Paper info

Trust as a Counterweight to Risks within the Development Process of Inter-Organisational Relations in Russia

Marina Weck

The paper was published at the 25th IMP-conference in Marseille, France in 2009.

 Although the global financial crisis emerged in September 2008 has caused a dramatic fall in business activities of Finnish companies in Russia, the Russian market is still remaining attractive and building successful relationships with the local reliable partners became an increasingly important strategy for many of Finnish construction companies operating in Russia. Having relationships with Russian partners under the current conditions of uncertainty of Russian market environment, foreign companies are involuntarily exposed to certain risks. These risks can never be entirely eliminated, but to a large extent as literature suggests trust plays an important role in counterbalancing them. The research aims at deeper understanding the role of trust as a counterweight to risks perceived in different stages of inter-organisational relationships development between Finnish and Russian construction companies. This paper offers a conceptual model and propositions on the nexus between trust and risk and its affect on the inter-organisational relationship development. In the concluding part of the paper the tentative results of the empirical part of the study are introduced.