Trust in Strategic Alliances: The Social Identity Perspective

Trust in Strategic Alliances: The Social Identity

Perspective

Master Thesis, MSc Human Resource Management

University of Groningen

Trust in Strategic Alliances: The Social Identity Perspective

Abstract

Strategic alliances can have many benefits for companies, but despite extensive research into inter-organizational collaboration, scholars cannot explain why so many strategic alliances fail and how trust, a crucial success factor, is built within this context. Considering the positive effects of group membership on trust, we argue that the influence of social identities could be a crucial determinant. We address the research gap by exploring social identification processes within strategic alliances and their implications for trust, based on an online experiment in which participants make investment decisions. We found that a collective identity is positively related to trust, whereas a different organizational identity fosters less trust than a similar organizational identity. Furthermore, we found that organizational interdependence partially moderates these relationships. Thus, our results confirm the importance of social identity perceptions for trust building in alliances and give important implications for theory and practice.

Keywords

TABLE OF CONTENTS

INTRODUCTION ... 3

THEORY AND HYPOTHESIS ... 5

TRUST IN STRATEGIC ALLIANCES ... 5

SOCIAL IDENTITIES AND TRUST ... 6

THE INFLUENCE OF A COLLECTIVE IDENTITY ... 9

ORGANIZATIONAL INTERDEPENDENCE AS A MODERATOR ... 10

METHODOLOGY ... 12

PARTICIPANTS AND PROCEDURE ... 13

MANIPULATION ... 13

MEASURES ... 15

RESULTS ... 16

DESCRIPTIVE STATISTICS AND CORRELATIONS. ... 16

HYPOTHESIS TESTING (CROSS-SECTIONAL ANALYSIS) ... 16

HYPOTHESIS TESTING (BEHAVIORAL MEASURE) ... 17

SUPPLEMENTARY ANALYSIS ... 18

DICUSSION ... 19

DISCUSSION OF RESULTS ... 20

THEORETICAL AND PRACTICAL IMPLICATIONS ... 23

LIMITATIONS AND FUTURE RESEARCH ... 25

CONCLUSION ... 27

REFERENCES ... 28

APPENDIX A: STUDY DESIGN ... 35

APPENDIX B: MANIPULATIONS ... 36

APPENDIX C: RESULTS ... 38

INTRODUCTION

Strategic alliances (SA) are described as a relationship between independent companies that involve sharing, exchange, or collaborative development (Gulati, 1995). As a growing form of partnership, they are gaining importance for companies (Arino, de la Torre, Ring, & Torre, 2001). PwC’s 2016 Global CEO Survey indicates that 49 percent of the CEOs questioned plan to start a new SA or establish a joint venture in 2016 (PwC’s Deals Practice, 2016). Forming SAs can have many benefits for businesses. For example, they are used to achieve a competitive advantage, to gain access to information and resources, and to enter new markets (Dyer & Singh, 1998; García-Canal, Duarte, Criado, & Llaneza, 2002; Rothaermel & Boeker, 2008). However, apart from many possible benefits, SAs also run the risk of one of the parties acting opportunistically and thus harming the success of collaboration (Das & Teng, 1998). Kale & Singh (2009) point to a paradox, because companies commonly use SAs, but many alliances fail and cannot capitalize on the potential benefits. According to the authors, literature has not been able to explain this paradox adequately. However, given the growing number of alliances, it is essential to further examine the determinants of success and failure in order to identify practical implications.

A key driver and important determinant of the success of SAs identified in previous research is the development of trust (Gulati, 1995; Ireland, Hitt, & Vaidyanath, 2002). Trust can be defined as the confidence that the partner will not exploit the vulnerabilities of the other party (Barney & Hansen, 1994), or put differently, the willingness to make oneself vulnerable to the behavior of the partner organization (Mayer, Davis, & Schoorman, 1995). Thus, trust is connected to the perception of diminished opportunistic behavior of the other party (Gulati, Nohria, & Zaheer, 2000), thereby also facilitating mutual learning (Kale, Singh, & Perlmutter, 2000). As a result, it contributes to the success of SAs, as companies can benefit from the positive aspects of the partnership without the fear of being harmed by the partner. However, a meta-analysis by Meier and colleagues (2016), which evaluated more than 60 studies on a variety of trust-building mechanisms in SAs, came to the conclusion that "trust is a concept that is still far from being fully understood" (Meier, Lütkewitte, Mellewigt, & Decker, 2016: 248). Seeking to address the resulting research gap, we will explore further factors that underly the development of trust in SAs.

(Tafjel & Turner, 1979). In the context of SAs, these identities can be derived from the individual’s employer, an organizational identity, and from the strategic alliance itself. Moreover, the similarity in organizational identity determines whether the partner organization is seen as belonging to the ingroup or outgroup. That is, a company with a similar identity may be seen as ingroup, while a different organizational identity may be perceived as outgroup. Similarly, a derived social identity from the strategic alliance itself will include employees of both companies to the ingroup. Belonging to the ingroup has positive cognitive and behavioral outcomes for group members. One of particular importance for this work is the perceived trustworthiness. Scholars found that social identities can have an essential impact on the emergence of trust (Tanis & Postmes, 2005; Williams, 2001). While ingroup members are perceived as more trustworthy, outgroup members suffer from the intergroup discrimination resulting from ingroup favoritism (Voci, 2006).

Despite Salk & Shenkar’s (2001) proposal on the importance of social identification processes for joint ventures, only a few authors have looked into this possible determinant for trust in SAs. We will address this research gap by investigating social identity processes and their impact on trust in the context of SAs. By incorporating the social identity perspective, the research presented in this paper contribute to a deeper understanding of trust and, ultimately, the success of SAs. Precisely, we hypothesize that creating a collective group identity as SA will facilitate trust development, whereas a different organizational identity of the partner organization evokes ingroup favoritism, thereby inhibiting trust building. In addition, the influence of interdependencies between both parties will be examined. Organizational interdependency is an important factor in SAs, as it determines the degree of necessary coordination and reinforces communication between the companies. The interaction and communication resulting from interdependence could influence intergroup processes, and thus how the collective identity and a different organizational identity affect trust. Specifically, we expect that interdependence acts as a moderator, such that the positive effects of collective identity on trust can be strengthened by a high interdependency and weakened by low interdependency. Thus, the following research question is addressed:

How do perceived similarities/differences in organizational identity and a collective identity affect trust in strategic alliances?

social identity theory into trust building, this research sheds light on determinants of trust, thereby complementing the understanding of trust creation in SAs. Moreover, we investigate interpersonal and organizational trust as two related but distinct constructs. By doing this, we contribute to research that often ignores the multilevel type of trust (Zaheer, McEvily, & Perrone, 1998). Furthermore, despite its critical importance for SAs, interdependence has received little attention in previous research (Wassmer, 2010). The investigation of this moderating effect further contributes to the theoretical framework of trust building in SAs and clarify its underlying mechanism.

This research also has significant practical contributions. Practitioners can benefit from insights into the determinants of trust-building to help organizations improve the likelihood of successful SAs. By examining the effects of the similarity of organizational identity on trust, implications for the choice of a strategic partner may be derived. Beyond that, the investigation of influences from a collective identity and interdependencies, lead to recommendations on the management of SAs and the promotion of identification processes. Finally, it shows ways in which adverse effects of social identities on trust can be mitigated and when positive effects are most beneficial.

THEORY AND HYPOTHESIS Trust in strategic alliances

(Steve & Andrew, 2002; Zaheer et al., 1998). These findings of previous research illustrates that both constructs are related but still distinctive concepts. Thus, we will investigate trust in this work by looking into both components of trust. Although in the following we will only use the term trust, we will investigate both in order to account for possible differences and to enhance understanding of trust.

In the context of SAs trust is seen as an essential success factor. Confirming this, several studies found a strong relationship between trust and performance (e.g. Meier et al., 2016; Zaheer et al., 1998). Other scholars found that when trust in SAs increases, higher levels of learning occur (Ybarra & Turk, 2009). Trust in SAs is vital because both parties are vulnerable to the opportunism of the other party, and therefore, trust is required to secure cooperation (Zaheer et al., 1998). Furthermore, trust diminishes the need for transaction and governance costs, and in turn, increases the efficiency of the alliance. For example, Gulati (1995) shows that reliance on trust requires fewer equity structures, and Zaheer et al. (1998) demonstrate that fewer negotiating costs are needed when trust is apparent. Thus, trust lowers the fear of opportunistic behavior and promotes collaborative behavior (Muthusamy, White, & Carr, 2007; Young-Ybarra & Wiersema, 1999). Thereby, it also determines how the SA is managed, for example, by the use of governance structures and control mechanisms (Inkpen & Currall, 2004). Because of this critical function of minimizing the risk of opportunistic behavior of the partner organization, researchers have tried to explore how trust in SAs is affected and built. For example, Parkhe (1998) developed a theoretical framework encompassing the sources of trust in international alliances. These include process-based, characteristic-based, and institutional-based mechanisms, such as communication and safeguards. Other scholars have shown that trustworthiness in an inter-organizational context is influenced by prior interaction and cooperation processes, expected continuity as well as shared values (Ireland et al., 2002; Meier et al., 2016; Ybarra & Turk, 2009; Young-Ybarra & Wiersema, 1999). However, scholars suggest that reserach is not yet able to explain how effective trust-building in SAs functions (Albers, Wohlgezogen, & Zajac, 2016; Meier et al., 2016).

Social identities and trust

organizational identity includes what members of the organization feel and think about it, therefore entailing a common understanding of the values and characteristics of the company (Jo Hatch & Schultz, 1997). As a result, each company has its own organizational identity, which can be more or less similar.

When employees in the SA identify with their employer and feel part of the organization, they can derive social identification from organizational membership (Van Knippenberg & Schie, 2000; Rink & Ellemers, 2007). The social identification is based on attributes of the organization and consistency with the self-definition of a person (Dutton, Dukerich, & Harquail, 1994) and refers to "the perception of oneness with or belongingness to some human aggregate" (Ashforth & Mael, 1989: 21). According to the social identity theory (Tafjel & Turner, 1979), individuals derive social identities from the groups they belong to, which give them a sense and information about who they are and where their place in society is (Tafjel & Turner, 1979; Albert & Whetten, 1985). Identities can be derived from the organizational level, but also the department, the team or other possible categorizations (Ashforth & Mael, 1989).

Organizational identification can have consequences for collaboration in the SA. Tafjel and Turner (1979) suggest that individuals differentiate between people belonging to the same group, namely the ingroup, and people outside of the group. Social identities are important for self-view and self-esteem of individuals, which is why the distinctiveness from other groups and the resulting distinction between in- and outgroup is deemed important (Brewer & Gardner, 1996). Applying this knowledge into the context of SAs, it is of interest how similar or different the partner organizations are perceived in their organizational identity. If the partner organization has a similar organizational identity, employees likely perceive it as a shared identity, and the partner organization is considered as belonging to the ingroup. If, on the other hand, both parties have a different organizational identity, the partner organization will be seen as outgroup.

cooperative behavior, reward allocation and group cohesion (Balliet et al., 2014; Brewer, 1979; Mathias, Huyghe, Frid, & Galloway, 2018; Tafjel et al., 1971).

Because of these positive effects of ingroup favoritism for group members, it is important to assess whether partner organizations in SAs are perceived as belonging to the same group. As mentioned earlier, sharing group membership leads to positive cognitive consequences, making ingroup members perceived as more trustworthy (Voci, 2006). Therefore, we assume that a similar organizational identity of the partner organization has a positive effect on trust because the other party is considered as a member of the ingroup. First support for this assumption can be found in a meta-analysis by Meier et al. (2016) which is based on the above-introduced framework of Parkhe (1998). The authors explored trust-building mechanisms in SAs and found that the similarity of corporate culture is positively related to trust. Although culture and organizational identity are distinct concepts they are related, as the organizational identity is embedded in the culture of the organization (Jo Hatch & Schultz, 1997). Consequently, this finding provides first evidence of a positive effect of a similar identity on trust in the inter-organizational context.

Unlike a similar identity, a partner organization with a different organizational identity is considered as outgroup. This may have further consequences for cooperation, since working with an outgroup may even raises awareness for the ingroup (Ashforth & Mael, 1989) and increases competitive behavior (Dutton et al., 1994). Therefore, collaboration with a company that differs in its organizational identity could strengthen the perceptions of the own organization as ingroup and the partner organization as an outgroup. Consequently, this could lead to an impairment of cooperative behavior of both companies owed to ingroup favoritism. Another consequence, if the partner organization is considered as an outgroup, is that employees want to act on behalf of the ingroup (Dutton et al., 1994). As a result, they may choose to support their company with opportunistic behavior, which in turn inhibits trust building. Finally, a role conflict can arise from conflicting values, norms, or beliefs in identities, which can be resolved by placing the identities in a hierarchy (Ashforth & Mael, 1989). Thus, a different organizational identity could lead to a higher priority being placed on one’s own organizational interests and profits, reinforcing the implications mentioned above [ingroup favoritism, opportunistic behavior]. Therefore, we hypothesize that a different organizational identity negatively impacts trust building in comparison to a similar organizational identity.

The influence of a collective identity

The repeated and regular interaction, as well as shared goals of employees of both companies involved in the SA, could lead to the development of a feeling of oneness, thus a new group. According to the Common Ingroup Identity Model (Gaertner & Dovidio, 2000), perceptions of group affiliation can be changed by recategorizing the outgroup from ‘they’ to ‘we’. By establishing a higher-order group, former outgroup members are included in the new group and intergroup bias can be diminished (Gaertner, Mann, Murrell, & Dovidio, 1989). In this way, employees from both partner organizations are encouraged to consider themselves as one inclusive group, thereby also directing ingroup favoritism on former outgroup members (Dovidio, Gaertner, & Saguy, 2009; Gaertner & Dovidio, 2000). Supporting this possibility, Ireland and Webb (2007) emphasize the role of a collective (supply chain) identity in building trust to gain a competitive advantage from strategic collaboration.

An important factor in establishing this new identity is not only the interaction but also the feeling of a psychological connection as a group (Ashforth & Mael, 1989). Previous studies have shown that even under minimal conditions, such as the assignment to a group by a lottery ticket, ingroup favoritism and outgroup discrimination evolves (Brewer, 1979; Locksley, Ortiz, & Hepburn, 1980). The very nature of collaboration is likely to promote the feeling of belonging to a group, when members share a common fate (Campbell, 1958; Gaertner, Iuzzini, Witt, & Oriña, 2006). Hence, employees in SAs can develop a social identity in addition to their already established identities, namely, a collective identity.

One result of this shared identity is that the counterparts working in the partner organization are now defined as members of the ingroup. The positive feelings and behaviors related to group members would also be associated with members of the partner organization. Evidence of this effect can be found in studies that examine the influence of a collective identity. For example, scholars found that a collective identity positively influences supportive behavior, new product performance, and the capitalization of knowledge resources (Dovidio et al., 1997; Kane, 2010; Sethi, 2000). Since the former outgroup is now regarded as belonging to the ingroup, they benefit from the perception of trustworthiness that is connected to group membership.

However, after developing a collective identity, the partner organization is perceived as belonging to the ingroup, regardless of the similarity in identity. Taking this into account, the presence of a new identity is likely to facilitate trust building.

Hypothesis 2. The level of a collective identity is positively related to trust towards the counterpart in the partner organization.

Organizational interdependence as a moderator

The similarity of organizational identity and the level of collective identity is expected to have an impact on trust through group membership and connected attributes, such as perceived trustworthiness and ingroup favoritism. Our conceptual model proposes that this relationship is further moderated by organizational interdependence. Interdependence is an important factor in SAs and defines the need for coordination of tasks and thus, the required level of communication and decision making (Gulati & Singh, 1998).

The connected positive associations provide ingroup members with “a sort of depersonalized trust on other ingroup members that is predicated simply on awareness of their shared category membership” (Kramer, 1999: 577). We expect that the level of trust associated with group membership can be increased or decreased dependent on the degree of interdependence. Interdependence is characterized by the need for collective action (Wageman, 1995) and thus influences the interaction of employees within SAs. As trust is associated with the process of interaction and learning of credibility, it develops over time (Das & Teng, 1998; Williams, 2001). Moreover, highly interdependent groups “exhibit high-quality social processes, extensive mutual learning, and a sense of collective responsibility for performance outcomes” (Wageman, 1995: 174). As a result, greater interdependence facilitates groups to learn more about the trustworthiness of group members, as the partner organizations are forced to interact more with each other.

common goal, can promote the salience of collective identity and thus strengthen the positive attributes linked to this (Gaertner & Schopler, 1998).

In contrast, partner organizations that work mostly independently of each other may not benefit from the positive associations of group membership because they are not involved in frequent interaction. Under these conditions, employees may not see the common goals and focus more on differences with the partner organization (Rink & Ellemers, 2007; Wilder & Thompson, 1980). In conclusion, we expect interdependence to influence the group dynamics and thus the relationships mentioned above between a collective identity and trust. More specifically, in SAs with a high degree of interdependence, the need for greater interaction and increased ingroup favoritism strengthen the positive relationship between collective identity and trust. In contrast, the lack of interaction due to low interdependence weakens the positive relationship between the collective identity and trust.

Hypothesis 3. Organizational interdependence moderates the relationship between a collective identity and trust such that this relationship is stronger with a high interdependence and weaker with a low interdependence.

Due to the reasoning above, we assume that organizational interdependence moderates the relationship between similarity/difference in organizational identity and trust. In SAs with little interdependence, the lesser interaction might strengthen the intergroup bias, thereby fostering the negative relationship between a different organizational identity and trust. On the contrary, in SAs with a high degree of interdependence, the need for interaction and frequent contact can reduce intergroup bias and weakens the adverse effect. Consequently, organizational interdependence would be a way to overcome the potential missing similarity in organizational identities.

Hypothesis 4. Organizational interdependence moderates the relationship between a different organizational identity and trust such that this relationship is weaker with a high interdependence and stronger with a low interdependence.

FIGURE 1 Conceptual model

METHODOLOGY

The hypotheses are tested by an online-based experiment published for participants on the website MTurk, using the prime services. Additionally, it was distributed in the private network. The study is set up on Qualtrics, an online survey platform and the study design includes a modified version of the ‘Trust Game’ (Dasgupta, 1988; Weber & Baumann, 2017). The participants and the procedure, as well as manipulation and measures, are described in the following. In addition, to deepen the understanding of the findings and to gain further insights, two interviews were carried out with employees involved in inter-organizational collaboration. Results from the interviews will be used in the discussion section to underline connections inferred in the quantitative analysis.

Participants and procedure

The final sample consists of 319 participants, of whom about 49% are female and 51% male. The average age is 39 years, with the youngest participant being 20 and the oldest 70 years old. Almost 92% of the participants are from the US and around 85% are native English speakers, which indicates a high degree of English proficiency in the entire sample. All participants were excluded who had failed the attention checks because these questions asked for a basic understanding of the experiment. Besides this, three participants were characterized by an invalid response pattern and therefore had to be excluded from the dataset.

The participants were randomly assigned to seven different conditions in which the alliance partners differ in the similarity of organizational identity and the degree of interdependence. See Appendix B, Table B1, for an overview of the conditions. In the experiment, the participants acted as the alliance manager of FIRM A and in the interest of the company, participating in collaboration with FIRM B. They were told that they would be assigned to a random participant who acted as FIRM B. Participants then had to decide how many resources they wanted to invest in the SA instead of an in-house investment. The investment made would then be multiplied by 5 and the outcome distributed by FIRM B. Attendees were made aware that an investment in the collaboration, although it creates uncertainty, as FIRM B decides entirely on the distribution of outcome, could yield higher returns than an in-house investment. After each of the five rounds, the participants were informed that FIRM B decided to distribute the resources evenly. In the final part of the study, participants were asked about the collaboration, trust, a collective identity, personality characteristics and descriptive items. A detailed description of the procedure can be found in Appendix A.

Manipulation

Identity perceptions. The perceptions about the similarities/differences in the

participants were informed of the distribution of resources by FIRM B tailored to their condition of similar or different organizational identity (i.e. “FIRM B decided to distribute the output evenly among FIRM A and FIRM B. Hence, both firms [each firm] gained an equal amount of resources as output; to further expand their shared identity [unique identities]”). Furthermore, the similarity or difference in identity was again displayed in a figure showing two overlapping or separated circles.

In order to test if the manipulation worked, participants were asked to indicate how much they agree with the statement “each party clearly had a different organizational identity”. The one-way ANOVA shows that the answers for this statement are significantly different for different conditions of identity perceptions (baseline, similar, different; Welch's F(2, 123.805) = 46.887, p = 0.00). Post hoc test results show further that only the similar identity condition does not differ significantly from the baseline condition (MDifferent = 5.53, SD = 1.37; MSimilar =

3.72, SD = 1.78; MBaseline = 4.23, SD = 1.70)

Interdependence perception. The perception of the organizational interdependence

between FIRM A and FIRM B was manipulated by describing their dependencies (“The collaboration requires a high [low] degree of task interdependence. Thus, FIRM A and FIRM B work [not] closely with each other in doing their work. They must [do not have to] coordinate their efforts with each other, and the way individual actors perform their jobs has a significant [no] impact upon others in the cooperation.”). These statements are taken from a scale that measures task interdependence (Liden, Wayne, & Bradway, 1997) and are adapted to the circumstances of the experiment. We added two statements adapted from Pearce & Gregersen (1991) as manipulation checks to verify that the manipulation worked. The one-way ANOVA results for Item 1 (“Employees of FIRM A work fairly independently of FIRM B.”) show that the answers to this statement are statistically different for the three conditions of interdependency perception (baseline, low, high; F(2, 316) = 4.886, p =0 .01). However, the post hoc test results show that only low and high interdependence differ significantly, and that high interdependence and baseline differ marginally significantly (MBaseline = 5.27, SD = 1.34; MLow = 5.46, SD = 1.35; MHigh = 4.83, SD = 1.61). Item 2 (“How people at FIRM A perform has

Measures

Trust. A scale by Zaheer, McEvily, and Perrone (1998), who examined trust in the

inter-organizational context was used to measure interpersonal trust. The scale was adapted, originally from Rempel and Holmes (1986) and measures the trust in the contact person (Cronbach’s Alpha = 0.80). An example question is: “The contact person of FIRM B has always been even-handed in negotiations with me.”. To measure organizational trust, an eight-item scale adapted from Mayer & Davis (1999), Adams, Highhouse & Zickar (2010) and Hon & Grunig (1999) was used, which assesses the perception of benevolence, integrity and ability of the partner organization (Cronbach’s Alpha = 0.89). An example item is “FIRM B put its own interest over FIRM A.”. By incorporating the two different measures, both trust in the contact person and trust in the partner organization were assessed.

In addition to these scales, trusting behavior was measured by the allocation of resources in the rounds of the trust game. During the experiment, the participants had no influence on the distribution of the outcome by FIRM B and were therefore vulnerable to the opportunism of FIRM B. Hence, the higher the investment made by the participants, the more they showed trusting behavior towards FIRM B.

Collective identity. Collective identity was measured using a six-item scale from Mael

and Ashforth (1992). The scale was adapted to measure a collective identity in the context of SAs as the authors original intent was to measure organizational identification. The participants were asked among others “When I talk about this collaboration, I usually say ‘we’ rather than ‘they’.” (Cronbach’s Alpha = 0.85).

Control variables. Four control variables were included: gender, age, the disposition to

(Appendix D, Table D1) shows that the need for affiliation and disposition to trust are positively correlated with interpersonal trust. The results of the regression analysis, however, show only a significant relationship between disposition to trust and organizational trust (B = -0.23, SE = 0.01, p = 0.03) and between need for affiliation and interpersonal trust (B = 0.08, SE = 0.05, p = 0.07).

RESULTS Descriptive statistics and correlations.

The means, standard deviations and zero-order correlations for all variables are presented in Table D1 (Appendix D). Cronbach’s Alpha was calculated for all variables and is consistently at 0.80 and above.

Hypothesis testing (cross-sectional analysis)

In this analysis, we test our hypothesis using cross-sectional data compiled in the survey. The variable ‘organizational trust’ is transformed in order not to violate assumptions of the linear regression and the one-way ANOVA. Hypothesis 1 is tested by conducting a one-way ANOVA with post hoc tests. The results show that interpersonal trust is statistically different for different conditions of identity perceptions (different, similar or baseline; F(2,316) = 4.473,

p = 0.01). The Turkey-Kramer post hoc test further shows that the mean difference between

‘similar’ (MSimilar = 5.93, SD = 0.82) and ‘different’ (MDifferent = 5.65, SD = 0.83) is statistically

significant (p = 0.01). Similarly, organizational trust is statistically different for the three conditions of identity perception (F(2,316) = 3.788, p = 0.02) and the conditions ‘similar’ and ‘different’ show a statistically significant mean difference (MSimilar = 0.75, SD = 0.20; MDifferent

Hypothesis 2 predicts a positive relationship between collective identity and trust. The hypothesis was tested by conducting a multiple regression analysis. The regression results show a statistically significant effect of collective identity on interpersonal trust (B = 0.40, SE = 0.04,

p = 0.00) and organizational trust (B = 0.06, SE = 0.01, p = 0.00). The effect of collective

identity accounts for 20.2% of the variance of interpersonal trust, but only 7.9% of the variance in organizational trust. An overview of the regression results can be found in table C2 and C3 in Appendix C. Furthermore, the results of a one-way ANOVA show that the collective identity score is not significantly different for the three conditions of identity perceptions (baseline, similar, different; F(2,316) = 0.606, p = 0.55).

For the moderator analysis, a linear regression analysis was conducted according to the method of Baron & Kenny (1986). The moderating effect of organizational interdependence on the relationship between a collective identity and trust was then further explored using the PROCESS macro for SPSS (Hayes, 2013). The results confirm an interaction effect on the relationship between collective identity and organizational trust (B = -0.07, SE = 0.03, p = 0.01), with a significant effect of a high interdependence (B = 0.11, SE = 0.02, p = 0.00) and low interdependence (B = 0.04, SE = 0.02, p = 0.04). Likewise, an interaction effect between collective identity and interdependence on interpersonal trust is confirmed by the results (B = -0.28, SE = 0.11, p = 0.01), for both high interdependence (B = 0.58, SE = 0.09, p = 0.00) and low interdependence (B = 0.30, SE = 0.07, p = 0.00). Hence, hypothesis 3 can be confirmed. The moderation effect is illustrated in Figure C2 and C3 in Appendix C.

To test hypothesis 4, the PROCESS macro for SPSS was also used. The results show no statistically significant effect of organizational interdependence on the relationship between the similarity of organizational identity and trust (Organizational trust: B = 0.03, SE = 0.03, p = 0.26; interpersonal trust: B = -0.03, SE = 0.12, p = 0.83). Hence, hypothesis 4 can be rejected.

Hypothesis testing (behavioral measure)

is tested by conducting a two-way mixed ANOVA. The results show a statistical difference in mean resources allocation in the different rounds (F(2.695, 727.636) = 133.154, p = 0.00), but not between the identity groups (F(1, 270) = 0.423, p = 0.52). This result contradicts our findings from the cross-sectional analysis. Hence, hypothesis 1 can be confirmed for the two components of perceived trustworthiness, while the analysis of the behavioral measure provides no proof.

To test the effect of collective identity on trusting behavior, another two-way mixed ANOVA was conducted. Nevertheless, in round 4 and 5 of the trust game, even after the transformation of data, the assumption of heterogeneity of variances could not be achieved. As a result, the test may suffer from power problems (Ho & Weerahandi, 2007). Consequently, the results of the first three rounds, as well as the results for the entire game, are stated below, whereby the results of all five rounds can only be interpreted with caution.

Considering the first three rounds, the results show a difference in resource allocation at different rounds (F(1.597, 506.188) = 126.328, p = 0.00) and between low and high collective identity, as assessed by the median (F(1,317) = 7.711, p = 0.01). Analysis of all five rounds with the violated assumption shows similar results for a difference in resource allocation for low and high collective identity (F(1,317) = 9.193, p = 0.00) and the same estimated marginal means of resources for the first three rounds (see figure C1 in Appendix C). These results provide further evidence of the positive effect of collective identity on trust. Hence, hypothesis 2 can be confirmed.

Supplementary analysis

influence of collective identity on trust. Only the control variable disposition to trust loses a significance to organizational trust in the regression analysis.

One notable change is found in the moderating effect of organizational interdependence on the relationship between collective identity and organizational trust (B = -0.13, SE = 0.04, p = 0.00). The effect with high interdependency seems to be strengthened (B = 0.16, SE = 0.04,

p = 0.00), whereas the effect with low interdependency is no longer significant (B = 0.03, SE =

0.02, p = 0.26). The regression results and an illustration of the change in moderation can be found in Appendix D (see table D1 and D2; figure D1).

Testing the hypothesis 4 with the new dataset also results in a change. For both trust components, the moderating effect of organizational interdependence on the relationship between the similarity of organizational identity and trust become significant (Organizational trust: B = -0.10, SE = 0.05, p = 0.03) or marginally significant (Interpersonal trust: B = -0.33,

SE = 0.19, p = 0.08). However, only high interdependence is significant (Organizational trust:

B = 0.12, SE = 0.04, p = 0.00; interpersonal trust: B = 0.44, SE = 0.16, p = 0.01) and low interdependence is not significant (Organizational trust: B = 0.02, SE = 0.03, p = 0.52; interpersonal trust: B = 0.12, SE = 0.10, p = 0.26). Appendix D contains the regression results and a presentation of the moderation (see table D3 and D4; figure D1 and D2).

DICUSSION

Discussion of results

The assumption that a different organizational identity will foster less trust than a similar organizational identity is supported by a small but significant negative effect of a different organizational identity on organizational and interpersonal trust compared to a similar identity. This corresponds to preceding studies which found that people experience fewer positive feelings and associations toward outgroup members and more positive affect and trust towards ingroup members (Otten & Moskowitz, 2000; Voci, 2006). Our result provides further evidence that the similarity or difference in the organizational identity of the partner organizations in SAs indeed impacts the perception of trustworthiness. In a broader context, this finding supports the assumption that selection and fit of the SA’s partner play an important role in its success (Kale & Singh, 2009). Our findings complement studies arguing that partner compatibility, thus the fit between styles and culture of both companies, has a positive impact on alliance performance (Sarkar, Echambadi, Tamer Cavusgil, & Aulakh, 2001). Considering our findings, the similarity of organizational identities seems to be another factor that should be taken into account when choosing a strategic partner.

In contrast to the findings just mentioned, the results of the behavioral measure of trust do not provide any evidence supporting our assumption that a different organizational identity fosters less trust than a similar identity. However, a study by Tanis and Postmes (2005) has shown that group membership is a predictor of trusting behavior. Having said this, the difference in the results can be explained by modifications in the experimental setup. For example, scholars found that ingroup favoritism is stronger when studies investigate real groups instead of artificial-created groups (Mullen, Brown, & Smith, 1992). The experiment of Tanis and Postmes (2005) differs in that the students who participated in the study were told to which university the counterpart belongs. Thus, the fact that the authors linked the experiment to an already established and real social identity [belonging to the university] may have led to higher ingroup favoritism and thus caused a difference in the effect on trusting behavior compared to the experiment in the present study.

In conclusion, these two explanations for the difference in results of hypothesis 1 have one thing in common. Namely, the participants did not identify sufficiently with FIRM A in the beginning. The experiment could be adapted to take this into account, for example, by basing FIRM A on the participants’ employer. Another possibility would be to provide more information about FIRM A in order to foster identification processes. Finally, the experiment could be done in a laboratory setting, similar to other experiments on ingroup favoritisms under minimal conditions for group membership (e.g., Gagnon & Bourhis, 1996; Locksley et al., 1980; Otten & Moskowitz, 2000).

Furthermore, results of the interviews contradict our findings from the quantitative analysis. Both interviewees stated they did not see a connection between organizational identity and trust. Adding to the discussion above, this raises the question, under which circumstances the relationship between a similar/different identity and trust exists and on what factors that depend. For example, both interview partners operate in the same organizational environment, thus factors such as industry or employment type could affect identity perceptions and the relations to the strategic partners.

Another factor examined in this study for its influence on trust is a collective identity. We predicted that the level of collective identity is positively related to trust. This is supported by the results that show a positive and significant relationship between collective identity and trust. Furthermore, the analysis of the trust game revealed a higher allocation of resources with high collective identity compared to low collective identity. These findings are consistent with previous research on the positive effects of a collective identity on trust (Crisp et al., 2006; Gaertner & Dovidio, 2000) and underline the importance of a group connection for employees involved in SAs. However, further knowledge of the processes and circumstances of establishing and maintaining a collective identity is needed to use recategorization in the SA context effectively.

then different cultures can easily be overcome. (…) We don’t need to be talk about differences; we need to be focusing on what is the similarities.”. In conclusion, together with the effect of similarity in identity on trust, our analysis shows that interpersonal and organizational trust in inter-organizational collaborations is influenced by social identities (Tanis & Postmes, 2005; Voci, 2006).

Besides the effect of similarity in identity and collective identity on trust, we explored a possible influential factor of these relationships. The results confirm the expected moderating effect of organizational interdependence on the relationship between collective identity and trust. More precisely, the positive effect of a high collective identity is stronger with high interdependency and weaker with low interdependency. Supporting the effect of high interdependence, one interviewee stated “(..) you tend to have more intense contact with that group with whom you share more your research interests than with the other group and that probably leads to more trusting.”.

The effect of collective identity on trust under the condition of high interdependency is even greater when only those participants are considered who were aware of the similarity in identity and the degree of interdependence. With low interdependence, however, the effect is insignificant. That the supplementary analysis reveals different results corresponds with past research, which states that the salience of membership can impact behavior (Brown et al., 1999; Smith et al., 1994). In conclusion, we found a positive relationship between collective identity and trust when the partner organizations have a high interdependence. However, assuming that group membership is salient, the positive effect of collective identity on trust is not significant when interdependence is low.

Hypothesis 4, concerning a moderating effect of organizational interdependency on the relationship between a different organizational identity and trust, is rejected. However, the moderation effect changed when the awareness of similarity in identity and perceptions of interdependence was a prerequisite in the analysis. Mullen, Brown & Smith (1992) claim that increasing the salience of the ingroup leads to an increase in ingroup favoritism. This may explain why the moderating effect of interdependence only becomes significant when considering participants who are aware of the similarity in identities. Thus, only the salience of group membership makes organizational interdependence an influential factor. In practice, this should be the case because of the nature of SAs, a collaboration of independent companies. As a result, we will continue to look at the results of the supplementary analysis.

Contrary to our expectations, the results reveal that the negative effect of a different identity on trust is significant when interdependence is high, while the effect is insignificant when interdependence is low. Thus, the negative effect of a different organizational identity on trust exists only when the partner organizations have a high interdependence. This finding corresponds to research suggesting that mutual interdependence increase ingroup favoritism (Balliet et al., 2014). Thus, high interdependence promotes ingroup favoritism, which could lead to the negative effect of a difference in organizational identity on trust.

In conclusion, when group membership is salient, only the condition of high interdependence makes social identities an influential factor for trust building in SAs. In contrast, when interdependence is low, the effects of collective identity and the similarity in organizational identity on trust are insignificant. This finding is in consonance with the proposal of Williams (2001) that the independence of groups will make negative or positive beliefs about trust towards in- and outgroup less likely. On the contrary, when interdependence is present, it generates emotions, such as positive and negative affect (Williams, 2001), which could cause social identities to influence trust. Ultimately, strategic alliances will only benefit from the positive effects of a collective identity or a similar organizational identity when interdependence is high.

Theoretical and practical implications

gap by providing insights into identity processes and their implications for trust. With this, we supplement the SA literature and make important contributions to the understanding of the trust-building mechanism and its connections to social identities, which ultimately contributes to the success of SAs. In addition, our findings on the impact of similarities in organizational identity complement existing literature considering partner selection and fit.

Furthermore, the positive effect of a collective identity contributes to theoretical work by pointing to a viable factor that can support trust in SAs, facilitate successful cooperation, and help to overcome difficulties from differing organizational identities. Moreover, our study extends the social identity theory by including organizational interdependence as a moderating factor for the cognitive processes that result from group categorization. As a result, we provide evidence that interdependence influences the effects of collective identity and a different organizational identity.

Besides theoretical contributions, this study also has implications for the management of SAs. Our results indicate that a different organizational identity fosters less trust than a similar oganizational identity. This finding may already have implications for the selection of the right strategic partner for collaboration, namely a possible preference for partners with a similar organizational identity. However, the moderation analysis revealed when this relationship is significant. Consequently, the consideration of differing identities in the partner choice seems most vital when the SA involves high interdependence.

Our findings continue to show that having a collective identity has a positive effect on trust, even if the partner organization has a different organizational identity. As a consequence, SAs with high interdependence can overcome the harmful effects of differing identities by promoting a collective identity. To support this, we encourage organizations to make the alliance identity more salient, for example, by asserting what is distinctive, central, and enduring in the SA or use features such as a collective name or symbol (Gaertner & Dovidio, 2000; Kane, 2010; Albert & Whetten, 1985). This allows the members of the organizations to review and define the attributes of the identity and its correspondence with their self-definition and it increases the tendency to identify (Ashforth & Mael, 1989; Dutton et al., 1994). Furthermore, Ashforth and Mael (1989) propose that the prestige of the groups can increase identification. Therefore, features that emphasizes the distinctness over other groups or highlight the successes of the SA can be used to increase group salience and identification processes.

time and will take considerable effort (Dovidio et al., 2009). Furthermore, research also points to the disadvantages of recategorization processes, as this could further increase ingroup favoritism rather than promoting a new inclusive identity (for an overview see Dovidio et al., 2005, 2009). One solution could be a dual identity in which maintaining the salient nature of the former social identity can protect from the danger of increasing ingroup favoritism in recategorization processes (Crisp et al., 2006). As a result, it could be advantageous to maintain the salience of organizational identities of both companies.

A closer look at the moderating effect of organizational interdependency reveals when this investment seems to be most important. It illustrates that the benefits of a strong collective identity on trust are present when both organizations are highly interdependent. Since high interdependence is associated with coordination costs, increased trust due to the collective identity can reduce these costs and thus have a positive effect on alliance performance (Gulati & Singh, 1998; Zaheer et al., 1998). Therefore, it seems especially advantageous for a company to invest in recategorization processes when the interdependence between the partner companies is high.

Limitations and future research

In regard to the generalization of the results of this study, several limitations must be considered. In the following, we present the limitations of this study and point to suggestions for future research. First, we have mainly used cross-sectional and self-reported measures for the analyses, thus, causality cannot be inferred. To restrict this limitation, we have also included a behavioral measure of trust (i.e., the trust game), which led to partly contradicting results compared with the cross-sectional dimension. However, while we treated this as an additional measure of trust, scholars suggest that perceived trustworthiness and trusting behavior can be distinct concepts (Tanis & Postmes, 2005). This possibility was not conceptually considered in the present work owed to restrictions in scope and time.

which information from the counterpart has to be requested. In conclusion, this study did not fully capture how identity perceptions affect trust in practice.

A third limitation must be considered regarding the interview results. Although the focus of this study is on the quantitative results, we conducted a qualitative analysis to deepen our understanding of the results. The two interview partners both acted in collaborations in the same organizational environment, which limits the generalizability of the results and possibly impacted their perceptions of the SA. The findings from the interviews have supported our quantitative analysis but, in some points, have yielded contradictory results. This raises the question under which circumstances our findings of the quantitative analysis apply and what factors influence this.

Finally, our research is limited in exploring the role of organizational interdependence and its implications for group dynamics in SAs. We focused on the moderating effect of this variable, as we expected that a high interdependency could enhance trust associated with a collective identity. Indeed, our results confirm that interdependence moderates the relationship between a collective identity and trust. However, researchers suggest that due to interaction resulting from interdependence, similarities with the outgroup are revealed (Wilder & Thompson, 1980). Thus, the joint effects of interdependence and collective identity could also be explained by a change in the collective identity strength through discovered similarities. Consequently, future research could test this mediating process in longitudinal research with at least two points in time.

CONCLUSION

Although it is generally acknowledged that trust is a crucial success factor of SAs, the determinants are not fully understood. Applying the theoretical framework of social identity theory, we address this research gap by examining social identity perceptions and their implications for trust in the inter-organizational context. In doing so, we found that a different organizational identity fosters less trust than a similar identity. In line with our expectations, we have also found that a collective identity has a positive impact on trust; even with otherwise different organizational identities. This finding complies with preceding studies examining the positive effect of collective identity in reducing intergroup bias and building trust (Crisp et al., 2006; Gaertner et al., 1989; Gaertner, Rust, Bachman, Anastasio, & Dovidio, 1994; Gaertner et al., 1999).

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APPENDIX A: STUDY DESIGN FIGURE A1

Scenario introduction

APPENDIX B: MANIPULATIONS TABLE B1 Manipulation conditions Baseline N = 47 Similar identity N = 137 Different identity N = 135 Baseline

N = 134 Condition 1 N = 47 Condition 2 N = 43 Condition 3 N = 44 High interdependence N = 98 Condition 4 N = 49 Condition 5 N = 49 Low interdependence N = 87 Condition 6 N = 45 Condition 7 N = 42 FIGURE B1

Description in low interdependence condition

FIGURE B2

FIGURE B3

Description in similar identity condition

FIGURE B4