10.1201 9781315229355 Previewpdf PDF

Trust Building and Boundary
Spanning in Cross-Border
Management
This edited book addresses two critical issues in international management:

building trust and managing boundary-spanning activities between
international business partners. The duel-process of internationalisation
of multinational corporations (MNCs), through globalisation and
regionalisation, has helped MNCs to increase their market expansion
and improve the capabilities of innovation and learning. By creating
various forms of international strategic alliances (ISAs), MNCs have
become structurally more complex and geographically more dispersed.
As a result, MNCs in general and ISAs in particular face the challenges
of discerning blurred organisational boundaries, reconfiguring the
control mechanisms, integrating diversified resources, and coordinating
distributed activities in time and space.
Research in organisation behaviour indicates that boundary spanners
play critical yet unspecified roles and functions in managing cross-
boundary relationships. A core boundary-spanning function is to build trust
relationships. When organisations engage in business transactions, members
of the organisations are concerned with not only the outcomes of economic
transactions but also the processes of social exchanges. Boundary spanners
may succeed in building interpersonal trust in a partnership; nonetheless
their effort may not lead to inter-partner trust without an effective
implementation of the institutionalisation process. Whereas trustworthiness
is the antecedent to trust providing the basis for trust to develop, distrust
manifests itself as a separate and linked concept to trust. These dynamic
features of trust, trustworthiness, and distrust are critically elaborated.
Trust Building and Boundary Spanning in Cross-Border Management is
dedicated to explicating these under-researched themes and contributing
to the emerging streams of research in micro foundations and micro-
structural approaches. It illustrates the latest research on the topic and
will be of interest to both students at an advanced level, academics and
reflective practitioners in the fields of organisational behaviour and theory,
strategic management, international strategy and strategic alliances.
Michael W. Zhang is a Reader in International Strategy at Nottingham

Business School, Nottingham Trent University, UK.
Routledge Studies in Trust Research
Series Editors: Rosalind Searle and Ann-Marie Nienaber
Available Title in This Series:

Trust Building and Boundary Spanning in Cross-Border Management
Edited by Michael W. Zhang
Management
Edited by Michael W. Zhang

First published 2018
by Routledge
711 Third Avenue, New York, NY 10017
and by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2018 Taylor & Francis
The right of Michael W. Zhang to be identified as the author
of the editorial material, and of the authors for their individual
chapters, has been asserted in accordance with sections 77 and 78
of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted
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Library of Congress Cataloging-in-Publication Data
A catalog record for this book has been requested
ISBN: 978-0-415-34756-3 (hbk)
ISBN: 978-1-315-22935-5 (ebk)
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Contents
List of Figures vii

List of Tables viii
List of Abbreviations ix
List of Contributors x
Acknowledgements xii
1 Introduction: Trust Building and Boundary Spanning

in Cross-Border Management 1
M I C H A E L W. ZH A N G
PART I
Conceptual Development 15
2 Trust and Distrust—The Microstructural Ties Connecting

Cross-Border Inter-Partner Relationships 17
3 Boundary Spanning in ISAs: A Trust Perspective 32

M I C H A E L W. ZH A N G AN D PAUL GO O DE RH A M
PART II
Trust Building through Boundary Spanning 49
4 Trust Building and Boundary Spanning in Global

Collaborations 51
TH O M A S TØT H A N D AN N E - MARIE SØ DE RB ER G
5 Personal Attachment of Boundary Spanners in ISAs:

A Two-Sided Coin 68
F R A N Z I S K A E N GE L H A RD A N D RO B IN P E SCH
vi Contents
6 Building Trust across International Boundaries:
The Founder’s Role in Consulting Firm’s Early Development 86
M U R R AY TAY L O R, JA RRYD DAYMO N D, AN D JAMES WILLAR D
7 Trust in Global Value Chains and the Role of Intermediaries 107

A L E S SA N D RO P E RRI AN D N A N CY B UCH AN
PART III
Boundary Spanning from a Trust Perspective 133
8 Micro-Foundation Thinking in Alliance Learning: Role

of Boundary Spanners’ Theory of Mind 135
X I N L U Q I U AN D SVE N A . H AUGL A N D
9 Restoring Trust through Isomorphism at MFIs:

Trustworthiness and Boundary Permeability 157
RO B E RT S WAL E F A N D MICH AE L W. ZH AN G
10 Spanning the Boundary of Organisations: A Systematic

Review of the Inter-Organisational Boundary-Spanning
Literature 181
RYA N TA N G , XIN L U Q IU, AN D MICH AE L W. Z HANG
11 Concluding Summary 218

Index 229
Figures
2.1 Continua of Trust and Distrust 25

2.2 Changes of Trust and Distrust in IOR over Time 25
2.3 Interactive Effect of Trust and Distrust on IOR
over Time 26
2.4 Micro-structural Ties of Trust and Distrust
Connecting IORs 27
4.1 Boundary-Spanning Diagram 61
5.1 Personal Attachment by Boundary Spanners in ISA 77
6.1 Client and Consulting Firm Trust at Individual, Group,
and Organisational Levels 100
6.2 The Trust Spiral—Internationalisation Commitment
and Trust Levels 101
9.1 Trustworthiness and Boundary Permeability 168
Tables
4.1 The Role of Boundary Spanners in Development of Trust

in Inter-Organisational Collaborations Framework 59
6.1 Overview of Case Study Firms 92
7.1 Interview Participants’ Profiles 118
7.2 How Trade Intermediaries Narrow Trust Gaps
in the GVC 127
A9.1 The Profiles of Interview Participants 180
10.1 Patterns of Inter-organisational BS Studies in Top
Journals (1970s–2010s) 183
10.2 Inter-organisational BS Studies Included 184
10.3 Conceptual Boundaries 199
10.4 BS Research and Applications 202
10.5 The Scope of Boundary Spanners 204
Abbreviations
BSP Boundary-Spanning Personnel

FDI Foreign Direct Investment
GVC Global Value Chains
HQ Headquarters
IJV International Joint Ventures
IOC Inter-Organisational Collaboration
IOR Inter-Organisational Relationships
ISA International Strategic Alliances
IT Information Technology
JV Joint Ventures
MFI Multinational Financial Institutions
MNC Multinational Corporations
TCE Transaction Cost Economics
ToM Theory of Mind
UNCTAD United Nations Conference on Trade and Development
Contributors
Nancy Buchan is an Associate Professor of International Business and

Associate Dean of Undergraduate Programs at the Darla Moore School
of Business at the University of South Carolina, USA.
Jarryd Daymond is a Research Associate and PhD student in Work and
Organisational Studies at The University of Sydney Business School,
Australia.
Franziska Engelhard is a Postdoctoral Research and Teaching Associate
at the FAU Erlangen-Nürnberg, Germany.
Paul N. Gooderham is a Professor of International Management at NHH—
The Norwegian School of Economics, Bergen, Norway.
Sven A. Haugland is a Professor of Business-to-Business Marketing and
Strategy at the Department of Strategy and Management at NHH—
The Norwegian School of Economics, Bergen, Norway.
Alessandro Perri is an Assistant Professor of Professional Practice at Rut-
gers Business School—New Brunswick and Newark, USA.
Robin Pesch is a Postdoctoral Research and Teaching Associate at the
Chair of Strategic Management and Organization of the University of
Bayreuth, Germany.
Xinlu Qiu, PhD, is a Research Scholar in Strategy and International Busi-
ness at the NHH—The Norwegian School of Economics, Bergen, Norway.
Anne-Marie Søderberg is a Professor of Cross-Cultural Communication
and Management at Copenhagen Business School, Denmark.
Robert Swalef is a Visiting Fellow at Nottingham Business School where
he obtained in 2014 his Doctorate of Business Administration. He cur-
rently works in a global bank in Geneva, Switzerland.
Ryan Tang is a Lecturer in International Business in the UniSA Business
School at the University of South Australia, Australia.
Contributors xi
Murray Taylor is a Lecturer in International Business at Macquarie Uni-
versity, Australia.
Thomas Tøth is an Independent Management Consultant and External
Lecturer at Copenhagen Business School, Denmark.
James Willard is a Teacher currently pursuing his research into the histori-
cal contexts of corporations in New South Wales, Australia.
Michael W. Zhang is a Reader (Associate Professor) in International Strat-
egy, Nottingham Business School, Nottingham Trent University, England.
Acknowledgements
The idea of editing a book on trust building and boundary spanning

originated at the AOM Annual Meeting in Philadelphia back in 2015
when David Varley, then the Senior Commissioning Editor in Business,
Management, Accounting and Finance from Routledge, contacted me
for a discussion of producing a book based on my recent work on the
subjects. After the process of submitting my proposal through editorial
reviews to the acceptance by Routledge, the book project commenced in
earnest with an open Call for Chapters in October 2016. I received posi-
tive responses and was overwhelmed by the interest shown in the book.
Nine manuscripts were eventually accepted following the double-blind
review. All the authors of the accepted manuscripts were involved in the
review process. In addition I would like to say special thanks to Rob Ack-
rill, Konstantina Kougiannou, Anna Ozolina, Rose Quan, and Hussain
Rammal for providing critical and constructive comments to the authors
out of their busy schedules.
I am glad with the geographical coverage of the authors who are cur-
rently located in Australia, Denmark, Germany, Norway, Switzerland,
the United Kingdom, and the United States. I also noted that during the
processes of submission and revision some of the authors were working
toward the end of their doctoral study, indicating to a certain extent the
growing interest in the theme of the book shown by early career research-
ers and their supervisors. More satisfactory is the fact that a number of
these doctoral candidates have in the past few months secured academic
posts and joined the various research institutions.
Like managing any projects, there can always be some interruptions
during the process. This is especially so when the project involves inter-
national collaboration amongst researchers geographically located in dif-
ferent regions of the world. There were a number of delays of revision and
resubmission caused by such issues as personal health, relocation, and over-
seas research projects, etc. Nonetheless, the authors have all striven to
revise and improve the manuscripts taking into account of the reviewers’
Acknowledgements xiii
comments and worked hard to meet the agreed the deadlines. I would
like to thank all the authors for their effort and contribution.
I would like to take this opportunity to express my gratitude to David
Varley, Brianna Ascher the Commissioning Editor, and two Editorial
Assistants Megan Smith and Mary Del Plato for providing full support
and encouragement without which the completion of the book could not
have been possible.
Last but not least, I feel grateful to my wife Belinda (王蕾), my daugh-
ters Ruth (若芙) and Beth (若萱), without their understanding and
unwavering patience I could not have been able to work the many hours
that could be regarded as not-so-family-friendly.
MWZ
31 October 2017
Nottingham, England
1 Introduction
Management
Michael W. Zhang
1.1 Background and Context

While editing this book on trust building and boundary spanning in
cross-border management I am delighted to have read two most recently
published works on the subjects of managing knowledge and innovation
across organisational boundaries and national borders. One is the book
Managing Knowledge Integration across Boundaries, edited by Tell et al.
(2017) and published by Oxford University Press. The other is a Special
Issue from the Journal of Management Studies on “Boundary Spanning in
Global Organizations”, guest-edited by Schotter et al. (2017).
Tell et al.’s book is the culmination of their four-year research from the
programme of Knowledge Integration and Innovation in Transnational
Enterprise. Their research focus is on the integration of advanced and
specialised knowledge in various organisational contexts. By advanced
and specialised knowledge they are primarily concerned with knowledge
generation and integration by professionals from the following domains
and disciplines: engineering, scientists, and corporate managers. Their
analysis and discussion is pertinent to the contributions in my edited
book.
Schotter et al.’s Special Issue on the other hand provides a summary of
the past research on boundary spanning in a broader sense than that of
Tell et al.’s. The trend of globalisation which had been rapidly growing
until the sudden burst of the financial crisis in 2007 is still facing great
uncertainty for the choice of future direction. This has been further com-
plicated, Schotter et al. (2017) argue, by the United Kingdom’s histori-
cal memorandum to exit the European Union in 2016 and the potential
policies to reverse the trend of globalisation by the Trump presidency in
the United States. The changes in global business environment will have
implications, likely to be more negative than positive, for managing eco-
nomic and social transactions across national borders and organisational
boundaries.
Nonetheless, in terms of global investment activities the recent UNC-
TAD data show that FDI flows saw a healthy recovery in the years of
2015 and 2016 from the previous six years.1 It is as true of FDI inflows as
2 Michael W. Zhang
it is of FDI outflows. The United States is still leading the global trend of
investment with an FDI outflow of $299 billion in 2016, albeit less than
the amount of $393 in 2007. Noticeable is the increasing FDI outflows
from China. Being one of the leading recipients of FDI inflows in the past
decades following the ‘open door’ economic reforms, China’s FDI out-
flow more than doubled in 2008 in comparison to that of 2007 with $57
billion and $27 billion respectively. The growing trend continued through
to 2016 with a registered figure of $183 billion, making China the second
largest contributor to FDI outflows in the world.2
Until recently the duel-process of international expansion of multina-
tional corporations (MNCs), through globalisation (Dunning 2003; Dun-
ning, Fujita, and Yakova 2007) and regionalisation (Ghemawat 2005;
Rugman and Verbeke 2004, 2007), has helped MNCs to increase their
economies of scale and improve the capabilities of innovation and learn-
ing (Doz 1996; Tallman and Chacar 2011; Tell et al. 2017). By creating
various forms of international strategic alliances (ISAs), multinational
corporations have become structurally more complex and geographically
more dispersed. As a result, ISAs face the challenges of discerning blurred
organisational boundaries amongst the inter-organisational relation-
ships (IORs), reconfiguring the existing control mechanisms, integrating
diversified resources and specialised knowledge, as well as coordinating
inter-organisational collaboration (IOC) in time and space (Brouthers
and Hennart 2007; Choi and Beamish 2004; Kostova and Roth 2003;
Krishnan, Martin and Noorderhaven 2006).
Against this historical background, I am editing this book with two
main themes of trust building and boundary spanning in international
strategic alliances to further develop this emerging and important area
of academic enquiry. In this edited volume, researchers from Australia,
Denmark, Germany, Norway, Switzerland, the United Kingdom, and
the United States have made contributions from various perspectives.
The ranges of the subjects and industry sectors covered are wide and
interesting, from the micro-level investigation of the efficacy of learning
and knowledge transfer between international strategic alliance partners
through the lens of the theory of mind (ToM), to the macro-level exami-
nation of the link between institutional distance and trust gaps amongst
buyers and suppliers in global value chains (GVC), and from the early
entrepreneurial consulting firms to established large multinational finan-
cial institutions.
The book is divided into three parts. Following this Introduction
(Chapter 1), two conceptual chapters by Zhang (Chapter 2) and Zhang
and Gooderham (Chapter 3), are included in Part I to provide the con-
textual background of conceptual developments of trust building and
boundary spanning respectively. In Part II the four chapters selected for
inclusion focus on trust building through boundary spanning. They are
Chapter 4 by Tøth and Søderberg, Chapter 5 by Engelhard and Pesch,
Introduction 3
Chapter 6 by Taylor, Daymond and Willard, and Chapter 7 by Perri and
Buchan. It is worth noting that all chapters in this edited book cover
the subjects of trust and boundary spanning, but the weighting between
the two concepts varies. As a result, I categorically put three chapters
in Part III: Chapter 8 by Qiu and Haugland, Chapter 9 by Swalef and
Zhang, and Chapter 10 by Tang, Qiu and Zhang. In the final chapter
(Chapter 11) Zhang summarises the key findings of the chapters in rela-
tion to the current state of the research on trust building and boundary
spanning before proposing a number of directions for future research. I
will briefly introduce the chapters with a hope to provide the reader with
a sense of coherence emerging from this edited volume.
1.2 The Chapters
1.2.1 Part I Conceptual Development

Chapter 2: Trust and Distrust—The Microstructural Ties Connecting
Cross-border Inter-partner Relationships Through the theoretical lens
of inter-organisational relationship (IOR), Zhang critically reviews the
literature on trust research in international strategic alliances. He recog-
nises the contribution made by transaction cost theory to the research
on strategic alliances, especially the ex ante transaction costs during the
pre-formation phase of a partnership (Connelly et al. 2016). Meanwhile,
he maintains that IOR theory offers more explanatory power in expli-
cating the complex trust dynamics in international strategic alliances
than that of transaction cost theory referring specifically to the post-
formation period of inter-organisational collaboration. Zhang’s focus
is on the relational and social aspects of inter-organisational collabora-
tion where he elaborates two key concepts before proposing a dynamic
micro-structural model of trust and distrust: (1) the under-researched
concept of trustworthiness; and (2) the emerging area of interest in the
concept of distrust.
He notes that for a better understanding of trustworthiness as a con-
cept different from trust we need to grasp the role and function trustee
plays in a dyadic relationship between the trustee and the trustor. It is
the characteristics and actions of the trustee that determine the degree at
which he/she will be trusted (Mayer, Davis and Schoorman 1995). More
important to the discussion in this chapter is the concept of distrust.
Drawing insights from Lewicki, McAllister and Bies’s (1998) research on
trust and distrust and adding a temporal dimension, Zhang develops two
separate yet linked continua of trust and distrust. The dynamics of trust
and distrust manifest in the rates at which trust increases and distrust
deceases in line with the development of inter-organisational collabora-
tion. In addition, the effectiveness of the boundary spanners will influ-
ence inter-personal trust relationships at the IOR boundaries.
4 Michael W. Zhang
Combining the research by Geletkanycz and Hambrick (1997) and
Puranam, Raveendran and Knudsen (2012) Zhang proposes a dynamic
micro-structural framework comprising both trust and distrust as elas-
tic ties spanning the inter-organisational relationships. In line with the
researchers contributing to this edited book, he also emphasises that
trust relationships are first and foremost an individual phenomenon. It
is possible, albeit very challenging, to translate inter-personal trust into
inter-organisational trust (Ring and Van de Ven 1992; Zaheer, McEvily
and Perrone 1998). For organisations to create and sustain reputation
in transaction relationships they need to demonstrate their behavioural
trustworthiness, not the psychological state of trust (Ring and Van de Ven
1992), and their trustworthiness can be monitored and evaluated (Das
and Teng 1998).
Chapter 3 Boundary Spanning in ISAs: A Trust Perspective Zhang and
Gooderham look into the subject of boundary spanning in international
strategic alliances from a trust perspective. They argue that while trust
can be relatively readily developed within an organisation, its develop-
ment across organisational boundaries is significantly more arduous.
Tensions and conflicts are elements of organisational life, which is even
more apparent in the management if international strategic alliances due
largely to the challenges in aligning ISA partners’ goals and objectives.
However, the concept of conflict has been treated as a unitary construct
in research resulting in a dichotomy between success and failure in out-
comes and performance. Following Amason (1996), Zhang and Gooder-
ham explicate two types of conflict: one is task conflict and functional
and the other relational conflict and dysfunctional. This refinement of the
concept of conflict enables them to identify the types of trust that can be
associated with the types of conflict.
In reviewing the literatures of boundary spanning and trust building,
they summarise the functions and activities of boundary spanners to
include, inter alia, face-to-face communication, information processing,
conflict mitigation, and social interaction. In the early stage of an ISA
partnership, information asymmetry can be a potential source causing
post-formation inter-partner conflicts. As boundary spanners are task-
and role-orientated personnel working at the ISA boundaries, they are
ideally positioned to deal with task-oriented conflict by developing social
trust and affect-based trust. Therefore the presence or absence of effective
boundary spanners at the ISA boundaries will determine the partnership
performance. In a set of propositions Zhang and Gooderham contend
that effective boundary spanners can be purposefully trained to accom-
plish specific activates and functions at the task environment.
They note two interesting features of research on boundary spanning
and trust building. One is that researchers tend to start the analysis from
the individual level, and the other is the majority of scholars have taken
a process approach. And they concur with Katz and Kahn (1966) and
Introduction 5
Thompson (1967) that it is through the processes of changes in the struc-
tural and social systems that patterns of actions and relationships are
represented and observed.
1.2.2 Part II Trust Building through Boundary Spanning

Chapter 4 Trust Building and Boundary Spanning in Global Collabora-
tions Tøth and Søderberg examine the way in which inter-organisational
boundary spanners influence the process of developing trustful client-
vendor relationships involved in global software development projects.
They argue that trust development is a core boundary-spanning activ-
ity and develop an analytical framework to help understand the various
roles those boundary spanners play in building and maintaining effective
collaboration for complex projects.
They adopt and further refine Palus, Chrobot-Mason and Cullen’s
(2014) “Boundary Spanning Leadership Model” by introducing and add-
ing the concept of trust-preparatory boundary-spanning activities. It is
worth noting that building trust is one of the six main objectives of Palus,
Chrobot-Mason and Cullen’s (2014) leadership model. Taking the pro-
cessual view on trust building, Tøth and Søderberg ask two questions:
(1) What is the role of boundary spanners in global collaboration? And
(2) How do these boundary spanners influence perceived trustworthiness
of vendor-side actors and the vendor organisation?
They take us through the process of boundary spanning and demon-
strate how trust and trustworthiness can have an impact on vender-client
relationships throughout the boundary-spanning process. They claim
that perceived trustworthiness and ultimately trust are important fac-
ets of boundary spanning. Two boundary-spanning roles are critical to
the success of building trust, one is so-called intermediary and the other
connector. The change of trust-preparatory boundary-spanning activities
from the individual level to the collective level is achieved by repeatedly
connecting actors from both the client side and the vendor side. In so
doing the client-side actors are exposed to an array of offshore vendor-
side actors and gradually they are likely to start to assess the vendor-side
collective as trustworthy.
Viewing from the practice-orientated perspective on the process of
trust building at the inter-organisational boundaries, Tøth and Søderberg
(p. 72) point out that we ‘must not retreat to a priori assumptions about
boundaries as per se problematic’, but regard boundaries as socially con-
structed and emergent from differences in practice.
Chapter 5 Personal Attachment of Boundary Spanners in ISAs: A
Two-sided Coin Engelhard and Pesch adopt a social capital perspective
to investigate the development of personal attachment by the boundary
spanners between international strategic alliance partners. They use Luo’s
(2001, 178) definition of personal attachment as ‘the degree to which
6 Michael W. Zhang
boundary spanners from each party are socially bonded through hav-
ing developed interpersonal relationships and interpersonal learning’.
They argue that personal attachment can help develop inter-personal
relationships between international strategic alliance partners by increas-
ing trust and suppressing opportunistic behaviour. The need of boundary
spanners’ personal attachment comes from the changes in multinational
corporations where the structure becomes more complex and relation-
ship environment is more ambiguous. In particular the composition of
people working in multinational corporations is more diversified with
different ways of thinking, communicating, and behaving due to cultural
distance. This kind of interactional ambiguities may lead to conflicts and
mistrust between boundary spanners at the ISA partnership boundaries.
It is argued that boundary spanners can have a crucial role to improve
alliance performance through managing diversity and conflicts, and the
relationship between boundary spanners within international strategic
alliances is under-researched. They raise two, amongst others, research
questions: (1) How can boundary spanners build, maintain, and deploy
social capital to achieve their social objectives? And (2) What is the role
of trust building and personal attachment in the context of international
strategic alliances?
They contend that the boundary-spanning personnel within the ISA
partnerships rely on social capital to perform their functions and there-
fore secure trust and cooperation. Building trust enhances the potential
that the boundary spanners will transfer assimilated knowledge through
inter-personal interactions and facilitates joint problem solving. None-
theless, they acknowledge that social capital is a necessary but not suf-
ficient condition for boundary spanning, and boundary spanners need
to implement the trust building process in various stages of the alliance’s
growth and development.
Chapter 6 Building Trust across International Boundaries: The Found-
er’s Role in Consulting Firm’s Early Development Taylor, Daymond and
Willard’s research context is early-stage consulting firms attempting to
internationalise the services to their cross-border clients. They focus on
the founders of those early-stage consulting firms who have entrepre-
neurial orientation with risk-taking behaviour. The founders of the early-
stage consulting firms are influencial in their firms’ decision-making
process as they are the agents of opportunity exploitation, network cre-
ation, and knowledge assimiation their companies’ formative years. They
consider the careers of those entrepreneurial agents as ‘boundaryless’, as
they work discretely between the consulting firms and their clients. The
founders of the five studied consulting firms have all started the process
of internationalisation early based on their entrepreneurial qualities of
expert knowledge, power and trust building. Because the founders pos-
sess specialised knowledge which is unbounded, their services may span
national borders and organisational boundaries.
Introduction 7
One particular challenge faced by those founders is to maintain strong
and trusting relationships with their clients during the process of inter-
nationalisation. They develop a conceptual framework of trust-building,
the trust spiral in Figure 6.2, by combining Vangen and Huxham’s (2003)
cyclical trust-building loop and Currall and Inkpen’s (2002) logic of
multi-level trust development. Their findings show that the founders
begin building inter-personal trust with their overseas clients, before
engaging in risk-taking collaborative actions with their clients at the
group level.
Taylor, Daymond and Willard have also elaborated the concept of
trustworthiness in their analysis and discussion. They contend that the
ability, benevolance, and integrity of the consultant are important char-
acteristics in the early development of the consultant-client relationship.
Individual consultants’ trustworthiness will contribute to their consult-
ing firms’ market reputation and network reputation contributed to the
development of trust, therefore, further creating organisation-level trust
from the group-level trust. Delineated as such, we can see the dynamics of
trust development with increasing collaboration between the consulting
firms and the clients, and changes in the founder’s role in the consulting
firm. The founder plays the role of both the consultant and the manager
of the consulting firm in the early stage of internationalisation. As the
consulting firm grows, the clients demand permanent services with pro-
fessional staff in the foreign subsidiaries which engenders the founder to
focus primarily on the management of the firm.
They maintain that even though three levels of trust, individual, group,
and organisational, are observable, it is the individual level trust, i.e. the
founder’s inter-personal trust with the client that is the foundation. The
entrepreneurial founder’s initial trustworthiness enables the reduction of
complexity of trust development at the group and organisational levels
by providing consistent expectations as the relationship develops.
Chapter 7 Trust in Global Value Chains and the Role of Intermediar-
ies Perri and Buchan examine the trust gaps between buyers and sup-
pliers in outsourced global value chains (GVCs) from the perspective of
institutional distance. Buyer-supplier relationships in outsourced GVCs
have high home-host institutional distance and incur significant costs in
overcoming the cognitive, normative, and regulative barriers to exchange
and coordination. They propose a link between institutional distance and
trust gaps in GVC buyer-supplier relationships using trade intermedi-
aries as brokers of trust to explain the effects of institutional distance
on the buyer-supplier relationship. Those trade intermediaries play the
boundary-spanning roles and devise two distinct trust-building mecha-
nisms, namely cognition-based trust building mechanism and affect-based
trust building mechanism. Interestingly the cognition-based trust build-
ing mechanism is applied to trust development with international buyers,
and that of affect-based to trust development with regional suppliers.
8 Michael W. Zhang
This dual mechanism of trust development, they argue, is well aligned
with the trade intermediaries’ adoption of a dual governance structure:
an arms’-length contract-based governance with international buyers, and
a more informal network governance with the regional suppliers. Using
rich data collected via interviews with retail executives, trade intermediar-
ies, sourcing agents and apparel manufacturers in the United States and
Southeast Asia, Perri and Buchan link the barriers caused by cognitive,
normative, and regulative institutional distances in global value chains
with interpersonal, inter-organisational, and institutional trust gaps in
cross-national trust development through multiple cross-border interfaces.
Following Granovetter (1985) they contend that the trust-seeking
behaviours of boundary spanners are institutionally determined and are
subject to the influence of the networks of social relations. Conceptu-
ally they support the view that trust is a micro-level construct based on
the individual’s dispositional and behavioural attributes. They argue that
institutional distance can be better understood from a practice perspec-
tive, i.e. repeated trade interactions between buyers and suppliers at the
cross-national interface. The interactions are first and foremost initiated
by individual boundary spanners with responsibilities in the parties to the
exchange. It is those boundary spanners who help develop trust between
the transacting organisations and they start the process by assessing their
counterparts’ reliability, benevolence, and integrity. In other words, the
boundary spanners seek signals of trustworthiness of the involved parties
in trade. Their findings show that wrong signals are often sent amplifying
rather than bridging distance which ultimately hinders trust development
instead of promoting it.
1.2.3 Part III Boundary Spanning from a Trust Perspective

Chapter 8 Micro-foundation Thinking in Alliance Learning: Role of
Boundary Spanners’ Theory of Mind Qiu and Haugland turn their atten-
tion to micro-level cognitive psychology to examine learning and knowl-
edge exchange in inter-organisational collaboration. They regard those
individuals who routinely work at the inter-organisational boundaries
as boundary spanners. They emphasise the roles that boundary spanners
perform in promoting learning and knowledge transfer by applying the
theory of mind. They argue that extant research on boundary spanning
has focused on the functions or roles of boundary spanning but neglected
the characters and the mind of individual boundary spanners. Therefore
in this chapter they attempt to apply theory of mind (ToM) to investi-
gate how personal characteristics may influence the way in which bound-
ary spanners perform their tasks of promoting learning and preventing
knowledge leakage during inter-organisational collaboration.
They adopt Cohen and Levinthal’s (1990) notion of absorptive capac-
ity to address the issue of inter-organisational learning and knowledge
Introduction 9
transfer and regard learning between partners in international strategic
alliances as a process of exchanging, receiving, and absorbing knowl-
edge. During such a learning process, however, boundary spanners face
a dilemma of simultaneously promoting inter-organisational learning
and preventing potential knowledge leakage. This challenging task puts
pressures on the boundary spanners to possess mentalising skills. And
they argue that the interpretation and comprehension of others’ minds
is critical for understanding the perceived trustworthiness of the partner
in sharing tacit knowledge. As conflict exists in any international inter-
organisational cooperation and it can have an impact on knowledge shar-
ing between the partners, trust development and effective communication
is required. They note that researchers have often used collective unit, i.e.
groups and organisations, as the key level of analysis with an implicit
assumption that boundary spanners are a group of homogeneous indi-
viduals. They contend that organisation-level constructs must be rooted
in individuals and their intentions, beliefs, and interactions.
Chapter 9 Restoring Trust through Isomorphism at MFIs: Trustwor-
thiness and Boundary Permeability Swalef and Zhang move to the global
banking sector in the context of the most recent financial crisis which
requires trust restoring. The management of boundary permeability by
multinational financial institutions’ (MFIs) boundary spanners is their
central concern. MFI managers need to manage their relationships with
the customers on the one hand and the public on the other. Whereas
with the public they are subject to strong formal isomorphic pressures
from the institutional environment, with the customers they face infor-
mal isomorphic forces from both the home country and host countries.
It is critical for MFI subsidiary managers acting as boundary spanners to
assess appropriate approaches to comply with the desired behaviour of
the foreign subsidiaries in the host country societies, without jeopardiz-
ing the desired behaviour of the parent company in the home country
societies. They argue that identification of organisational boundaries and
management of boundary permeability that determines the degree of iso-
morphism with host country societies can assist MFIs in fostering legiti-
macy and trust in both home and host countries. They raise two research
questions: (1) What type of isomorphism at the macro-level should be
selected based on boundary permeability to assist restoring trust in MFIs?
And (2) What are the minimum requirements for trustworthiness to be
established at a micro level?
They consider that the trustworthiness of MFI professionals and their
interactions with customers at the micro level are interconnected with
the level of trust the public may give to MFI subsidiaries in the communi-
ties they serve at macro level. Furthermore, this cause-effect relationship
between trustworthiness and trust is moderated by the level of isomor-
phism within the institutional context as delineated by their proposed
analytical framework. They maintain that the basis for trust at the macro
10 Michael W. Zhang
level is trustworthiness at a micro level. MFI professionals, especially
those at the subsidiary level in the host countries, have to demonstrate
ability and integrity in their interactions with customers, regulators, and
other stakeholders.
Empirical data were collected by the first author conducting 25 semi-
structured interviews with 21 participants in subsidiaries of a global
bank. Findings from their rich data show that to achieve institutional
isomorphism through coercive formal rules and normative regulations at
the macro level cannot be accomplished without the process of informal
mimetic isomorphism through human interactions between MFI profes-
sionals and their key stakeholders at the micro level.
Chapter 10 Spanning the Boundary of Organisations: A Systematic
Review of the Inter-Organisational Boundary-Spanning Literature Tang,
Qiu and Zhang attempt to provide a comprehensive understanding of
the subject of boundary spanning in inter-organisational relationships by
conducting a systematic review of the literature. They argue that the the-
oretical roots and the conceptual dimensions of the research on boundary
spanning are still ambiguous. They searched and retrieved peer-reviewed
articles published in the top 10 management journals using the FT 50
journal rank with a focus on the relevance to the management discipline.
The final dataset contains 32 papers published between 1977 and 2017.
Their findings show three development stages of the boundary-spanning
(BS) research with a growing trend of publishing inter-organisational BS
research in top management journals: the emerging stage of the 1960s
and 1970s, the slow development stage of the 1980s and 1990s, and
the stage of revived interest in boundary-spanning research in the 2000s
and 2010s. Among the 32 papers in their review, 21 have been published
since 2000. One particular finding indicates that the roles of boundary
spanners have evolved away from the tangible structural systems to more
intangible social relationships. They confirm that the extant literature has
drawn insights from theories such as open system, behavioural theory of
firms, social identity theory, knowledge based view, and open innova-
tion perspective. The divergent understandings have not been reconciled
recently, but become more diverse. Such wide a range of theoretical under-
pinning gives rise to the concern that current research on boundary span-
ning is still at the stage of conceptual development rather than theoretical
development. In other words, to claim a “boundary-spanning theory” is
premature. Boundary-spanning researchers need to clarify the theoretical
components of boundary spanning including conceptual terms and their
relationships (Van de Ven 2007).
Chapter 11 Concluding Summary: Micro-level Research on Social and
Organisational Systems Zhang summarises the major findings from the
chapters in this book and proposes a number of directions for future
research. He notes that when organisations engage in business transac-
tions, their individual members are concerned with not only the outcomes
Introduction 11
of economic transactions but also the processes of social exchanges.
It is this attention to individual level of analysis that underscores the
theoretical and conceptual themes of the book’s chapters. He draws
the theoretical insights from micro-foundations (Felin et al. 2012) and
micro-structural approach (Puranam, Raveendran and Knudsen 2012) to
address the conceptual challenges facing the researchers. In light of the
fast-paced technological changes, organisations have become increasingly
knowledge-intensive. Integrating highly specialised knowledge across
national borders and organisational boundaries requires organisations
to enhance their capabilities to deploy resources and coordinate activates
in line with any intended micro-structural changes. And creating trust-
worthiness is pivotal for efficient flow of tacit dimension of knowledge
at the boundaries of inter-partner or inter-organisational relationships.
Interestingly early work on systems theory is also concerned with individ-
ual actions and inter-personal relationships within and between organ-
isations and how organised coordination and integration are achieved
Blau (1964); Katz and Kahn (1966); Lawrence and Lorsch (1967); and
Thompson (1967). Zhang observes the link between the two streams of
literature and maintains that it is this intellectual confluence that we will
benefit from for further theoretical development.
1.3 Concluding Remarks

I concur with Schotter et al. (2017) that our understanding of the func-
tions and activities of boundary spanning in international strategic
alliances and global organisations is still limited. This limitation is com-
pounded by the lack of conceptual clarity in our treatment and opera-
tionalisation of the constructs of trust, trustworthiness, and distrust in
our research, which we regard as fundamental to economic transactions
and social exchanges. I hope the chapters in this book will shed light on
the theoretical development and practical implication of our research and
stimulate further interest in the subjects under concern.
Notes
1. The period 2011–12 witnessed a short-lived rise in investment activities.
2. FDI data for China used hereby is for mainland China only. If the FDI outflow
data from Hong Kong, Macao, and Taiwan are added, the figure will be $264
billion.
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Trust Building and Boundary

This edited book addresses two critical issues in international management:

Michael W. Zhang is a Reader in International Strategy at Nottingham

Available Title in This Series:

Edited by Michael W. Zhang

List of Figures vii

1 Introduction: Trust Building and Boundary Spanning

2 Trust and Distrust—The Microstructural Ties Connecting

3 Boundary Spanning in ISAs: A Trust Perspective 32

4 Trust Building and Boundary Spanning in Global

5 Personal Attachment of Boundary Spanners in ISAs:

7 Trust in Global Value Chains and the Role of Intermediaries 107

8 Micro-Foundation Thinking in Alliance Learning: Role

9 Restoring Trust through Isomorphism at MFIs:

10 Spanning the Boundary of Organisations: A Systematic

11 Concluding Summary 218

2.1 Continua of Trust and Distrust 25

4.1 The Role of Boundary Spanners in Development of Trust

BSP Boundary-Spanning Personnel

Nancy Buchan is an Associate Professor of International Business and

The idea of editing a book on trust building and boundary spanning

1.1 Background and Context

1.2 The Chapters

1.2.1 Part I Conceptual Development

1.2.2 Part II Trust Building through Boundary Spanning

1.2.3 Part III Boundary Spanning from a Trust Perspective

1.3 Concluding Remarks

Trust and Distrust—The Microstructural Ties Connecting Cross-

Boundary Spanning in ISAs

Building Trust across International Boundaries

Micro-Foundation Thinking in Alliance Learning

Restoring Trust through Isomorphism at MFIs

Spanning the Boundary of Organisations

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