trusted
relationship, namely locating a partner with a good reputation. This might provide the first
piece of evidence to take some initial trust (Barney & Hansen, 1994). Mayer et al. (1995)
suggest that another way of becoming trustworthy is showing your ability. As expounded in
the definition of trust, trusting one another, means being vulnerable to the actions of the other.
The willingness to be vulnerable will partly be determined by the extent to which a party is
really able to fulfil its promises. According to Mayer et al. (1995) this ability depends on the
specific technical skills and competences needed for the situation.

Lewicki & Bunker (1995) describe the whole process of trust building and divide it in phases.
The first phase they distinguish is calculus-based trust. This trust is derived from
consistency of behaviour that leads to expectations that the other party will behave
predictably; this trust could be determined by the perceived costs and benefits from staying in
the relationship vs. the costs and benefits of cheating on the relationship. Calculus-based trust
is sustained through a clear deterrent which is likely to occur if trust is violated.

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Communication
Another, more generic antecedent for trust that is often discussed by trust scholars in varying
ways, is communication. By studying relationships between 204 independent automobile tire
retailers and their suppliers Morgan and Hunt (1994) found, among other factors,
communication as significant antecedent to trust. Communication was defined as the formal
and informal sharing of meaningful and timely information between parties. Also Das & Teng
(1998) suggested communication and information exchange as a point of attention during
trust building. Partners can avoid conflicts by constantly discuss differences. Van Ees &
Bachmann (2006) describe communication as an antecedent to trust in the same way, but
more specifically. They discuss that interpersonal trust builds on frequent face-to-face
contacts. Two arguments endorse this proposition; misplaced trust tends to be low because
information about the potential trustee is available and untrustworthy behaviour can
immediately be sanctioned.

Bacharach and Gambetta (2001) introduce communication from a somewhat different point of
view. They propose that many trust precursors as suggested in the literature indeed influence
the trust in a relationship, but the extent of the effect of the precursor is dependent on the
extent in which the precursor is noticeable to the other party. For instance, a person or
organization can be very capable to carry out certain activities, but the other party must also
be acquainted with this capability. In other words, the performative acts of self-presentations
influence the effect of the trust enablers. Bacharach and Gambetta call the signals that form
the empirical basis from which the trust-giver makes the decision for the first move in the
development of trust manifesta. Hence, communication in the form of manifesta can be seen
as a moderator variable between other precursors and trust. Creed & Miles (1996) describe the
function of communication in a way that perfectly fits in the point made by Bacharach &
Gambetta. They state that communication facilitates the process of proving trustworthiness
and credibility to each other.

Not only communication between the trustor and the trustee influences the trust within a
relationship. Mayer et al. (1995) notice that also the credible communications by others
determines the extent to which a party trust one another.

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Summarized, communication can be seen as an independent variable influencing trust from


various viewpoints. It can also be seen as a moderator variable, determining the impact of
other dependent variables.

Integrity and consistency


The earlier described research by Morgan and Hunt (1994) on independent automobile tire
retailers and their suppliers also pointed out that integrity plays a major role in trust building.
Not surprisingly, they state that opportunistic behaviour lowers the level of trust within a
business relationship. Opportunistic behaviour is adopted from Williamson (1975) and
defined as self-interest seeking with guile. Also Mayer et al. (1995) portray integrity as an
important factor in trust building activities. According to them, integrity is determined by the
consistency in past actions of a person, the credible communications about a person and to
which extent actions are consistent with words. This is also a good example in which one
factor is complementing another. Communication is associated and preceding to integrity.

Norms, values and friendship


When partners share values, they are more committed to the relationship (Morgan & Hunt,
1994). Mayer et al. (1995) portray this commitment as benevolence, determined by the
specific attachment to a person. Also Creed & Miles (1996) recognize this mechanism, but
describe their point a little bit more specifically and appoint characteristic similarity as an
enabler of trust between parties. Special attachment is not only created by existing similarity
but also by adapting to each others norms values and needs. Das & Teng discuss interfirm
adaptation as a trust building technique. Trust is earned from partners if one adapts to the
needs of cooperation in partnerships (Heide & John, 1992). A willingness to do this, even if it
means financial or other concessions, would earn trust from the partner. Consequently,
making adaptations according to the needs of the partner catalyses the process of trust
building. However, an attachment or commitment cannot already exist at first sight. As
discussed before, Lewicki and Bunker (1995) divide the trust building process in several
phases. Trust in the last and most solid phase is called identification-based trust, and is created
because parties develop a social bond with each other based on mutual appreciation of each
others needs. Identification-based trust is also created by having collective identity,
collocation of personnel, creating joint products or goals, and commonly shared values.

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An overview
Trust research has been very popular the last decades. Many research, however, is conducted on
different levels of analysis, from different viewpoints and certainly not as a coherent whole. A
great overlap is visible in the factors that explain how trust is built and many similar concepts are
given a different name. To create an orderly overview of the above described trust literature, and
to gain insight in the overlap, a table with the discussed antecedents is presented below. The trust
building antecedents are divided in five main categories.
Trust antecedents

Authors

Incremental trust building and reciprocity

Experience of reciprocity

Creed & Miles 1996

Prior satisfactory

Gulati, 1995

Longer time positive experiences

Van Ees & Bachmann 2006

Anticipatable behaviour of other

Lewicki & Bunker 1995

Risk taking

Das & Teng 1998

Incremental commitment

Bowman & Hurry, 1993

Slow process of exchange

Equal return on investment

Routine & Rules

Burt and Knez, 1996


Das & Teng 1998
Van Ees & Bachmann

The first steps in trust building

Propensity to trust

Mayer et al. 1995

Locating a partner with a good reputation

Das & Teng 1998

Possibility of deterrence if trust is violated

Lewicki & Bunker 1995

Skills and competences

Mayer et al. 1995

Communication

Communication

Morgan & Hunt 1994, Creed & Miles 1996

Frequent face-to-face contact

Van Ees & Bachmann 2006

Communication and information exchange

Das & Teng 1998

Manifesta (trustworthiness is noticeable)

Bacharach & Gambetta

Credible communications of others

Mayer et al. 1995

Integrity & consistency

Lack of opportunistic behaviour

Morgan & Hunt 1994

Integrity (consistency in behaviour)

Mayer et al. 1995

Norms, values & friendship

Institutional framework

Arrighetti 1997

Shared values

Morgan & Hunt 1994

Benevolence (special attachment)

Mayer et al. 1995

Similarity

Creed & Miles 1996

Social bond because of mutual appreciation

Lewicki & Bunker 1995

Adapt to norms, values and needs of each other

Das & Teng 1998

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2.4 Trust in BoP studies


The BoP phenomenon as discussed in the introduction is a very recent one and literature on
the subject seems to develop increasingly. So far, most of the publications, especially the
earlier ones, are rather prescriptive and normative, i.e. provided information is not profoundly
based on empirical evidence. Trust building practises are mentioned a lot, but largely to
emphasize the importance of it or as a side effect of other practises and not because it is
specifically studied how to build trust. Hence, this part of the theoretical framework is used to
explore ideas and initial findings on trust building in publications about strategies for the BoP.

Already the first article speaking in terms of BoP, the fortune at the bottom of the pyramid
(Prahalad & Hart, 2002), notices the importance of building a personal relationship with the
poor, or as they describe, to build a local base of support . They exemplify this
proposition with the situation in which a sunflower-seed company threatens the existing
power structure within the community by empowering some of the poor involved in the
company. As a result, two of the companies offices were burned and local politicians revolted
against the firms seed business. After investing in the community with training, education and
supply of farm inputs, they improved the relation with the farmers. Nowadays they are seen as
a friend and the political opposition has vanished. With respect to the creation of business
relationships, London & Hart (2004) mention the informal character of BoP economies and
that relationships in informal economies are grounded primarily in social, not legal contracts.
Informal, social boundaries often dominate over formal legal documentation they continue,
and hence trust cannot be obtained by having the backup of enforceable legal systems.
Consequently, insight in social infrastructures is necessary to successfully operate in this
business environment.

By interviewing MNC managers from four multinationals involved in BoP market entry,
London & Hart discovered that western companies can receive legitimacy of local people by
collaborating with non-traditional parties or people. Seelos and Mair (2007) emphasize the
value of collaborating with trustable partners by discussing a case in which the Norwegian
telecommunications company Telenor partnered up with the Grameen Bank, which was
founded by Muhammad Yunnus, the 2006 Nobel Peace Prize winner. Together they founded
for-profit ventures bearing Grameens name. The objectives of both organisations could be
pursued by this venture. The venture became successful for a greater part thanks to the well
17

know Grameen brand. Other important non-traditional partners are for example the so called
fringe stakeholders (Hart, 2007) like individuals and small companies in local communities.
Based on experiences of organisations like Nike, Shell and the Word Trade Organisation, Hart
& Sharma (2004) state that firms can develop intimacy and trust with fringe stakeholders by
generating complex interactions. Complex interactions are explained as interactions in which
managers from MNCs empathize with diverse and disconfirming perspectives of these
stakeholders and try understand their culture, thought processes and language.

In another BoP related article, Hart and London (2005) explain the success of Grameen Bank
and Honey Care Africa because of their embeddedness in the BoP communities. By building
partnerships from the ground up with local entrepreneurs, NGOs and local governments, they
created a web of trusted connections through which they became integrated in the local
communities. Creating embeddedness takes a lot of time, but brings along the advantage that
it cannot quickly be duplicated by competitors. Also Wheeler et al. (2005) discuss the
importance of a trust-based, densely networked environment. According to their examination
of 50 case studies, it are the development organisations who can act as catalysts for these
partnership opportunities by convening dialogues between local and international businesses.
Arnould & Mohr (2005) go more deeply into the functioning of embedded ties. Natural
channels in BoP markets are embedded in relationships and networks. For being successful at
the BoP, they contend, its critical to create an understanding of the embedded ties in a
community and to cultivate and mobilize them. They state that trust in these networks is often
produced by culturally specific, familial, ethnic and religious ties. When a dominant actor is
granted decision-making authority on behalf of the community, it is likely that he has
developed the ability to mobilize the embedded relationships and norms. In addition, Stuart
Hart (2007) mentions the importance of avoiding a short-term commercial agenda. He
underpins this statement with an example of Cemex. In order to find possibilities for a home
building business in Mexico, Cemex managers had to live in shantytowns for six months. One
of the managers said they had to remove the cement chip from their brains which led to
unanticipated insight in how they could serve the real needs of the communities. This, in
combination with the long term stay created the crucial trust with the local people. Finally
BoP ventures become trusted over time, when the (financial) outcomes are felt by the ventures
local partners and the community in which it operates (London, 2007).

18

It appears that the BoP literature contains quite some ideas about how trust is built with local
people in communities of developing countries. The table below shows a summary of the
salient catalysts appointed by BoP scholars.

Contention on trust building

Author

Invest in the relationships by providing training, education and

Prahalad, 2004

farm inputs

Create insight in, and use social infrastructures, often

London & Hart, 2004; Arnould & Mohr, 2005

determined by culturally specific, familial, ethnic and religious


ties

Become related with trustable people or brands

London & Hart, 2004; Seelos & Mair, 2007

Create complex interactions by empathizing with diverse and

Hart & Sharma, 2004

disconfirming perspectives local people and try to understand


their culture, thought processes and language

Take the time to create a web trusted connections by building

Hart & London, 2005

partnerships from the ground up with local entrepreneurs

Avoid short-time commercial agendas

Hart, 2007

Have the local people feel the financial outcomes

London, 2007

The above listed trust building activities are put forward by academics based on their general
studies on BoP phenomena without departing from prevailing trust literature. However,
prevailing trust research could contain many trust enabling factors which are also relevant for
companies entering the BoP market.

19

2.5 Insights from development studies and research on cross-cultural collaboration


Non-governmental organisations have many experience with building trust in the concerning
context. A salient view within the field of development research, which is likely to be useful
for the BoP proposition, is the importance to distinguish formal and informal institutions (i.e.
Leach et al. 1997). Informal institutions are socially embedded and exist because of the shared
acceptance of the actors involved. To become trusted, it is important to anticipate on the
informal institutions. Participatory Rural Appraisal (PRA) is a suitable approach to make use
of informal institutions (Chambers, 1994). Hence, insights from this approach could also be
valuable for private corporations working in local communities. PRA is used for
development projects and programmes and involves the knowledge, opinions and perception
of rural people. Robert Chambers (1994) claims that by using this approach, rural people are
more willing to collaborate and provide high valid and reliable information. He puts forward
the following shifts in mechanisms to achieve the pursued collaboration: from etic to emic,
closed to open, individual to group, verbal to visual, measuring to comparing, and from
extracting information to empowering local analysts.

Next to the lesson from development studies, insights can be derived from research on cross
cultural collaboration between private corporations. Although dealing with a corporation is
different that dealing with an individual or a community, there is some similarity with respect
to overcoming cultural differences.

Child and Faulkner (1998), discuss that there is more risk and uncertainty involved in
collaborations between parties with a different nationality. Cross-national differences between
partner firms with respect to culture, law, politics, and trade policy give trust an extra
important, but also fragile role in the collaboration (Child and Faulkner,1998). Cultural
barriers obstruct initial trust building because (potential) partners are less able to rely on
interpersonal similarity, common background and experience. These obstruct the contribution
to the mutual attraction and the willingness to work together (Mayer et al., 1995).

Other research shows that the precursors of trust as described earlier, are applicable in
different cultures, but the extent to which factors influence trust differ across cultures. For
example, Schoorman et al. (2007) argues that task-oriented cultures as found in European
countries, seem to have a high initial trust of strangers and therefore a high propensity to

20

trust. Conversely, relationship-oriented cultures, like in African countries, need time to


develop a relationship prior to working on the task.

It turns out that cultural differences obstruct trust building and hence a more specific approach
is needed in the concerning context. There are several studies that show how parties in crosscultural collaborations can overcome these barriers in general. For example, Johnson et al.
(1997) studied trust enablers in an international cooperative alliance between Japanese and
U.S. partners and found significant trust enablers. They state that transactions crossing
cultural boundaries are calling for cultural sensitivity which is the firms awareness of
cultural differences and the ability to manage them. This statement was based on research of
several scholars in several types of relationships (e.g. Johnson et al., 1997). So, in addition to
the already discussed interfirm adaption of Das & Teng (1998) a partner must not only
invest money, managerial effort and time in creating an understanding of the partner's needs,
but also in understanding and managing its culture. Cultural sensitivity depends on the ability
to relate to cultural counterparts and colleagues, the understanding of the other culture, the
ability to adapt, received sensitivity training, and the willingness to communicate and make
relationships in the other culture. Johnson et al. (1997) found the lack of cultural adjustment
as a major reason for failed cross cultural collaborations.

2.6 Comparing visions on trust building


The literature on BoP, development and cross cultural collaboration shows similar ideas about
trust building, but often on studied within different contexts, on different levels or formulated
in different ways. However, these ideas can be subdivided into the categories of antecedents
as found in the general trust literature. In other words, lifting these ideas to a more abstract
level of observation, make them fit almost perfectly within the findings of the prevailing trust
research. By doing this, it is subsequently possible to discover if specific antecedents from the
trust literature are more popular within the BoP and related fields than others. If this is the
case, it will possible to discuss the findings of this thesis more precisely in the light of the
studied literature. The tables on the next page present how this subdivision can be made.

21

BoP literature

Trust literature

Invest in relationships by providing training,

Incremental trust building and reciprocity

Education and farm inputs.

- Longer time positive experiences


- Risk taking
- Incremental commitment
- Slow process of exchange

Create insight in, and use social infrastructures, often


determined by culturally specific, familial, ethnic and

Norms, values and friendship


- adapt to norms, values and needs of partner,

religious ties.
Become related with trustable people or brands.

integrate in institutional framework


The first steps in trust building
Locate a partner with a good reputation

Create complex interactions by emphasizing with

Communication

diverse and disconfirming perspectives of local people

- communication and information exchange

and try to understand their culture, thought processes

- frequent face to face contact

and language.
Take the time to create a web of trusted connections
by building partnerships from the ground up with local
entrepreneurs.

Incremental trust building and reciprocity


- incremental commitment
Norms, values and friendship
- adapt to norms, values and needs of each other
- create social bond because of mutual
appreciation

Avoid short-time commercial agendas.

Incremental trust building and reciprocity


- longer time positive experience
- slow process of exchange
- incremental commitment

Have local people feel the outcomes.

Incremental trust building and reciprocity


- equal return on investment

Development literature

Trust literature

Anticipate on informal institutions.

Norms, values and friendship


-

adapt to norms, values and needs of partner,


integrate in institutional framework

Involve knowledge opinions and perception of rural


people: from etic to emic, closed to open, individual

Norms, values and friendship


-

integrate in institutional framework

to group, verbal to visual, measuring to comparing,


and from extracting information to empowering local
analysts.

adapt to norms, values and needs of partner,

Communication
-

communication and information exchange

frequent face to face contact

22

Cross cultural collaborations literature

Trust literature

The extent to which factors influence trust differ

Norms, values and friendship

across cultures.

adapt to norms, values and needs of partner,


integrate in institutional framework

Transactions crossing cultural boundaries are calling


for cultural sensitivity which is the firms awareness

Norms, values and friendship


-

of cultural differences and the ability to manage them.


Cultural sensitivity depends on the ability to relate to

adapt to norms, values and needs of partner,


integrate in institutional framework

Norms, values and friendship

cultural counterparts and colleagues, the

adapt to norms, values and needs of partner

understanding of the other culture, the ability to adapt,

benevolence (special attachment), integrate

received sensitivity training, and the willingness to


communicate and make relationships in the other
culture.

in institutional framework
Communication
-

communication and information exchange

frequent face to face contact

The three discussed disciplines show an apparent conformity to the importance to adapt to
norms values and needs and the necessity to integrate in the institutional framework of the
(potential) partner. Also communication is mentioned a lot as an essential factor. It will be
interesting to study if these factors also stand out in practise. The absence of many other trust
enablers mentioned in the general trust literature, does not mean that those factors are not
applicable in BoP ventures. Hence, the next chapter will describe the used methodology,
departed from, but not bounded to the factors stood out in the tables above.

23

3. Methodology
3.1 Research design
The introduction and theoretical framework pointed out that trust building in the context of
the BoP is a relatively new phenomenon. According to Eisenhardt (1989), a qualitative case
study is appropriate to understand relationships between variables within an unknown context.
Also George & Bennett (2005) state that an unfamiliar context requires a detailed
consideration of contextual factors, which is extremely difficult to do in statistical studies, but
is common in case study. Consequently, to inductively identify causal paths and potentially
new variables, a heuristic case study approach is chosen to explore trust building processes
in the BoP (George & Bennett, 2005, p.75). Since the amount of time was limited and suitable
cases to study were not proximate, a single-case research design is used to conduct the
research. The theoretical framework provided potentially suitable concepts which could be
useful to guide the research. Hence, methodological insights are derived from the grounded
theory approach (Glaser & Strauss, 1967). Grounded theorists, do not construct theory by
testing hypothesis, but have theory slowly emerge by creating an interplay between data
collection and analysis (Charmaz, 2006). Data collection is often started by using sensitizing
concepts. Charmaz (2006) states that these concepts give you initial ideas to pursue and
sensitize you to ask particular kind of questions about your topic. In this thesis, the trust
antecedents on page 16 are used as sensitizing concepts and are used to determine the initial
interview questions. The section about data collection shows examples of the initial interview
questions.

The selection of the studied case is based on two kinds of criteria. The first kind are criteria to
select a genuine BoP case. Hence, this thesis used a case that meets the criteria of the BoP-asproducer venture, as described by Ted London (2007): a scalable profit-oriented venture,
operating in the informal economy, catalyzed by external participation and co-created with
those at the BoP, that connect BoP producers of goods and services to non-local markets.
The second kind of criteria had to indicate that there is a relationship of trust between the
MNC and the local people within the BoP communities. The definition of trust, as outlined in
the theoretical framework (p.11) is used to determine the actual presence of trust in the case.
This means that the local people had to be willing to be vulnerable to the actions of Unilever
based on the expectation that Unilever would perform a particular action important to the
local parties. The next section provides an elaborated case description.

24

3.2 The case


About ten years ago a Dutch Unilever manager re-discovered an edible oil that could be
abstracted from the nuts of the African Allanblackia tree. After profound research in the
laboratory, it seemed that the oil from this Allanblackia nut had very good characteristics for
soap, shampoo, butter and all kind of other products produced by Unilever. However,
Unilever found that this Allanblackia tree only grows in difficult passable areas in African
countries and was therefore hard to obtain. Hence, it was decided to developed supply chains
for this oil, in which they would collaborate closely with the people in the remote areas where
the Allanblackia tree grows. In first instance to have them collect, dry and sell the nuts, but
nowadays also to manage nurseries where techniques are explored on how to grow the
Allanblackia tree as quick as possible. In the near future, farmers in the communities will
have the Allanblackia tree as a new crop on their farm land. Unilever has the advantage that it
has offices all around the world. Therefore it was possible to involve Tanzanian Unilever
people in the Allanblackia activities in Tanzania. Next to it, Unilevers strategy is to organize
supply chains in a sustainable manner, which means that activities should not have a negative
impact on people or the environment. Consequently, one of the first steps taken was the
involvement of the international NGO called SNV. SNV worked with communities through
local NGOs and defines its task as connecting peoples capacities. In this situation it meant
that SNV deployed several NGOs to reach the communities located in the areas where
Allanblackia trees grow. Unilever also involved a NGO that promotes the conservation of the
forests in Tanzania and is connected to the government, to cover that side of the picture. As a
synergetic team, communities were approached and local people were moved to create the
supply chain. These local people received trainings on all kind of subjects. The trainings were
related to Allanblackia, but also to other, more general business subjects. At this very moment
in Tanzania, the Allanblackia supply chain is managed and executed solely by Tanzanian
people. The supply chain is beneficial to all parties. At the one side, it creates businesses for
people in remote villages and hence eradicates poverty in the poor African countries. At the
other side, it creates an efficient way for Unilever to obtain the oil that is very useful for them.
This thesis studied the way in which this supply chain was created in Tanzania in order to
obtain a clear understanding in which way Unilever managed to build trust in local
communities.

25

3.3 Data collection


To acquire a comprehensive insight in the trust building process in the Allanblackia case,
several involved parties are interviewed. At the one side, Unilever representatives and the
NGOs are interviewed to discover the used strategy to create willingness to collaborate among
the villagers. In addition, several relevant documents are collected. At the other side, the
villagers and their leaders are interviewed to see how the strategy defined by Unilever and the
NGOs is received in the villages. As it comes to building theory from case studies, purposive
sampling is preferred rather than random (Eisenhardt, 1989). Hence, interviewees from the
villages are selected based on the criteria (a) location, (b) role in the project, (c) years
involved and (d) gender. The interviews, together with the documents provided a broad view
on the trust building process.

The following data was collected:


 12 interviews with villagers who supply Allanblackia nuts or manage nurseries
o Villagers are selectively sampled to secure variety in gender and village
 2 interviews with village leaders
 4 interviews with NGO representatives
 1 interview with the Tanzanian Allanblackia manager
 1 interview with the Dutch Allanblackia manager
 1 memorandum of understanding between Unilever and their Tanzanian country
partners
 1 report of mobilization visits of Unilever and NGOs made in the villages
 1 Allanblackia local market survey report
 1 annual report of the strategic partners
 2 minutes of strategic meetings
The interviews were semi structured. The first questions were aimed on discovering if trust
was really present in the relationship by compare relationship aspects with the trust definition
as derived from the literature: the found willingness of a party to be vulnerable to the actions
of another party based on the expectation that the other will perform a particular action
important to the trustor. Hence, the first questions were about the way in which village
members turned out to be vulnerable to the actions of Unilever and what particular action
Unilever would perform that was important to them. All interviewed villagers mentioned the

26

investment of time and efforts as the factors that made them vulnerable. Creating a new
source of income was mentioned as the action that was important to them.

Following Charmaz (2006), sensitizing concepts were used to determine the subsequent
questions. Hence, interviewees were asked in which way they experienced:
 The first steps Unilever took to approach them
 Unilevers adaptation to their norms, values and friendship
 the communication by Unilever
 Unilevers integrity and consistency
 the increase of Unilevers and their own investments in the relationship
Furthermore, interviewees were asked about factors in general that made them willing to
collaborate with the Allanblackia project. The text box below shows four random examples of
questions based on the sensitizing concepts.
Do you think that Unilever has the right skills and competences to do what they promised?
-

Which skills and competences are needed?

Can you name specific situations in which Unilever showed these skills and competences?

How did your opinion about the skills and competences of Unilever evolved? What particular things
happened that it evolved like that?

Do you feel connected with Unilever because you have shared values?
-

If so, which shared values?

Do you think this is important?

Can you give me some specific examples in which Unilever showed these values?

How did these shared values evolved? What particular things happened that it evolved like that?

Do you feel connected with Unilever because of friendship?


-

If so, how was this friendship created? If not how could this friendship be created

Do you think its important to have a friendship?

Can you give me some specific examples in which Unilever showed this friendship?

How did your friendship with Unilever evolved? What particular things happened that it evolved like that?

Have their been persons in you acquaintances that had an influence on your decision to collaborate
with Unilever/party like family, friend, village members etc.?
-

How important is the opinion of these persons, like family, friends, village members, etc in making your
decision to collaborate?

Are there particular persons in your acquaintances whos opinion is of special importance to you?

What would you have done if this persons recommended you not to collaborate with Unilever?

27

Conducting the interviews

28

The 12 interviewed villagers and the 2 village leaders did not understand English. Therefore,
interviews were conducted in association with a translator. During these 14 interviews,
questions were asked in English and directly translated into Swahili. Next, answers were
given in Swahili and translated back into English directly. To secure the proper interpretation
of the questions by the translator, the questions were first translated on paper from English to
Swahili by the translator and subsequently cross-checked by the Tanzanian country manager.
The other interviews with the 4 NGOs and the Tanzanian country manager are conducted in
English and the interview with the global Allanblackia manager is conducted in Dutch.

The context in Tanzania is very different from the west, both the physical environment and
the cultural aspects. By living with Tanzanian people it became easier to understand the
communities taken-for-granded assumptions and rules and hence could give a better
understanding of the case (Charmaz, 2006). In analyzing the results, this information is used
to shape the idea of the context where necessary.

3.4 Data analysis


Grounded theory suggests to start analyzing data already during the period of data collection.
Hence, during the first period of interviews, data was analyzed to refine the sensitizing
concepts, but also to discover the underlying actions that Unilever took to build trust. For
example, already the first interviewees mentioned the important role of the country executive
team in the trust building process and. Consequently, questions about the role of this team
were added to the interviews. Furthermore, the data was analysed to discover leads to other
relevant units of observation. For instance, during the interviews with villagers, it appeared
that the village leaders played an essential role in the trust building process. Therefore, it was
necessary to organize interviews with some of the village leaders. Refining the sensitizing
concepts during the period of interviewing resulted in the following concepts:
 Strategic intentions (of Unilever)
 Forming of a country executive team
 Research on economic, political and social situation
 Trust building in the communities
 Communication

29

In the end, it resulted in more that 17 hours of interviewing with 20 different people (see list
in paragraph 3.3). All these interviews were digitally taped with a memo recorder.
Subsequently, the recorded interviews are transcribed with an application called F4.

To bring meaning to the data, all transcribed interviews and the obtrusive data were analyzed
with Atlas.ti. The concepts described above are not used during the coding process. This
could have obstructed the open attitude towards the data and neglected important information
about Unilevers actual activities that cause trust building processes. Hence, an initial coding
process as suggested by Charmaz (2006, p.47) was used. The objective was to reduce the data
by deriving the processes and activities that Unilever used to build trust. To achieve this, data
was coded incident to incident (Charmaz, 2006, p.53) by looking for and preserving actions
from all parties involved in the Allanblackia project. This part of the coding process resulted
in 330 quotations coded with 46 different codes. Next, to determine the adequacy of these
codes, a focussed coding process is carried out (Charmaz, 2006, p.57). The trust codes
appeared to have a fairly great overlap and interconnection. Hence, the 46 codes were reduced
to 14 codes that made the most analytic sense. In some cases this meant that a group initial
codes fit in another initial code and in other cases a new focussed code was made to embrace
a group of initial codes. The 14 focussed codes are formulated as mechanisms. The concept
mechanism is derived from Campbell (2005), who explains mechanisms as the processes
that account for causal relationships among variables. Mechanisms are the nuts, bolts, cogs,
and wheels that link causes with effects. An example of a mechanism that emerged from the
focussed coding process is manage transparent communication.

The formulated mechanisms were, however, no isolated factors that caused the trust
separately. The interconnection between the mechanisms and the temporal ordering played an
important role in the process of trust building. Hence, a theoretical coding process (Charmaz,
2006, p.63) is used to specify the relationships between the mechanisms. This resulted in
ordering the mechanisms on a theoretical, higher level of abstraction. The mechanisms are
subdivided into theoretical variables based on higher level consequences and temporal
ordering. The next page shows an example of the coding process.

30

Quotation (330)

First code
(46)

Mechanism
(14)

Theoretical
Variable (5)

First good communication among the actors, frequently


communication, you have to communicate, you have to continue
communication, communication is a key. If you stop
communicating you then you start raising suspicion and probably
people will start moving their own direction
Communicate
Yes, you build that personal relationship. Fidelis was very

clear and

respectful, listening to them, even if they were talking about things

constantly

that didn't had a connection to AB in any sense, he listened and


consulted and tell them something. And if he knew he couldn't do
what they asked, he will tell them: I'm sorry. Say the truth. Its so
important, its a very simple rule in everyday life, but companies
dont do it. They make promises they cant fulfil.
Transparent
communication

A part from all this, the farmers trust is gained during gross margin

Communication

analysis. For them to understand the business idea, are we making a


profit or not. So showed them the costing, this is about making it
clear, about showing them there is money here. You can get some
money, this is about the company getting up in that huge meeting
and talking about the contract, and discussing, they dialog, and the
most important: the company must not default

Create
insight

Because you just tell them: this is how the AB seeds are being sold

in the

at the international market, this is the costs which are involved,

project

transporting it from here to Netherlands, and this is the costs which


is involved in processing it to be an edible oil, and this is how its
going to be sold. By then it was a sort of estimation, it was a future
thing but it was an investment. You're not selling anything, you're
not bringing anything it was money being used to develop the
supply chain. So it was very transparent right from the beginning,
farmers were told, this is how much is going to be paid and then,
because these seeds were not being sold at all. Now I remember the
first place, when we came in people got 150 shillings per kilo. But
that has just been increasing, now its 250. So the farmers are like, if
they believe in you, and they see there is no hidden agenda, I think
they dont have a problem with working with anybody

31

4. Results
4.1 Introduction
The process of trust building took and still takes place in different phases, on different levels,
and in different ways. This widespread existence of trust indicates that trust building starts
already before the beginning of a BoP venture, and continues to be interwoven in all details of
the relationship as long as it last. The next paragraphs discuss five factors that influenced the
trust building process and their specific role. Three of the factors are recognized as
independent variables, one factor as a moderator variable and one factor as both an
independent and moderator variable. Furthermore, the accompanying mechanisms that
account for relationships among the trust building factors and trust itself are discussed.

4.2 Build trust incrementally


Our relationship is more than a business relationship, because they know us and they trust
us. That trust has taken years to build.

This quote of the Dutch Allanblackia manager characterises the importance of building trust
in an incremental way. Unilever experienced that people increased their trust bit by bit and
scheduled the first year to build trust. In the beginning just a few people in the villages
decided to collaborate. In general the villagers first wanted to see what happened. Hence, they
started to put little efforts in the project and once they experienced the returns of Unilever,
they started to put more and more efforts in it. The company have to be aware of the
importance of building trust incrementally even before starting the project, because the
strategic intentions influence the whole process for as long as it last. The quotes in the table
below reflect the experiences of the people involved in the Allanblackia project and endorse
the incremental way in which trust is build.

Incremental trust building


Dutch

they wont invest a lot of time and effort when youre coming by the first or the second time, or

Allanblackia

ever the third time. They first want to see if theres really money, if the weighting is done in an

manager

honest way and that sort of things. They first start with collecting a few seeds, like one kilo, and
after that they collect another kilo, and then the see they get their money and they decide to
collect a little bit more next time. Like that is slowly increases

already in the beginning it was clear that we wanted a long term relationship, and this is
something that shines through in all behaviour, things that you say but also what you expect

32

from others. Sometimes we invested almost a year in a community group before they started
collecting or selling the nuts. We could do this because Unilever had a lot of money to pump
into the project, so actually this was a luxurious position, a small company could never have
done this.
Villagers

to collaborate with a person you first need to know the person, so it took us a while before we
came to know that these people have a good intention

he came here three times and he was still talking about the same thing, and thats why we
thought, this man is serious, he will help us
NGO

there are always the early adaptors, you dont miss them anywhere

Interviews showed that incremental trust building can be divided in two factors, with the
characteristics of independent variables. The first factor to create the necessary base for trust
building is the outset manifestation. This relates to the first impression Unilever made with
the communities they approached. Some essential steps in making the first contacts, created a
trusted atmosphere for building a structural relationship. The second factor is reciprocity. This
means that the parties experienced that both sides invested in the relationship. The following
paragraphs will elaborate on both components of incremental trust building and explain the
actual mechanisms used by Unilever that caused trust.

4.2.1 Outset manifestation


Although trust is build incrementally and investments in the relationship increase over time,
there have to be some first steps to get the process going. In Unilevers case there were some
clear steps that started the trust building process in a fruitful manner. Being aware that the
first impression matters a lot might sound obvious. However, it might be more excessively
relevant as one could expect. People in the Tanzanian communities are very open to new
ideas, especially if it is in their favour, but if the first impression offends them, it will be very
hard to come back ever again. The Tanzanian Allanblackia manager explains it as follows:
it is about the first impression, because if you mess up during the first contact, youre ruin the whole
thing

And one of the NGO people tells:


The first impression matters, you have to meet the village leadership and sit down and talk with them
about your plan. If the objective is benefiting them, then it is fine and youre most welcome

33

Unilever used three mechanisms to manifest in a trustable manner at the very outset, namely:
collaborating with trusted parties, showing skills and competences in a practical way and
writing of agreements.

Mechanism 1: Collaboration with trusted parties


The Tanzanian villages were approached through their village leadership, which means that
the approach of a new village started with a meeting with the village leadership to explain the
ideas. Hence, collaboration with trusted persons concerns first of all the parties that are
present at the first meeting with the village leadership. Locally active NGOs are a often a
trusted party in this meetings, but also the presence of government representatives from the
district-level and parties responsible for conserving the communities environment provided
confidence about Unilevers intentions. However, for approaching the villagers themselves, it
were obviously the village leaders who played the role of trusted person. Without the village
leaders involvement in approaching the villagers, Unilever would not have been able to create
a relationship with the villagers at all. Next to the village leaders, it appeared very important
to acknowledge other authority within a village as well. Due to the democratic system in the
villages, it were for example the elders (older people within a village) who also had a great
influence on the decision to collaborate. Even when the first contact is made and the project
structure is shaped it is important to keep the trusted-person-principle in mind. Village
members who are responsible for management tasks within the project have to be trusted. For
instance, one person within a community is democratically appointed as a clerk and is
responsible for the central collection and payments of the nuts. In one of the communities,
farmers mentioned that they didnt trust this person, which indirectly influenced the
relationship with Unilever. The quotes below, typically point out the importance of
collaboration with trusted parties.

Outset manifestation: collaborate with trusted parties


NGOs

so normally there is this tendency of believing that private organisations are always for
maximizing their profits. Then how are they sure that farmers are not going to be exploited?
Thats why we have the NGOs in the partnership, these are civil society organisations, whom
theyll believe will be there for the benefits of the village members

we went with the representative from the forest conservation so we were even more trustable,
the guy was already walking with the communities on tree planting so they knew his face
Villagers

After Novella talked to the leadership, the leadership talked to the villagers. They told that the

34

people from Allanblackia had very good ideas, so after that we decided to cooperate, to work
with Novella. The leadership of this village influenced our decision

when they came here, they first met our elders and they started to discuss it with our elders,
before they came directly to us. And even the village government itself depends on the elders.
First you have to get the ideas from the elders before you do anything

we distrust the clerk, because he is always giving the prices [won as part of the AB project] to
his relatives

Mechanism 2: Showing skills and competences in a practical way


Another important mechanism with respect to outset manifestation, is showing you have the
right skills and competences to be able to do what you promise. However, the criteria
villagers use to determine skills and competences are of a more practical nature than most
western companies are used to. In a western society, trust in skills and competences is to be
found in the name of a company, in a rsum or portfolio or through references. People in the
communities just want to see some practical examples. The following quote of the Dutch
Allanblackia manager sketches the idea:
you dont show them your CV or references, but for example bring a Blueband packet and say, you see
who is manufacturing that? Its Unilever.

Besides, people within the concerning remote communities want to feel that this alien large
company knows how to handle and dont like it if you tell them you dont know something.

Outset manifestation: show skills and competences


Dutch

you need to know what you want and you need to have knowledge and experience. In the

Allanblackia

Netherlands its sometimes respected to say, I dont know but lets find out together. Well, that

manager

is an attitude they dont like in the communities

Villagers

you have to know the capability of the person first, and then you create friendship to work
together, I can not being friends with you if I dont know your behaviour

And even after they produced the oil, they came back with a sample, so they are showing the
oil that is produced from the nuts

35

Mechanism 3: Writing of agreements


The third mechanism to create a sound outset for building trust, is the writing of agreements.
In principle, legal agreements for this kind of business in Tanzania are useless. However,
agreements play a very important role in another way. Although legal enforcement of
contracts is barely possible, people within the communities see it as an important
confirmation of the understandings, especially when trusted parties endorse the written
agreements. Unilever signed agreements with the leadership of the villages. The agreements
contains what the farmers are committing themselves to do, and what the company is
committing itself to do. The local NGOs are facilitating these contracts and are also seen as a
witness, because of their trusted capacity. So, although agreements arent legally relevant,
they do function as a commitment to one another, especially when it is witnessed by a trusted
party.

Outset manifestation: write agreements endorsed by trusted parties


Dutch Allanblackia manager

people from the village cant get Unilever to court


efficiently, and Unilever doesnt feel like proceeding
against people from those villages

Village leader

we have agreed to work consistently, we have to see


consistency from the Novella people, and they have to
see consistency from the leadership

4.2.2 Reciprocity
The second factor under the umbrella of incremental trust building is reciprocity. This means
that parties within a relationship act in a cooperative way because the other party shows
cooperation as well. In other words, trust itself causes more trust over time. It is already
discussed that this process starts with little investments and extend based on previous positive
experiences about the other parties behaviour. Unilever influenced this process by using four
mechanisms: Invest constant and structural in relationships, make the project community
property, do what you promise and have periodical evaluations.

Mechanism 1: Invest constant and structural in relationships


The first mechanism is investing on a constant and structural base in both the professional
relationships and the personal relationships. In this way, Unilever and its partners did not only
develop the villagers to work with Allanblackia, but also showed a great deal of devotion. The
36

Allanblackia project is investing in the communities in several ways. They are taking care of
community development, training the farmers in business skills, forming individuals in
groups to make them a legal entity and several other things. To make the Allanblackia project
even more living in the village, all kind of activities were organised. For example, individual
villagers and whole villages can win prices for collecting the most nuts. Villagers in the
concerning communities are very grateful to Unilever because of this investment. The story
below, told by an involved villager is a typical example of how the investment in professional
and personal relations is received:
you know, before this we were ignorant, we didnt have any knowledge, so this company came and
started to educate us. When you are doing the job, you have to calculate the costs, costs of farming, of
taking care of the farm, of harvesting and finally you know the total costs. When you are selling you
know if you can get profits or not. And they also told us about gender. Now we are living with our wives
without fighting and we even share what we have at the house. They told us to live in equity with our
wives. For example myself, I sold the nuts and told my wife how much, and we decided together to buy a
cow, and now we have a cow.

The following table shows endorsing quotes with respect to investment in relationships:

Reciprocity: invest constantly and structural in professional and personal relationships


Villagers

I couldnt invest the same amount of time Im investing now because I didnt really had a
picture of what was going on. But now, also because they have trained us and gave seminars we
are aware of what is going on. But before, I couldnt invest that much

they succeeded in creating friendship because they have been visiting us so frequently

First I had some doubts, but when they were coming so frequently and gave the seminars and
kept on explaining everything, all the doubts were gone

according to our society, its very important to create friendship with people and spend time
with them because they do not have knowledge. You have to keep close to them and keep raising
awareness. Collaboration couldnt be possible without that kind of friendship creation

they came here and started to create a friendship, and they told the village leadership that for
every kilo Allanblackia, 50 shilling goes directly to village development

I trusted them because they came here and spend all their time and energy for the whole week
so I thought, theyre serious, there was even a great manager who came all the way from

37

Europe to do this thing here


NGOs

we brought some presents, thats how we make it, so thats a kind of bond, its good in Africa.
If you dont do that in a partnership, they think, okay, my organisation is in there, but as an
individual they dont really care about me

of course its all trust building, the more you interact, the more you teach them new skills, they
will trust you more, they know you better, they are gaining a lot of insight in business, in group
formation, we teach them on contracts and on negotiating, so its a whole process, for years

physical presence is very important, you have to keep on visiting, you have to be there for them,
we even have an office in Muheza [one of the districts].
Dutch

the farmers value the relationship much higher than the money. They are not willing to trade

Allanblackia

with someone unless he behaves like you

manager
Tanzanian

We are there to do more than business. The training were giving them is on the basics, on

Allanblackia

business skills like gros margin analysis and making contracts, its not only applicable to

manager

Allanblackia, its useful for every crop. We also look at the other crops they produce and get
access to markets for that crops, not only Allanblackia

Village

You can even see the competition itself. People are trying to collect more nuts, because the

leader

want to win so they get the prices. It challenges a lot. Last year another village collected 10.000
more nuts than mine, next time I want to beat them

Mechanism 2: Make the project community property


Villagers often seemed to experience that the Allanblackia project is their project and the
company is helping them to manage it. This makes the community members more willing to
collaborate with Unilever. Unilever managed this for example by appointing the responsible
community members in a democratic way. All villagers are involved in these processes. The
table on the page displays relevant quotes related to this mechanism.

Reciprocity: make the project community property


Villager

I trusted them, because they were involving us in every


step

Village leader

in the season we can all engage us in this project,


this makes all of us in the same stream

38

Mechanism 4: do what you promise


A very important mechanism to manage reciprocity is the very simple rule: do what you
promise. All interviewees mentioned this as a important detail that made them trust Unilever.
Be careful with making promises, and if a promise is made, be sure to fulfil it. The following
table provides underlining quotes.

Reciprocity: do what you promise


Villagers

because I heard and saw that other people were working with Allanblackia, and they were
getting what was promised, I thought, okay if other people getting that, I can do it myself as
well

we only trust them because the always do what they promised to do


NGOs

its very important with farmers, because they are easily disappointed. They put their trust on
you and if you dont meet their expectations, they are easily disappointed.

especially farmers, if something fails, youll need a good reason to explain. Because if youre
working together with them, youll need good reasons why something failed, because if you
dont, theyll never trust you again.
Tanzanian

if there was a meeting on a certain date, you have to make sure that youre there, If you agreed

Allanblackia

to bring the cash on a certain day, you need to make sure youre there, if they say they need

manager

bags, you need to buy them and make sure they get them, if you say you are going to open a
nursery or bring the material, make sure you are there.

Mechanism 4: Have periodical evaluations


The last revealed mechanism with respect to reciprocity is having periodical evaluations with
villagers to seek for improvement. If there are grievances and it is discussed, it will disappear
the next season. The farmers find these evaluations very satisfying. The meetings are taken
very serious by all project partners, and are seen as an essential key in their relationship.

Reciprocity: having periodical evaluations


Village

we sit down with the whole district and we do the evaluation, we discuss what went well and

leader

what can improve, farmers, NGOs and the company

Villager

they are coming twice a year to have a big evaluation, and we always give feedback.

Tanzanian

For example in muheza we meet with 75 people. Very big meetings. So each group brings the

Allanblackia

chairman and the secretary and the clerk. And each village brings the village chairman and the

39

manager

village executive officer. You know why, the group leaders we talk about the farmers interests,
the feelings of the farmers. We get that from the group leaders, then the clerk, we talk about
challenges facing by leaking things of the farmers. The village government is first of all
interested in seeing that its economy is increasing, and they also get 5% of the village income
generated by the seeds for development work. so they want the project to be successful. So they
address problems from both areas, they are neutral. They not supporting us, they not support the
farmers, they support the interest of the government. So they make sure that everything is
moving smoothly.

4.3 Consistency
Trust building requires consistency in behaviour. Unilevers consistent behaviour is the third
factor that made them a trustworthy partner to the community members. It appeared to be
particularly important with respect to the way in which villagers are approached by different
project partners. Its already discussed above that it is essential to be consistent by doing what
you promise. Managing consistency in this context is pursued by the use of two very closely
related mechanisms: the consistency in information that is spread in the communities, and
consistency in the external project members who are send to the communities. Because of the
close relatedness of the mechanisms, they are discussed together.

Mechanisms 1 & 2: consistency in information & consistency in the external project


members
A lot of different parties are involved in the project. Consequently, it easily occurs that many
different people are working on the project within the community, which could lead to the
spread of inconsistent or contradicting information. The following story told by a NGO
representative vivifies the importance of consistency:
we saw a paprika linkage break down because they werent consistent in their representatives on the
ground. This company was bringing another representative each year. The farmers didnt like that.
Farmers were already used to a certain way of talking. Now all of a sudden a new person comes in with
new rules and new ideas. When somebody new is coming on board, the old face have to introduce the
new person and keep on for some time. The handling over process should be done carefully

So village members find it disturbing when continuously different project people coming to
the village. External project members have to become known by the village members, and tell
the same story. Consistency also provides the opportunity to have the different partners
function as a synergetic team. Community members mentioned they felt more confident with
40

the project because it was brought by a team which included all relevant parties. In the
Allanblackia project the international development organisation is specialized in partnership
strengthening. Among other things, they are putting the involved parties on the same line by
showing the shared objectives and the dependence on each other. In this case Unilever wanted
to start business in local communities, which make them dependent on NGOs who has to
mobilize the communities. The NGOs objective is to eradicate poverty in the communities,
which happens through the business initiated by Unilever. Furthermore, Unilever benefits
from governmental bodies who are responsible for conserving the forest, but also conduct
research on domestication of Allanblackia trees. These organisations give the company also
legitimacy. In turn the (non-)governmental bodies need money to do research and conserve
the forest, which Unilever can arrange through own funds, but also through external funds. So
all parties can help each other to meet their objectives by dedicating their specialization. The
quotes below underline the importance of working in a consistent way.

Manage consistency in spreading information and external project people


Dutch

it was in Ghana, but actually is not very well anywhere. You have to look through the eyes of

Allanblackia

the farmer. If there is five times somebody from our project walking in, and it is five times

Manager

another person who tells five times a different story, than you will create a totally different
relation compared to when this is five times the same person

Tanzanian

acting like a team is very very important. Because I go there to buy the allanblackia, and find

Allanblackia

the quality is good because there is agreed on the quality with the partner who is responsible for

manager

training the farmers in quality. So when I leave, Faida MaLi is there [local NGO], and when
they leave, TFCG [forest conservation] is there, and the community members know we are one
thing, we are talking about the same thing

I never really interfered in approaching the communities, because the NGOs told which steps
were needed to organize it in a proper way and it indeed seemed to work out in a good way. So
besides I spend some money on it, I had not much interference with it
Villagers

I didnt really knew the organisation, but they came as a group, they gave us trainings and
seminars on all kind of subjects and they came to open new markets for us. Because of that, I
decided to trust them

NGOs

The task of SNV is to bring the organisations together, putting them on the same page and
show them the shared objective, at the individual level, no-one can attain that objective. So we
use action learning and make sure everybody sees each other as an important part of the system,
that you need each other

41

4.4 Manage communication


Communication is a special variable. It turned out that communication itself, irrespective of
the content, causes trust. Having face to face contact on a frequent base, for instance, creates
confidence among partners. But communication has also another role. Communication
influenced the impact of the factors described in the previous paragraphs. For example,
Unilever can collaborate with trusted parties, but the people within the community must
also be acquainted with this collaboration. Hence, communication can be seen as both a
independent variable to trust and a moderator variable between the factors described in the
previous paragraphs and trust. The interviews revealed two interesting trust building
mechanisms resulting from communication. The first is the enormous importance of
transparent communication and the other one is the remarkable influence of mass
communication.

Mechanism 1: Transparent communication


Transparent communication alludes to monitoring the clearness of the project towards
community and manage their expectations. The Allanblackia project was brought with a lot of
clearness and transparency. Already in the very beginning, when Unilever visited the country
executive partners, they communicated in a very open way. This way of working continued
throughout all other phases in the project. All interviewed villagers mentioned that the project
was explained very clearly, including the complete gros margin analysis. This transparent
communication helped to manage the expectations. Therefore, people didnt get disappointed
because they expected to gain more from the project then they really got.

Communication: transparent communication


NGO

we had never worked with a company who was as


transparent as Unilever. The price structure was very
impressive, it was very transparent, nothing was
hidden and we found the price that would be paid to
the farmers very straight

Village leader

we didnt doubt, because during the meeting these


people went into detail, they explained everything
clearly, and all of us, we understood exactly what was
going on in the project. So because they really went
into details, we understand and we trusted them

Villagers

so we knew exactly where we stood

42

Dutch Allanblackia manager

from the very beginning, we tried to be very clear


and very honest about what would be in it for the
farmers. Whats in it for you and whats in it for us?
From the very beginning we have tried to temper the
enthusiasm of getting rich very quickly

Tanzanian Allanblackia manager

we told them exactly what they would get, and we


even tried to lower the expectation. Manage the
expectation, manage the relationship, be honest and
open on your side, give them the chance to ask
questions and answer all questions honesty

Mechanism 2: Use mass communication


The clearness of communication plays a major role in trust building. However, also the
communication channels could influence the trust building process. It seemed to work out
very well to use mass communication. This means hanging advertisements and posters about
the project throughout all the villages and using local radio or television. Besides villagers
perceive mass communication as something that indicates the trustworthiness of a person or
organisation, it is also important that constant messages keep the people being aware of the is
a project. Every time a villager sees an advertisement, he is reminded of the project again. The
Dutch Allanblackia explains it as follows:
people in Tanzania are more inclined to believe in the goodness of human beings. You also often see
things like, Ive heard it on the radio, or saw it on an advertisement, so it must be truth. While when we
see something in the Netherlands on an advertisement, we think exactly the opposite, like oh, this cant
be truth, its just an advertisement

And indeed, during the interviews all villagers mentioned the posters they saw and the
commercials they heard.

43

4.5 Adapt to institutional framework


The previous paragraphs elaborated on the factors and mechanisms that drive and enhance the
incremental trust building process. However, these factors are very general and pass over the
specific situation of the people in the regarding communities. As trust building concerns
people, it is essential to discover the factors that move these people in their life. The villagers
involved in the allanblackia case are dealing, for instance, with formal structures of their
government, but also with certain norms and values prevalent in their community.
Furthermore, they are dependent on several sources of income, which are also very important
in their lives. In this thesis, all these influencing factors in the villagers life together are called
the institutional framework. The trust building factors and mechanisms as described in the
previous paragraphs can be taken into account, but wont have much effect if the institutional
framework is neglected. Hence, the effect of building trust is strongly dependent of the extent
to which the institutional framework of the concerning communities is taken into account.
Having knowledge of, and adapting to this institutional framework moderated the effect of the
incremental trust building factors. The quotes of the Tanzanian Allanblackia manager
below give examples of the way in which the institutional framework can influence the trust
building process.
you have to know the socio-economic profile. In which way is Allanblackia going to support them
socially and economically? But youll find issues, problems they are facing. So you got to know the
challenges facing them and what other value chains you think are important to them, other than
Allanblackia. So we find out in some other areas there are other important value chains and you have
to show them allanblackia can supplement the other one, the kind of knowledge they will receive, the
kind of services they will receive, they will compliment to support other value chains

Another illustrative example of what influences the institutional framework are historical
events of a concerning community. They can determine how strangers are welcomed, and
need to be taken in account very seriously.
Im talking about more that twenty years ago, but the wounds are still there. People are rising
questions: are these not the same people who came here and told us they would buy all our spices, but
didnt, they left the product with us, are those not the same people who promised all this and that? And
there are also farmers who sold crops during the Tanzanian corporate movement, and havent got paid
to date. You have to be aware of this information to be able to anticipate on this kind of questions

44

Unilever obtained the crucial insight in the hierarchy, rules, norms, values and history of the
communities which had to be involved in the Allanblackia supply chain. Using this
knowledge was an essential moderator variable during the trust building process. From this
point of view, three mechanisms were key in the process: adaptation to rules and hierarchy,
adaptation to norms and values and collaboration in a country executive team.

Mechanism 1: Take advantage of rules and hierarchy


By far the most discussed mechanism with respect to trust building is the way in which the
government system was used. According to all interviewees, including Unilever, the NGOs
and the community members, it is hardly possible, if at all, to successfully do business in rural
areas without taking certain steps through the government structure. All interviewed villagers
emphasized that they would not have collaborated with the Allanblackia project if it hadnt
been introduced through the village government. The next explanation of the Tanzanian
Allanblackia manager provides insight in the proper use of the Tanzanian government
structure:
You cannot go straight to the village and start talking to the people. You have to call the district
commissioner first, the directors, their people, the heads of their departments, you tell them what you
want to do, they ask you questions and so on. And then when you want to go to the villages they give
you one of the officers to come with you. When you are in the village, it is the district officer who
introduces you to the village leadership and tells the district government is aware of the plans. From
then, you start working with the villager leadership.

Although proper use of the hierarchal structure in Tanzania means going through the
government structure as outlined in the quote above, it can require a totally different approach
in another country.
in Ghana, you just go into a village and make a quick stop at the local chief, if hes available, and
then you go straight to the villagers. So it is much more direct, much easier, but at other side, the
relationship is also less strong. In Ghana its always very unclear what you exactly have achieved
(quote by Dutch Allanblackia manager)

Hence, primarily research on government structures is crucial, before approaching villages


within an unknown country or community. The next page provides quotes that endorse the
proper use of the formal rules and hierarchy.

45

Institutional framework: rules and hierarchy


Villagers

if its a foreigner coming to this country, it means that the government has to agree with him,
and he has to come with some kind of agreements from the government

I wouldnt have trusted them if they didnt pass the leadership because there are a lot of
cheatings. People can cheat, the can come and pretend they want to do something and you can
find them deceiving you. So its very important for them to pass the village leadership

You cannot work with people without the government being aware, even now, as you have come
here, the village leadership is suppose to know that there are people here doing the interviews,
thats why I told your driver to go there and sign the book
NGOs

and you get their [villager leaders] blessings. They will also help you to explain the benefits to
the villagers. Sometimes youll find that this Swahili language is not as clear as their own
language. The village executives are born in the same village and understand both Swahili and
the local community language very well, then they just talk the peoples language to the people.

Mechanism 2:Ttake advantage of norms and values


Next to the formal part of the institutional framework, building trust requires to acknowledge
and adapt to norms and values of the communities within a country. In this context, values
represent ideas about what is important in a persons live. Unilevers strategic objectives
caused sincere interest in taking care of the environment. Taking care of the environment was
also one of the most important values in the communities. Interviews revealed that Unilevers
care for the environment was an important factor for villagers to join the project.

Furthermore, respecting and adapting to norms seemed to be an important factor in trust


building. Allanblackia project members took local norms very seriously. For instance, joining
local activities is seen as something you cannot get around. Its not polite to decline an
invitation. Respecting and adapting to norms can be expressed in many things. By dressing
according to local dress codes, but also by joining activities like dancing with the community
or having a meal together. The quotes on the next page show that adapting to norms and
values of a community, in bigger and smaller details, can catalyse the trust building process a
lot.

46

Take advantage norms and values


Villager

the environment is very important, it gives us lee, and even what we are harvesting is from the
trees. The people from Novella [the Allanblackia project] are supporting us a lot concerning the
environment

We discovered that these people had good intentions, because apart from anything else, they
are keeping our environment, so we decided to collaborate
NGOs

Dress code is very important, and the way you talk to old people, the way you address them. If
you not well behave, they may not kick you out rudely, but they will not entertain you next time,
theyll give you a slow go

African men, normally they want to control the funds in the family. We had to convince them
Allanblackia would be an extra income for the family by respecting they are the heads of the
family. At the same time we showed them this was a gender sensitive project
Dutch

he [one of the NGO people] knows how to handle people, he did many first introductions to

Allanblackia

create rapport with the people, that people thought, -thats a gentile man, I believe him or I trust

manager

him-. If I had stand there myself it probably worked out in a totally different way

Tanzanian

Now, sustainable in Unilever terms, because that can bring some confusion, is about don't

Allanblackia

harm the environment, but also to make sure that ethics are taken in to account, we agreed in

manager

the beginning that we were not going to pay corruption to any institution, we had norms; no
corruption, no child labour, respect the government laws and the local laws and also gender,
make sure that women are taking part, yes.

Mechanism 3: Country executive team


It might be clear that applying the independent trust building variables to the institutional
framework is very essential in trust building. However, Unilevers key mechanism to achieve
the successful adaptation to the communities framework was the country executive team.
The first practical step in the Allanblackia project was creating an executive project team in
the country where the supply chain had to be established. As mentioned in the methodology
section, the team consists of indigenous Unilever representatives, NGOs and relevant
government bodies. The specific combination of team members gives the team access to
support from and knowledge within Unilever, but also to knowledge about the formal and
informal institutions of the concerning country. Furthermore, it provides access to a broad
national and international network of relevant people and organisations. One of the first
parties involved was an international development organisation called SNV. The important

47

characteristic of the international development organisation is that it is connected with


relevant parties like the various smaller local NGOs which are experienced in working with
specific local communities. All districts and even the communities have different cultures, it
is helpful to have a local NGO familiar with the district implementing the project within the
communities. Another kind of partner that helps to become trusted by communities and are
representatives from concerned government bodies. In Unilevers case this were
representatives connected to the Tanzanian Ministry of Natural Resources and Tourism, the
body who is among other things responsible for forest conservation. Unilevers project was
dependent on the Allanblackia tree and hence it had to collaborate with (non-)governmental
parties involved in forest conservation. The quotes in the table below provides insight in the
importance of creating a country executive team with the necessary members to be able to
adapt to institutional framework(s) within a country.
Institutional framework: country executive team
Dutch

I always brought local persons and organisations in action to perform the actual job

Allanblackia
manager

in each country it are always people from the country itself, including the local management,
who are running the project. The greater part of the project is in association with small local
companies and people on village level, and I dont think western people can handle this in an
efficient way

we said, guys [to the international NGO] we have a wonderful idea, but we have to collaborate
with all those people in the local communities, were not sure how to do it, but we want to do it
in a decent way and you can help us with that
Tanzanian

Unilever utilized the capacity of the company that was already existing in the country, and that

Allanblackia

is an advantage. I was local staff from Unilever, but the people in Tanzania see me as one of

manager

them, it integrates Unilever with the community

International

we are specialized in connecting peoples capacities, we can collect the capacities of all

NGO

organizations on the ground, who can support the mobilisation of communities and establish the
supply chain

Local NGO

Culture, I mean this is dynamics of the community, for them to trust you, you have to know
their behaviour, what they expect from you

Villager

it was important for them to come through the forest people because the Allanblackia is

leader

supposed to be prevented, and it is under the forest people. Even we have rules in our village to
make sure we protect some of the trees, so most of the time we work together with the forest
people

48

4.6 An overview of the results & a BoP trust building model


The interviews revealed five specific factors influencing Unilevers trust building process
with the local communities. The first two, recognized as independent variables under the
umbrella of incremental trust building, are outset manifestation and reciprocity. Incremental
trust building means that investments in the relationship are done step by step and increase
over time. Established trust leads to more investments by the people in local communities,
which again leads to more investments by Unilever. Hence, a reciprocal effect occurred. The
third factor recognized as an independent variable was consistency. The fourth factor,
communication, fulfils two roles. In one respect it influenced trust directly irrespective of the
content. In another respect, it moderated the effect of the incremental trust building factors.
The fifth factor was also a moderator factor. Trust building concerns people. In the context of
the BoP, these people live in a totally different world than representatives from western
MNCs. Hence, it is essential for western MNCs to get acquainted with the institutional
framework of the community members. The more they adapt their trust building activities to
this institutional framework, the more successful the process will be. Besides the above
mentioned factors, this chapter also discussed the actual mechanisms that explain the relation
between the five factors and trust building. The model on the next page visualizes the factors
and the accompanying mechanisms.

49

Model for trust building in BoP communities

Reciprocity
Incremental trust building

- Invest constant and structural in relationships


- Make the project community property
- Do what you promise
- Have periodical evaluations
Outset manifestation
- Collaborate with trusted parties

Trust

- Show skills and competences in a practical way


- Write agreements endorsed by trusted parties

Consistency
- Spread consistent information
- Control consistency in external project members
Communication
- Manage transparent communication
- Use mass communication

Adapt to institutional framework


- Capitalize on rules and hierarchy
- Capitalize on norms and values

- Use a country executive team

5. Discussion and conclusion


5.1 Introduction
The circumspect reader had one very elementary question already after the research question
was outlined: If a mighty multinational company with annual revenues of more than 55 billion
dollar enters a community to collaborate with people living on less that one dollar a day, to
what extent can trust really play a role? Isnt trust a misplaced concept in this context?
Arent dependency and wishful thinking playing a much bigger role in the community
members decision to collaborate? And indeed, dependency and wishful thinking might surely
be under discussion. However, the results of this thesis clearly showed that the concerning
people in the Tanzanian communities do have to trust a party, especially a large western
company, before they decide to collaborate and become vulnerable to their actions. The
quotes in the result chapter showed that they quickly doubt the trustworthiness of foreign
companies and that they even rejected to collaborate with companies, only because there was
a lack of trust. The key objective of this research was to discover how western MNCs build
trust with local communities in developing countries. Acknowledging the above, we can state
that it was a relevant objective and the model on the previous page answers this question
based on the studied case.

Another objective was to explore if prevailing trust literature has value in the context of the
BoP. Looking at the trust building factors in the Allanblackia case through the scope of this
literature provides in first instance a familiar view. The factors as described in the result
chapter show a strong overlap with the categories of the trust building literature as displayed
in the table on page 16. In that sense, we can say that the prevailing trust literature is valuable
in the context of the BoP. However, the trust building model on page 50, shows two
interesting characteristics. The first one is the moderating role that two of the trust building
factors have. The other characteristic is the insight in mechanisms. Knowing that certain
factors influence trust building, doesnt tell much about the actual processes that account for
relations. To overcome this gap, the result chapter discussed the mechanisms that exactly tell
what caused the relation between the variables in the specific context of the BoP.

Then there are two questions concerning the BoP literature. The first is: what does this thesis
add to the existing literature, and are there any contradictions? The second is: do the methods
to successfully launch BoP ventures, as proposed in the BoP literature, foster trust as well?

5.2 The suitability of prevailing trust literature


The variables as discussed in the result chapter are not new in the trust literature. The
comparisons below will concisely paint a picture to underpin this finding.

Incremental trust building is a broadly discussed matter. Bowman and Hurry (1993) stated
that a trusted relationship starts with incremental commitment and Burt and Knez (1996)
discusses the slow process of change in the development of trust. In line with the literature,
the result chapter made clear that the villagers first started with little investments in the
project and increased their devotion over time. The literature leads one to suspect that
reciprocity is a driving factor in this process. And indeed, the case showed reciprocity as one
of the factors hanging under the incremental trust building umbrella. Furthermore, outset
manifestation, proposed as the other factor with respect to incremental trust building is
comparable with the category the first steps in trust building as displayed in the table on
page 16.

Also consistency is a familiar concept in the trust literature. Mayer et al (1995) appoint
integrity as a variable influencing trust. According to them, integrity is determined by the
extent to which a party shows consistency in behaviour.

Communication is discussed in several ways. The trust literature refers to communication in


general (Creed & Miles, 1996; Morgan & Hunt, 1994), to the importance of frequent face-toface contact (Van Ees & Bachmann, 2006), to information exchange (Das & Teng, 1998), to
making trustworthiness noticeable (Bacharach &Gambetta, 2001) and to the credible
communications of others (Mayer et al., 1995). The result chapter turned out that all these
viewpoints on communication have also been important in Unilevers trust building process.

Adaptation to the institutional framework can be traced to several of the insights discussed in
the theoretical framework. Yet, besides Arrighetti (1997), all scholars mainly discuss the
informal part of the institutions. Morgan and Hunt (1994) name shared values, Mayer et al.
(1995) speak of benevolence, Creed and Miles (1996) call it similarity, Lewicki and Bunker
(1995) a social bond because of mutual appreciation and Das and Teng (1998) discuss the
importance of norms, values and needs of each other.

52

More exiting, however, is the deviating use of the above discussed factors in the context of
the BoP. As already mentioned, there are two variables which play an important moderating
role.

The first one is communication. Although Bacharach and Gambetta, (2001) appointed
communication already as a moderator variable, it seems to have a more important role in the
context of the BoP than in a western context. The results showed that the world views of the
representatives from the western MNC and the members of the BoP communities are very
different. Hence communication had the very responsible role, to not only to make the trust
building activities knowable to the community members, but also to translate these
activities to their world view. Transparency in the communication is requisite. The reason
why the moderating role of communication is less weighty in western situations, could be
because less explanation is needed on institutional factors. This brings us directly to the next
moderator variable: the importance to adapt to the institutional framework of a concerning
community.

The difficult surmountable differences between western life and life in BoP communities, can
be a serious barrier in trust building. A MNC could put a lot of effort in the earlier mentioned
trust building factors, but if they dont adapt it to the institutional framework of the
concerning community, it wont make a big difference. Hence, the extent to which this
happens determines the success of the other trust building factors. The previous page already
showed that acknowledging rules, norms and values is discussed in the literature. It is,
however, not discussed as a moderator variable. Hence, the question is: why it should be a
moderator variable in the context of the BoP and not just an independent variable as presented
in the literature? The answer could be the following: the literature generally refers to
institutional factors as the more you are similar to each other and share the same norms and
values, the more you will trust each other. In western situations, MNC representatives
already have a similar kind of world view as their western partners and hence, the more it is
similar, the more they will trust each other. Conversely, western MNC representatives and
BoP community members are not similar at all. The difference is that big, that trust could
hardly be based on similar world views. Exactly this is the reason why trust building activities
should be very consciously adapted to the institutional framework of the concerning
community members. Hence, the lack of similarity makes adapting to the institutional
framework a moderator variable.
53

Another point regarding the adaptability of prevailing trust literature in the context of the BoP
is the actual mechanisms that cause the relationship between the variables. It could be well
conceivable that totally different mechanisms have to be used in the context of the BoP. And
indeed, although some mechanisms can be traced back to the literature, most of them are
specifically applicable in the BoP and some of them stand out especially.

For instance, showing skills and competences in a practical way. Showing skills and
competences is also mentioned by Mayer et al. (1995). However, the way in which skills and
competences cause trust is different in the BoP. Members of remote communities assess skills
and competences by looking at practical examples. An example is showing an actual product,
made by the company, or by learning practical lessons during the trainings.

Also the writing of agreements has a special way of functioning in the BoP. It would be likely
to trace this mechanism to the possibility of deterrence if trust is violated as described by
Lewicki and Bunker (1995). However, the way how it actually works is quite different.
Deterrence on legal grounds is barely possible, community members have nor the money nor
the experience to summon Unilever. Still they see these written agreements as an important
confirmation of the understandings with respect to the collaboration. Deep interviews
revealed that this is mainly because NGOs co-sign the agreements, and villagers attach strong
value to this. Hence, writing agreements can therefore better be reduced to the trusted
partner as described by Das & Teng (1998).

As in the theoretical framework turned out, all trust scholars agree that reciprocity influences
trust building. However, how to influence or manage reciprocity is less discussed. Basically
this makes sense, because reciprocity is about how both (or all) parties experiencing each
others investments in their relationship, and not about an effect caused by one of the parties.
Yet, if reciprocity has to do with more than one party, there must be at least one party who
can influence or stabilize this process. Unilever managed the reciprocity by four mechanisms:
constantly investing in the relationship, making the project community property, doing what
they promised and having periodical evaluations. The first three mechanisms determined that
the other party experienced a constant devotion from Unilevers side. The last mechanism, the
evaluations, was used so all parties could vent the way in which they experienced each others
investment in the relationship. This way, the reciprocity was evaluated.

54

Another mechanism standing out, is the transparent communication. The result chapter
discussed in Unilevers strategy to build trust, was constantly watching the clearness of all
aspects of the project to all involved parties. Everything, from strategic intentions until gross
margin analysis was explained down to the smallest detail, time and time again. However,
some suspicion with respect to this mechanism is appropriate. How can the complexity and
stratification of a company like Unilever be transparent to a BoP community member?
Indeed, it hardly cant. However, it are only the aspects of Unilever relevant to the involved
community members that have to be transparent. Hence, communication the factors related to
the supply chain can be made transparent, and doing this made Unilever a trustable partner.

5.3 Comparison with the BoP literature


The BoP literature proposed many methods to successfully launch a BoP venture. Some of
these methods even contained ideas about trust building. Hence, it would be interesting to
discuss what this thesis add to the existing literature, and if there are any contradictions. First
of all, it became very clear that all the ideas about trust building as outlined in the table on
page 18 - about trust in BoP literature -, without one single exception, played an important
role in the Allanblackia case as well.

However, zooming out on the literature to a more general level provides some interesting
views. The first thing we bump into, is the proposed importance of flying under the radar of
corruption, found in Stuart Harts book Capitalism at the Crossroads (2007). He explains
that building BoP ventures from the bottom up, by working directly with the end-consumer,
makes it possible to bypass the need to deal with the often corrupt central governments. This
might work out well, but might also take the corner too tightly. In the Allanblackia case it
turned out that trust was earned by using the government system in a proper way. Although
the national government wasnt involved in the beginning of the project, Unilever had to pass
the government on the regional, ward and village level before it could reach the actual
villagers. All interviewees mentioned explicitly that Unilever would not have been trusted if
they would have went directly to the villagers or the government on ward or village level. The
district government was the first trusted party to involve, before going any further. Another
statement in Harts book is also worth to reconsider. He mentions that relationships are
primarily grounded in social, not legal contracts. This could imply that written agreements,
signed by the involved parties are useless. The Allanblackia case, however, showed that

55

although people in local communities do attach great value to social contracts, they feel even
more confident with having contracts signed by Unilever representatives.

The findings of this thesis have more to offer than just, similarities and contradictions with the
BoP literature. There are also findings which are not connectable to the BoP literature yet, but
can offer a added value.

One of the findings in the Allanblackia case was the role of mass communication. People in
remote communities are not used to poster advertisements and commercials on their local
radio and it is taken much more serious than in western countries. Besides, by the use of mass
communication, people get constantly confronted with the project and it get integrated in the
community faster. The only communication channel discussed in the literature is face-to-face
communication. Mass communication is not yet recognized as a medium to increase
trustworthiness.

Furthermore, BoP literature pays a lot of attention to the engagement with local people and
becoming indigenous. The Allanblackia case showed that the community members attached
a lot of value to the transparency of the communication and to consistency in both
information and people. This could be an added value to the process of becoming indigenous.

The question that rest is: do the methods to successfully launch BoP ventures, as proposed in
the BoP literature, foster trust as well? The BoP protocol (Simanis & Hart, 2008) provides a
well-organized and comprehensive overview of most of these methods. Hence, it would be
interesting to discuss this protocol in the light of this thesis findings. It seems, however, that
this is a very short discussion. All of the nine steps as proposed in the protocol can also be
found in the Allanblackia case. Hence, based on this thesis, one could say yes, the BoP
protocol fosters trust building. There are, however, some points in general found in the
protocol that needs some reconsideration.

It is stated that in the selection of a BoP project site it would be better if the MNC does not
already have an extensive, entrenched business presence, Because, the initiative could be
captured by the corporations traditional business norms and practices. Surprisingly,
Unilever did have an extensive, entrenched business in Tanzania, namely the tea business.
Moreover, in this case it was very convenient, because Unilever could recruit easily suitable
56

people who had both knowledge of Tanzanian culture and Unilever culture. Of course, it
should be taken in account that the venture have to be flexible and innovative, but that should
not have to be a great barrier. The Allanblackia case showed that it can have more advantages
than disadvantages to already have an extensive business in the selected BoP business site.

Furthermore, the protocol suggests as one of the first steps to select a community based
organisation as a partner. This thesis endorses that it is very important to have a local partner,
but the protocol might include one essential step, before selecting a local partner. Unilever
collaborated with an international NGO called SNV. This partner had essential connections
with various local NGOs throughout the country. It did not only helped Unilever with finding
an appropriate local partner, but also fostered the collaboration between the several partners
and stimulated the learning process between the parties from different communities. Hence,
according the findings in this thesis, it could be more effective and efficient to partner up with
a international NGO, before directly approaching community based organisations.

The last point in the protocol to reconsider is about entering the community with no
preconceived product ideas and no initial commercial agenda. Unilever did the opposite. It
knew already what it wanted: oil from the Allanblackia nuts. Knowing already what they
wanted enabled them to conduct some preliminary research about potential possibilities. This
had the advantage that they could approach immediately the right communities with a clear
story, which made them more trustworthy to the government and the villages. Of course,
starting a BoP venture without any commercial agenda can lead to very innovative business
plans. However, it does not have to mean that having an idea in advance will by definition be
less successful.

5.4 Conclusion
The discussion showed that we already knew the trust building factors in the Allanblackia
project from the prevailing trust literature. So, could it be that trust building works the same
all around the world? As for variables relevant in trust building activities, this could be true.
This thesis confirmed they are also applicable in the context of the BoP. However, this case
also showed that the relation between the variables, their role within the process, and the
actual processes that account for the relations were for a great part context specific. Hence,
variables from the trust literature can be used as a good starting point for trust research in

57

various contexts, but the art of trust research will be to find the context dependent relations
and mechanisms. The model on page 50 indicates the relations between the variables and the
actual mechanisms accounting for the relations in the context of a western MNCs building
trust with local communities in the BoP. As for the BoP literature, we saw that the ideas
living in this field of research are for the greater part consistent with the outcomes found in
the Allanblackia case. However, the discussion showed also some critical remarks, suggested
several points that could have some attention. The main reason for this could be the still infant
phase in which the BoP literature finds itself. Keep on studying BoP cases from different
viewpoints and by different researchers could slowly evolve this area of Academia to a
meaningful discipline that might have more impact on the equal distribution of the worlds
wealth than we can imagine on this very moment.

5.5 Limitations
The relevance of the above written conclusions has to be taken with some shade of meaning.
To start with, the drawn conclusions are based on just one case. Findings would have had
more weight if they were originating from multiple cases including both successful trust
building cases and unsuccessful cases. Furthermore, trust building activities can be very
dependent on the country in which they are executed. This study would be more significant if
it was conducted in various countries. Also working with a translator could have caused some
bias in the interpretation of the interviews with the people in local communities. Although the
translator was a very proficient Swahili and English speaker, the intervention of a third person
between interviewer and interviewee could cause the lost or distortion of potentially important
information. Furthermore, the point of departing could have influenced the findings. Trust is
interwoven in a complex network of research fields. This study started with prevailing trust
literature, BoP literature, cross cultural collaboration literature and development literature as a
base. However, there are also other fields of research that could offer an interesting starting
point. The results showed that an important factor to build trust is the adaptation to the
institutional framework. The subject institutions, however, is a well-established field of
research. Hence, we could learn a lot from literature on institutions with respect to trust
building, or collaboration in general. For instance, if we know how to study institutions, trust
could even more effectively been build. Also research from communication studies could
have had added value to the theoretical framework. The results sketched communication as an
important factor in trust building. It would be interesting to see if the field of communication
research offers useful guidelines to explore effective ways of communication in BoP contexts.
58

5.5 Further research


First of all, based on the limitations of this research, future research should be conducted on
multiple cases, among which successful and unsuccessful ones and originating from different
countries on different continents. Furthermore, it could have a broader foundation of relevant
literature. Including prevailing literature on institutions and communications in the theoretical
framework could result in interesting new insights. Moreover, it would be interesting to use a
quantitative (cross-sectional) research design to test the model proposed on page 48. If
different BoP cases can be found, the research can measure the extent of trust among of the
community members in the MNC and the presence of the trust factors in the model to
determine the influence of the factors on trust building.

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