How the yin-yang perspective dissolves the power and trust paradox and leads to collaborative business relationships //
It becomes increasingly visible that to a lesser extend single companies but international supply networks, or meta-organizations, will increasingly compete with each other in the future. The governance of these networks poses new challenges to focal firms as well as surrounding organizations in terms of collaboration and management. Hence, the quality of collaboration can become a source of differentiation in competition to gain or maintain a competitive advantage through cooperation. Whereas contracting is usually applied to enter a collaborative relationship, the existing literature points out that relational or interpersonal factors are especially important factors for successful collaboration in business. Herein, power and trust play a pivotal role and are often seen as orthogonal components in a business relationship. The latter is either determined by power differentials or by deep trust. Both can hardly merge. While buyers or suppliers commonly show their power through contracts to motivate particular actions with their exchange partners, doing so can compromise a sense of trust within the relationship. This happens because organizations and managers over whom power is being exerted may feel that their autonomy and overall self-determination are being threatened, a perception which often leads these partners to feel that their values and motives are incongruent, which can compromise their mutual sense of trust and cooperation.
“Contrary to the conventional antagonistic view of power and trust, we find a different relationship between both, namely a rather natural, mutually integrative and dependent one”
By challenging the typical antagonistic view of power and trust, we have explored in our study the interrelatedness of the two by applying the yin-yang lens. We find a different relationship between power and trust, namely a rather natural, mutually integrative and dependent one. We assume that Taoist ideals, in particular the forces of yin-yang, explain this apparent contradiction. Guided by the yin-yang perspective on power and trust balancing, we identify six management paradigms regarding how power and trust relationships can be developed and managed to increase collaboration performance.
“We identify six management paradigms regarding how power and trust relationships can be developed and managed to increase collaboration performance”
In a nutshell, the six management paradigms contain the following. The focal firms shall maintain (1) a relationship and competence focus. It should (2) proactively delegate tasks to a trustworthy and competent tier 1 supplier. Further, the focal firm needs to engage in (3) setting up and organizing ‘formally informal’ private events to increase the community spirit and (4) establish a spirit of paternalistic benevolence across the network, in which the hierarchy is considered to be natural, comforting, and reliable. Next, (5) a spirit of open information sharing, collaboration, and unconditional passionate commitment on business-level and private-level needs to be developed. This may be the hardest part, especially for firms drawing on Western ideals of corporate governance. Finally, (6) great emphasis should be placed on personal interaction, as being committed to developing and maintaining human relationships is fundamental to a business relationship.
We believe that utilizing the yin-yang perspective can enable a new view on relationships that may help to increase network cohesion as well as organizational performance within a business ecosystem.
Horak, S. & Long, C. 2018. Dissolving the Paradox: Toward a Yin–Yang Perspective on the Power and Trust Antagonism in Collaborative Business Relationships. Supply Chain Management, 23(6), 573-590.
* Photo credit: Micro Ecosystem by Pierre Pocs is licensed with CC BY-SA 2.0.