Faculty
Professor Peter Ping Li

Course Coordinator
Professor Peter Ping Li

All social activities involve and depend on trust because trust is at the root of any exchange relationships. In particular, there is a growing recognition that trust always plays a critical role in interpersonal and inter-firm relationships not only within a single nation or culture but also between distinctive nations or cultures. Specifically, the link between trust and national culture has multiple dimensions at all levels with critical implications for international business activities. For instance, trust is at the root of all interpersonal business activities, such as foreign trade and foreign direct investment, but the form and strength of such trust is contingent upon the cultural context of each nation as well as the interaction between those nations where cross-border business activities take place at both intra-firm and inter-firm levels. Intercultural trust is central to highly interdependent multinational teams and long-term international alliances, both of which depend on trust to unite cultural diversity.

We need to understand the role of trust in inter-cultural interaction as well as the process in which trust is being built during such interaction in the context of international business. In other words, we must learn how trust is being built not only between people and organizations within each single nation or culture but also those across diverse nations or cultures. This is especially important to effective management of multinational enterprises with an increasing emphasis on multicultural teams and alliances. To a less extent, it is also important for those firms operating within a single nation but dealing with a multicultural or diverse workforce (such as U.S. and some European countries to a less extent).

The Course Overall Goal

The overall goal of this elective is to enhance the students’ understanding and capabilities concerning intercultural trust-building in the context of managing international business activities. We can do so by providing an integrative framework and a detailed coverage of various related issues so as to help the students understand the nature, features, sources and mechanisms of trust-building in the context of international business with intercultural interaction. In particular, we want to focus on the capabilities of managing the trust-building process for the success in international business.

In this novel elective course (the first in the world to my best knowledge), we explore the above five essential questions on intercultural trust and trust-building in the context of international business. To address the five critical questions as the purpose of this new elective course, we seek to integrate three constructs into one conceptual framework, i.e., asymmetrical trust, integrative trust, and acculturation as the three pillars of an integrative framework of intercultural trust and trust-building, and then apply it to the context of international business.

Specifically, based on the premise that the level and type of trust differ cross cultures, which is overwhelmingly supported by the evidence of comparative trust research, we integrate the seminal ideas of asymmetrical (culture-specific) trust and integrative (geocentric as culture-integrative) trust with the traditional construct of acculturation by positing that people and firms from different cultures tend to evoke different bases of trust with different preferences for different forms of trust as well as adopt different mechanisms and strategies to build such trust, at least so at the initial stage of intercultural interaction. However, we further argue that over time the cultural distinction will wear off toward a more or less shared trust and an integrative style of trust-building. This is the central theme of our integrative framework (see Figure 1 for details).

Based upon the integrative framework, we provide two typologies to address the specific questions about how to apply the framework to the context of international business. The first typology diagnoses the various situations where people and firms interact with each other across diverse cultures, and the second typology prescribes the specific strategies to manage various situations of intercultural trust-building in the context of international business.

In short, we seek to enhance our understanding about trust in international collaborations beyond the initial recognition of the reality that both the nature of trust and the institutional and cultural bases of trust differ across national contexts. We want to explore how asymmetrical trust evolves in the process of intercultural interaction. In other words, we explore the dynamic evolution of intercultural trust-building in the context of international business from asymmetrical trust (as the initial condition and status of trust-building) to geocentric trust (as the mature condition and status of trust-building) via the mechanism of acculturation (as the mechanism of adaptive learning).

Enhance trust-building capabilities in the cross-border context of international business via effective intercultural interaction

The overall goal of this elective is to enhance the students’ understanding and capabilities concerning intercultural trust-building in the context of managing international business activities. We can do so by providing an integrative framework and a detailed coverage of various related issues so as to help the students understand the nature, features, sources and mechanisms of trust-building in the context of international business with intercultural interaction. In particular, we want to focus on the capabilities of managing the trust-building process for the success in international business.

At the end of the course, the students should:

In particular, the students are expected to have learned the state-of-the-art knowledge and skills concerning the following critical issues:

Individual Written Project Exam

Required Textbook:

Organizational Trust: A Cultural Perspective (edited by Mark Saunders et al.), published by Cambridge University Press, 2010.

Extra Reference Books:

Colleen A. Ward, Stephen Bochner and Adrian Furnham (2001) Psychology of Culture Shock (2nd Ed.). London: Routledge. Stella W.C. Ting-Toomey and John Oetzel (2001). Managing Intercultural Conflict Effectively. California: Sage.

Further Suggested Readings:

Adler, N.J. & Graham, J.L. 1989. Cross-cultural interaction: The international comparison fallacy? Journal of International Business Studies, 515-537.

Berry, J.W. 2008. Globalization and acculturation. International Journal of Intercultural Relations, 32: 328-336.

Chua, R. Y.J., Ingram, P. & Morris, M. 2008. From the head and the heart: Locating cognition- and affect-based trust in managers’ professional networks. Academy of Management Journal, 51: 436-452.

Doney, P.M., Cannon, J.P. & Mullen, M.R. 1998. Understanding the influence of national culture on the development of trust. Academy of Management Review, 23: 601–620.

Gelfand, M.J., Erez, M. & Aycan, Z. 2007. Cross-cultural organizational behavior. Annual Review of Psychology, 58: 479-514.

Johnson, J.L., Cullen, J.B., Sakano, T. & Takenouchi, T. 1996. Setting the stage for trust and strategic integration in Japanese-U.S. cooperative alliances. Journal of International Business Studies, 27: 981-1004

Li, P.P. 1998. Towards a geocentric framework of organizational form: A holistic, dynamic and paradoxical Approach. Organization Studies, 19: 829-863.

Li, P.P. 2007. Toward an inter-disciplinary conceptualization of trust: A typological approach. Management and Organization Review, 3: 421-445.

Li, P.P. 2008. Toward a geocentric framework of trust: An application to organizational trust. Management and Organization Review, 4: 413-439.

Li, P.P. 2010a. Toward a Learning-based View of Internationalization: The Accelerated Trajectories of Cross-Border Learning. Journal of International Management (online).

Li, P.P. 2010b. Intercultural trust and trust-building: The contexts and strategies of adaptive learning in acculturation. Presented at the FINT 5th Workshop, Madrid, Spain, Jan. 28-29.

Nahavandi, A. & Malekzadeh, A.R. 1988. Acculturation in mergers and acquisitions. Academy of Management Review, 13: 79-90.

Rao, A. & Hashimoto, K. 1996. Intercultural influence: A study of Japanese expatriate managers in Canada. Journal of International Business Studies, 27: 443-466.

Takahashi, C., Yamagishi, T., Liu, J.H., Wang, F., Lin Y. & Yu, S. 2008. The intercultural trust paradigm: Studying joint cultural interaction and social exchange in real time over the Internet. International Journal of Intercultural Relations, 32: 215-228.

Zaheer, S. & Zaheer, A. 2006. Trust across borders. Journal of International Business Studies, 37: 21-29.