With the globalization of the market place, many crossed national boundary transactions involved and always have to deal with partners in foreign markets. Inevitably, they encounter differences in language, consumer attitudes, law and regulations, and business practices. Therefore, building trust is one of the key ways to make better transactions and increase the competitiveness, however, at the same time expecting considerable works to be done. For instant, developing trust in the international transaction requires more time and effort because of cultural differences and the inaccessibility of ethnic or informal networks.
After looking through many of related research papers, four elements (i.e.
economic-based trust, process-based trust, characteristic-based trust and institutional-based trust) have been identified and considered as sources of trust. In addition, we include a series of consequences of trust and discuss the linkage of both sources and consequences of trust. We argue that the consequence of trust varies according to its underlying contingency variables –sources of trust.
In the current thesis, we explore not only the relationship between cross boundary culture (inter-country) and trust, but also the national culture (inter-ethnic) and trust with the expectation that certain characteristics or pattern of trust building will be associated with a tendency to trust or to distrust others. Respondents were asked to express their degree of agreement with statements about their values, trust and commitment in relationship with their transacting partners from different Western, Japan, Indian, Malay (native) and Malaysian Chinese. These items were measured on a seven-point Likert scale (see Table 1 for descriptive statistics).
As we can observe from the result of analysis, the propensity to trust based upon institutional trust is universal regardless the nationality or cultural differences. In this thesis, we found that the Malaysian Chinese has higher propensity to trust Japanese more than the Western or the local Malaysian. Partly, might due to the fact that Western business practice and the Chinese’ guanxi-type systems are different types of business approach and believed to have different impacts on the trust development. Therefore, in light of the existence so many contradictory views as mentioned above between both Malaysia and Western, a mutual understanding is longed to develop for a better collaboration. However, it is interesting that the importance of trust in the relationship with Malaysian that shared the same cultural is significantly lesser than both Japan and Western.
On the other hand, at the inter-ethnic collaboration, Chinese would be willing to trust the Chinese more than other ethnical groups. As we know, Malaysia is a multi-racial society comprises of many ethnic groups, mainly Malay, Chinese and Indian. Therefore, the various dimensions of a national culture (such as collectivism, uncertainty avoidance, socio-economic discrimination, ethnicity issue) will influence the decision to trust. When deciding to trust, the Malaysian Chinese rely on the own perceptions that been influenced by the surrounding factors, even though most perspectives on trust recognize risk and cultural similarity is required for trust to influence choice. Therefore, aside from placing trust own Chinese community, they trust the Malay more than India due to the socio-economic status in the host countries.
This support the claim of Anderson and Weitz (1989) that cultural similarity increases the communication level and emphasize that cultural barriers create different
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values and make it difficult to trust the other party from other culture. For instant, the languages, societal similarity and so on.
Furthermore, in the thesis, we explore the nature of relationship in between sources and consequences of trust and the regression analysis has shown that, economic- based, process-based as well as characteristic-based of trust are the key element for businesses to adherence to contract in one transaction. On the other hand, the economic contribution in one transaction will affect the flexibility given beyond one contractual relationship. On the other hand, the analysis reveals that the intention to keep relationships in the future, reputation as well as satisfactory experiences, are the most important elements as the process-based trust influences the relationship or flexibility outside contract.
The economic discrimination by ethnicity policies aiming at improving the economic well-being of the native group in Malaysia have effectively forced many ethnic Chinese business firms to reconsider their future growth strategies in overseas. Upon consolidating themselves in their domestic economies, many Malaysian Chinese business firms begin to consider seriously diversifying their operations abroad in search of new investment opportunities that are unavailable or costly in their home countries. As a result, overall, the Malaysian Chinese giving more trust to the foreign partner than the local.
Given the dramatic growth of global strategic alliances between firms are reshaping the nature of business and inter-firm collaboration has become a crucial component of the pursuit of global competitive advantage. However, such a strategic alliance is extremely complex to manage successfully due to the high instability, poor performance, and premature dissolution and cultural distances.
Therefore, trust is believed to be a hidden resource, which could have great impact to the international collaboration. As we can tell from the analysis, whether similar or dissimilar in culture, the development of trust is still possible as Japan scores the higher trust than the Western and the local Malaysian. Therefore, in one inter-firm relationship regardless inter-country or inter-ethnic, the discussion of trust should be put into a certain specific condition whether the transacting partners’ culture is held to be more competitive, action-oriented or is relatively more cooperative, emphasizing the experience of living, and is more concerned with getting along with others and etc.
Optimistically, this study on the trust relationship between Malaysia with Japan and Western could provide some findings to the foreign investors to successfully establish mutual benefit collaboration with the Malaysian Chinese businesses. By identifying the key sources of trust and how they impact on the actions of trust could minimizing the efforts and time period to build the prosperity economic.
There are two limitation of this thesis. First, the concern over the extent to which relationships between variables may be inflated by common method variance (CMV) since the data were obtained from a single source (Marsh & Hocevar, 1988).
Second, we return to the question of whether trust within the Malaysian Chinese community is possibly driven by industry and firms’ factor. The sample had a wide variety of the nature of business, such as legal consultant/services and manufacturing industry ranging from simple technology products to higher technology products (such as sonic products). Therefore, we yet to finalize the findings of this empirical research can be generalized across all firms in all industry or whether they apply to a particular class of firms within the same industry.
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