 Gweithio i amsgwm ychydig. Roeddwn i fy ddedig i yw o'r fwlaid gyda'r Gweithio Gweithio Gweithio Mwon, Members ofeddwn, ac fel gyfnodd yn gweithio gweithio'r cyfnodd iawn, ar erbyn mewn gwirio Gymru, ac mae'r cyfrifetagion yn fwyllgor ellaethu'r gallu gyda'r bobnig, yng Nghymru a'r amser. Fy queisio gweithio gwaith am gwasanaethu, ac i chi i'n ddod i'r rhaglen. Y soes yn awgwril mae'r sefydli, y rhaid o'r pasidd, y cyfnod, y celebroi, ac y cyfnod sgolau yn yng Nghymru o'r cyfnod sgolau'r cyfnod. A i ddod i chi'n ddod i'r cyfnod sgolau, mae'n mynd i'n gweithio i ddod i'n ddod i'r cyfnod i ddod i'r cyfnod. Can I please ask you to turn off your mobile phones? Not even silent will do just in case. And please do note where the fire exits are. I'm very pleased to preside over the first of this year's inaugural lecture series. Professor Christine Outen will introduce Professor Bagman. Christine is a professor of management economics a'r ddafod o gael y dyfodol a'r ddeunydd yma yw i'r sefydliad. Mae'r ddeunydd iawn i'r FFD ac yn ymgyrch chi'n mynd i'r Cymbridg. Felly, mae'r ddeunydd iawn i'r sefydliad, mae'r profesor ymgyrch i'r mynd i'r Dynedigol i Bulsana i'r Iddolig, a profesor i'r Dynedigol i Bulsana i London. Mae'n gweithio'r profesorau i'r Dynedigol i Florence, Dynedigol i Bulsana i Dynedigol i Notre-Dame, a'r ddafodol o'r newid ymgyrch yn ymgyrch. Yn 2011, mae'n ddweud o'r profesor ymgyrch i'r FFD, a'r FFD ac ymgyrch Gweithgedigol i'r FFD. Mae'n gweithio'r profesor i'r gweithio i'r gweithio i'r FFD. Yn ymgyrch chi'n meddwl, mae'n gweithio i'r reisilio'r reisilio a'r newid i'r newid i'r newid i'r Gweithgedigol. Christine sefydlu ar y gallu FFD, mae'n gweithio'n ddod i'r Dynedigol i'r FFD ac yma'r Dynedigol i'r FFD. Ymgefaiso Mark Saunders yn ein ffrasu i'r thangos. Mark sefydlu ar y Bromingyn bysniol yng Nghymru a'r Ymgefaisol yng Nghymru, a'r profesor i'r rhain i'r mefyddiadau o'r 1 o'r octobor. A llwyfio ar yr Rhain i'r Bwrmingyn bysniol, Mark was Professor in Business Research Methods in Surrey Business School, where he was also Faculty Director of Postgraduate Research Programs. He holds visiting professorships at the universities of Malta, Surrey and Worcester and is a Fellow of the British Academy of Management and a member of the Fellow's College. His research interests include trust within and between organisations, research methods and small and medium-sized enterprises success. Mark's research has been funded by the ERC, the Health Foundation and organisations including Kingston Smith and Worcestershire County Council. He is widely published in a range of journals and has also co-authored and edited a range of books and he's joint editor for SAGE's understanding research methods for business and management studies book series and editor for Edward Elgar's Handbooks of Research Methods series. Throughout his academic career, Mark has tried to ensure synergies between his research, teaching and consultancy work wherever possible. We are very grateful to both of them for being part of this evening's event. At the conclusion of the lecture, please join us for a drinks reception in the area just outside the lecture theatre. To introduce, I think that might be Henry. Henry, your dad's not on yet, but thank you, thank you very much. I hope that was support. Thank you. To introduce Professor Bachman, I will now pass over to Professor Alton. Thank you, Valerie, thank you. Director, colleagues, students and distinguished guests, it is my great honour to introduce to you Professor Reinhard Bachman. Reinhard is a Professor of International Management and Director of the Centre for Trust Research in the Department of Financial Management Studies here at SOAS University of London. Reinhard's university education started, though, in the fields of linguistics and sociology before he moved into management and organisational science research. His conversion to management was a loss, no doubt, for colleagues in the disciplines of linguistics and sociology, but they can nonetheless take comfort from the fact that Reinhard has brought insights from their fields into management research and that management research is much the better for that. After successfully completing his PhD at the University of Dortmund, Reinhard took up his first academic post as research fellow at the Centre for Business Research University of Cambridge in 1993. It was while he was at Cambridge that I first heard about his research, though we did not meet until almost a decade later. The research he undertook at Cambridge was to have far-reaching impact on the field of management and the related fields of economics and sociology. At that time, he was working on a large, and by large I mean multi-million pound research programme on contracts and competition that was funded by the Economic and Social Research Council. The contracts and competition programme comprised a set of long-term research projects at a number of UK universities, including Cambridge and the University of East Anglia. There was a whole set of projects running over a five-year period. Word soon got out that something was afoot in this research programme. Scholars at the Cambridge Centre for Business Research, where Reinhard was working, were challenging the economic orthodoxy on why firms enter into contracts. They were also making new advances on the related question of why firms that are in competition with each other in the marketplace nevertheless cooperate with each other via formal and informal contracts in the process of creating goods and services. Reinhard's research was at the core of these advances. On the first question of why firms enter into contracts, the orthodox economic view of the day was that firms enter formal contracts when the benefits from contracts outweigh the costs and when firms need to contract because they do not trust each other. That is, firms make contracts with each other where profitable opportunities exist and where trust is absent. If firms trusted each other, so the story went, there would be no need for contracts. To put it even more succinctly, if you have contracts you don't need trust. The limitations of this perspective were soon laid bare by the work of Reinhard and the Cambridge team. They were looking at what makes both formal and informal contracts work and work efficiently. In tackling this question, they started focusing on the role of trust, drawing on work by Reinhard and joint work between Reinhard and Crystal Lane. Their research showed that trust is important in contractual relationships because it is impossible to complete contracts that anticipate all eventualities and specify hardship and penalty clauses that can respond flexibly to well-defined breaches of contract. This early study was based on inter-country comparisons and detailed empirical analysis of supply chain contracts and inter-firm relationships in three European countries, Britain, Germany and Italy. The findings were soon to turn perceived wisdom on its head. Contrary to the prevailing economic theory at that time that firms enter into contracts because they don't trust each other, Reinhard and his colleagues, Alexander Arageti and Simon Deakin, in an article published in the Cambridge Journal in 1997, but the work was completed earlier, found the opposite, namely that firms do not enter into contracts except for contracts of the simplest kind with other firms unless they trust each other. Some form of trust is an essential ingredient to make all but the simplest contracts work. Moreover, the efficiency with which contracts work depends on the degree and nature of trust. Furthermore, their careful cross-country comparisons reveal that the extent and nature of trust appears to differ across countries and cultural contexts, and there's more nuances to that as well. It differs between the micro level, the meso level and the systemic level. The conclusion that the success of contracts depends on the extent and nature of trust drew on earlier work published by Reinhard in 1996 that had already started to lead to an exploration of the nature of trust itself. It is important to bear in mind that at that time in the 1990s the field of trust research was underdeveloped. Yes, we can find mention of trust as far back as 1776 in Adam Smith's wealth of nations, but you can find almost mention of everything in Adam Smith's wealth of nations, but there's a much quoted passage that you're probably familiar with. People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in some conspiracy against the public or in some contrivance to raise prices. Adam Smith's analysis led to further work on the role of business cartels and trusts, and eventually, but centuries later, to the passing of antitrust laws in the United States and many other countries in the last century, in the 20th century, designed to prevent the negative effects of inter-firm trust and collusion on consumer and social welfare. However, until the 1990s, there was very little research on trust from a more positive perspective. Little had been done, and the little that had been done at the theoretical level didn't really recognise the multidimensional nature of trust, particularly at the meso level and the systemic level. In short, in the 1990s there was no well-defined body of work on trust. What you have are some small groups working on trust and a limited body of research papers that are published. Reinhard's work published in the mid 1990s was set to change that. His co-edited book with Crystal Lane published in 1998 was a landmark in trust research and has well over 600 citations. That book contained many papers by many of the leading scholars in trust and organisational research, including a paper by Professor John Child also then at Cambridge on Sino, which is quite fitting now for us, on Sino foreign joint ventures. I'm very pleased that Professor Child is here tonight as a special guest to celebrate Reinhard's achievements. Reinhard's single authored paper on trust, power and control in transorganisational relations published in organisational studies in 2001, has almost 800 citations. In some, his early work on trust, these are just drawing on a few papers, four papers, was truly pioneering and has garnered well over 2,000 citations. By the time I met Reinhard when we appointed him to a readership at Birkbeck, the field of trust research was beginning to become firmly established, but it was consolidated by three further landmark pieces. The first, a special issue in the journal of organisational studies in 2001 and for those of you familiar with the REF process, that is a four star international journal. The second, the handbook of trust research was published in 2006 and co-edited with Professor Axa here. That has been reviewed in the journal of organisation studies and in the academy of management review, which is probably the, if I had to name one leading journal in management research, it would be the academy of management review. A third, a two volume set entitled landmarks in trust research published in 2008, which contained 52 of the best articles on trust over the last few decades. Trust is now firmly established as a recognised field in management and business research. It has a dedicated journal and Reinhard was the founding deputy editor-in-chief of the journal of trust research. The impact of trust research can be gaged from its reach and significance in socio-economic discussions. For example, only today, the Governor of the Bank of England spoke publicly about the importance of systemic trust, a concept that was further developed by Reinhard's work, in relation to banking and finance and the confidence that the public have in the financial system. More recently, Reinhard has undertaken a research project funded by the Korean government on identity and globalization with Yonsey University, where we in the Department of Financial Management Studies have special links. This project looks at trust in Asian societies. Korea went through a rapid process of modernisation that eroded the traditional trust-based communities and the government was interested in finding out how trust could be rebuilt and how the positive aspects of Korean business identity could best be preserved in the context of globalization and westernization. They're particularly interested in measures to rebuild trust. Similar issues exist in China, where Reinhard was visiting professor at Wuhan University in 2012. The extension of his work into new areas opens up a new chapter and I was delighted when we were able to attract him to join us at SOAS in 2015. At Birkbeck, Reinhard was a superb colleague and a team player, as well as an outstanding researcher and teacher. After leaving Birkbeck, he took up a professorship at the University of Surrey and we were fortunate to attract him here to a chair at SOAS. Director, colleagues and students, it is my great pleasure to invite Professor Reinhard Backman to deliver his inaugural lecture, Trust in Business Relationships. Good evening everyone. Director, Professor Outen, ladies and gentlemen, distinguished guests, friends, family. My son has already introduced himself to you and students. I see students here also and I'm very delighted that you all have come to this hopefully enjoyable inaugural lecture. Thank you Valerie and Christine for your nice words of introduction and also thanks go to Mark Saunders, who will speak after me as a vote of thanks and John Child was mentioned, we had him over the afternoon today with us as a special guest. But there are many special guests here and I'm very delighted. I don't want to forget to thank Semphar, who has organised everything so nicely here. So tonight we are going to think about the concept of trust and as Christine has already mentioned, it's a kind of a long-standing interest of mine and I found it fascinating 20 years ago and still find it fascinating and the more you dig into this concept, the more questions arise and I really feel privileged to do research on trust in business relationships in a management context. As Christine has said, this is especially in management studies. There was hardly any interest in trust until the mid 1990s. Before there were some studies, usually experimental psychology of course, that was existing but only very few sporadic articles were around which addressed the problem of trust in business relationships. So it was really an interesting discovery of us when we started this project in Cambridge, which Christine has mentioned, we had not thought of, in the project proposal, the word trust did not appear. But when we did our interviews with managers in Germany and Italy and in the UK, they kept saying that trust is important in supplier relationships, which we were looking at. Right, okay, so what is trust all about? I sometimes invite the audience when I speak to different audiences to a mind experiment which I will do now again. Imagine that two actors meet and have absolutely no knowledge about each other and they cannot guess anything about each other, so there's absolutely no knowledge that they have about each other. What will happen in such a situation? I would suggest that not much will happen. They will not find a way to interact because they cannot make realistic serious assumptions about each other's future behaviour. Anything can happen at any moment, so is it a good idea to start any kind of interaction? I would say, I don't know what you would do, but I would probably just turn around and walk away and there would be no interaction at all. This is where the mind experiment ends, because the real world is quite different. In the real world, every day we have a lot of experiences of successful interaction. I mean, meeting tonight here in this theatre is a perfect example of how we can coordinate our expectations and interaction. You realise that an invitation can be accepted and I have an idea of how you will behave in the next hour or so and you will have some ideas what a lecture would look like, so we have expectations about each other's future behaviour. That's the real world and that's the interesting thing. We can obviously coordinate our expectation interactions to a great extent and the question then of course arises, why is that the case? How can this happen? Why can we nicely coordinate our expectations in many situations? The answer would be that there must be some social mechanisms at work which help us to do so. One of these social mechanisms which reduces complexity, which leads us away from these conditions which we see in this mind experiment that anything can happen at any time. One of these mechanisms is trust. So there is a form of trust between us. You trust that I will behave in a certain way lecturing here from this stage and I have some expectations and rule out a number of imprincipal possible behaviours on your part and vice versa. I just rule them out because I think they are not realistic. So this is what trust does. It reduces complexity. I could of course imprincipal think that some of you stand up in 10 minutes and shouted me but I ignored this possibility because I have some trust. I reduce complexity, uncertainty and that is what trust does. It reduces complexity and uncertainty because it allows for specific assumptions about the future behaviour of actors and so this is different from the mind experiment of course. A trust that makes specific assumptions about what will happen in the future, what the behaviour of other people he interacts with will look like and you are far away from this problem of the mind experiment. The mind experiment is about namely where anything can happen and this paralyzes the whole situation. There will be no interaction at all. So there is interaction on the basis of of trust. So trust is a very deep-seated mechanism to allow for specific assumptions about future behaviour of other people and to reduce this uncertainty complexity. A trust that makes a pre-commitment and does something which makes him or her vulnerable. That's part of it but on the basis of that whole social systems can evolve and without trust I would suggest we would not have without any trust we would not have very advanced socio-economic systems so I think it's a very fundamental coordination mechanism. That's the way how I look at trust. There are certainly other scholars who have other approaches. Right, so what I said is trust observes uncertainty. Another word for uncertainty is complexity in the systems theoretical perspective. So that's very nice. One of the early scholars on trust, Nicholas Luhman, even used as a subtitle of his book the word or the phrase trust as a mechanism to reduce complexity and as I said it's very similar to the concept of uncertainty from his theoretical point of view. So very nice. We can reduce complexity and we can interact in many situations like this one here. The only problem with trust is that it produces risk because any trust that can be betrayed. I invest trust in you and you betray me or you disappoint me let's put it that way so that's always possible. If that's not possible we don't need trust. Okay so that's the risk that any trust that has to bear is no way around it. There's no trust without risk and we wouldn't need trust if there was no risk. Okay but still it's a move forward if we get rid of uncertainty which paralyzes social actors where they cannot in the face of this uncertainty they cannot interact at all. On the basis of trust we interact but what we get is the problem of how to deal with the risk that our trust can be misplaced and disappointed which brings us to the next question. How can we deal with this risk? Can we reduce the risk? Can we have an idea of how big the risk is because no one would think that we need to be daredevils, we would take any kind of risk, we have blind trust in other people that would be quite silly to do. So we have got rid of uncertainty and now we have to deal with the risk and this risk should remain within certain limits at least. So the next question of course is are there, what can indicate us that the risk of trust is bearable? Some people would say now let's do a risk assessment. If you can do that in a very rational way then I think also we don't need trust. The place for trust is where we can only roughly assess the risk and not make a complete risk assessment at a rational basis. So how do we do that? Roughly assess the risk so in order to decide okay I can bear this risk, I will invest trust or in fact refrain from doing so. What I suggest is that there can be good reasons to assume that the inherent risk of trust is low enough to actually invest trust. So if a trustee sees there's risk but the risk remains within certain limits then he or she may feel encouraged to invest trust. So let's find good reasons to believe that the risk of trust does not exceed extreme levels and thus allows for trust investments. Okay what can be seen as these good reasons? What I suggest is and in fact it's not only me, I borrow these ideas to some extent from Niklas Llewman, whose work on trust is really seminal work and was published at a time where not many people were interested in but in trust but it is, has been cited and it's a very important publication. Niklas Llewman, a German sociologist whose work on trust is a small booklet, was translated into English about 10 years after it was written and together is published together with an equally small volume on power and it's called trust and power and in this book Niklas Llewman suggests that legal norms can help to assume that the risk of trust is low enough to actually for a trustee to invest trust. So in other words if there are legal norms in a business environment a potential trustee would feel encouraged and say okay I take these legal norms, the existence of these legal norms as a reason to believe that the risk that I will have to bear as a trustee is low and I will actually engage in some interaction on the basis of trust. Now you may say legal norms, if you have legal norms why do you need trust then? I think it is important in many situations and it is important to understand what Niklas Llewman means when he talks about legal norms. He does not mean that people point to the legal code and threaten other people and say if you don't live up to my expectations then something very bad will happen. This is not how he sees the role of legal norms. If that happens legal norms have failed to do their job. If they are working properly then they align people's expectations long before any conflict can arise. So if you know that there are legal norms and I know that there are legal norms and we don't want to test them but it helps us to channel our behaviour along the lines of these norms in this case legal norms but other social norms would do exactly the same job. So there are other relevant institutions especially in business relationships which we need to consider doing the same job, aligning people's expectations and allowing for coordinated expectations. In that they reduce the risk of a potential trust investment. In a business context we may think of the role of industry associations who set some norms and standards which also aligns our expectations. We can think of professional training and education standards which also give some skeleton within which we form our ideas about each other. What all these institutions have in common is that they produce shared knowledge. They produce something like a world in common to use a phrase from Garfinkel and this is what I suggest that these institutions are incredibly important in channeling the behaviour of people in certain directions which is good enough to take as a good reason to believe that the risk of trust is acceptable. Okay so wherever you have these institutions of a business system then you can have a greater hope that people will live up to these expectations that you mutually develop. Of course there are also other scholars who have a different view. You think for example about rational choice approaches. James Coleman 1919 for example suggests a mathematical equation and says as you see here on the slide if you want to decide whether you should invest trust or not then all you need is this nice mathematical formula where L is the potential loss. If you invest trust and you are disappointed you may lose something. Your reputation money whatever it is and G is the potential gain. If you successfully if you invest in a relationship if you invest trust if you say okay I'll trust this person and this person reciprocates favours that you do for this person then you have a gain a potential gain and P is just the probability that the other party will live up to your expectations and so Coleman's us basically people are calculating whether they should and can invest trust in relationships and they do it on the basis of this formula. They are very rational and say okay that's a potential loss that's a potential gain. This is the probability that I will make a gain and if on this formula on the left side becomes positive then you are encouraged to invest trust if it becomes negative you are not. Right okay so that's rational choice and that's a kind of a risk assessment on the basis of calculation which in my view has very little to do with trust. If this is possible and he compares or refers to examples which are taken from betting you can bet on horses on a racetrack for example so he would say that's what the situation is when a trustor considers to invest trust or a potential trust that considers to actually invest trust. Calculating gains and how much do you gain, win if your horse wins and how much would you lose, what you lose is quite clear namely what you put in as your bet and the chances that your horse on which you have bet it will win is indicated by P. Now I think this has nothing to do with trust only if you cannot do this if there is knowledge which you can only vaguely assess then we need trust. Here if you have situations where you can actually use this formula then I don't see where there's any kind of risk or of course there is the risk that you will not but you have all the information that you can possibly have on a racetrack. If you have more than these informations then it's certainly fraud what's going on but in the case of trust you don't have complete or information you don't have you only deal with vague knowledge and that's the place where we need to think about trust and what I'm suggesting is that in business relationships there are many situations where you cannot make a complete risk assessment so where this formula doesn't help you at all and then it counts whether or not you have institutions and norms in place in the specific business system that you're looking at and that can help and make a difference when it comes to whether or not you should invest trust in a relationship. Now of course what I'm talking about is a specific form of trust I'm talking about what some people have called system trust or institutional based trust and you all will know or have different associations with the concept of trust and many of you will say well trust isn't that between two individuals and I think this should be called interpersonal trust as opposed to system trust or institutional based trust which I was trying to explain to you so I'm not saying that there is no room for interpersonal trust in business relationships of course there is but what is very important to make business system successful is to have some systems or institutional based trust. Lynn Socker is someone who studied this empirically in a study in the United States in the 19th and early 20th century and she differentiated and found different types of trust. In the 19th century she found that business people cooperated when they had some face-to-face experiences with each other and they also cooperated and did business with each other when they found that as an immigrant society you know you can you have different ethnic backgrounds and when they found a potential business partner with similar or same ethnic background that could also was also used as as a reason to believe that the risk of trust is relatively low so it could encourage trust and enable transactions but towards the end of this period which she examined she found that something else creeped up and that was all kinds of institutions suddenly you had associations business associations the the government became more proactive in business systems and you know the financial system the federal reserve bank and so what she concluded is towards the end of this period which she looked at which was the early 20th century a form of trust came up as very important which she called institutional based trust. So what I'm suggesting is that advanced modern socio-economic systems do indeed need a relatively high level of institutional arrangements in order to produce that level of trust which is beneficial in many business relationships. Now talking about trust may seem a bit one-sided so I myself have also thought on power and you can ask the question of where the power and trust would fit together think about relationships which where you can find that trust and power goes together or relationships where you would say they explicitly show that this is these are different concepts and you cannot bring them together either you are developing a relationship on the basis of trust or in power. The answer is sometimes trust and power go very nicely together and in other situations trust and power do not fit so when does trust and power go together and when does it not go hand in hand and now I'm coming to some empirical examples to investigate this particular question and this empirical research that I did on trust in business relationships as Christine mentioned goes back two decades now and meanwhile I've done other empirical studies involving other countries but what came out about two only two sorry about two decades ago when we did a comparison between the UK and two continental European countries was a significant difference in the way how business people develop trust in their relationships now we found that legal systems are quite different if you compare the UK and continental Europe we have a civil law tradition in continental Europe and a common law tradition in the UK that means something with regard to trust building and we have different roles of industry associations which also means a lot with regard to how business people build trust in their relationships if you have a civil law tradition then you have everything nicely spelled out in a written code and in the form of if someone does something then something else happens so it's very predictable it's very clear to everyone that's not the same in the common law system industry associations in Germany, Switzerland, France are very strong and they are monopolistic they can speak for the whole industry whereas in the UK at least after the Thetoride revolution you have a number of different associations who can compete who are for-profit organisations and they cannot speak for the industry and they cannot set standards and norms for the whole industry in that sense it is less likely that they can help to reduce risk and support the development of trust in business relationships so that means that we've we guest in in in these empirical studies and and got confirmed by the answers that we got from the our interviewees in various countries that there are different different forms of trust if you only compare the UK and continental Europe and there are different amounts of trust in these systems there are different intensities of trust and there are different forms of interrelatedness between trust and power what i mean is that we have a lot of institutional based trust in continental Europe where you have strong reliable institutions and norms I'm not saying that this is this can only be seen in a positive light because there's also a criticism of over-regulated systems but in terms of trust production this is quite helpful what we saw when it comes to institutional based trust now in the UK we have more personalised forms of trust development so interpersonal trust plays a bigger role this is why you would follow your business partners or or representatives of your suppliers if this person moves to another company you would also consider switching to this company if you're the purchasing manager and this would not be the case in continental Europe where trust is not so much built on a specific person who you may know but on the system the institutions the rules all right okay so this has consequences for the amount of trust which we see in these different environments we have a lot of trust when you can sort of mass produce trust in the continental system so these institutions they mass produce trust all the time but if you don't have them then you have a lower level of trust what you then get is the question of what can replace or partly replace trust as a coordination mechanism because surely if you don't have a lot of trust you still think about what can be an alternative option to build expectations and one of the other coordination mechanisms is is power so you have more power in these systems which are regulated at a lower level and you have more trust in those systems where which are regulated to a higher level when it comes to intensities you might follow my suggestion that interpersonal trust is strong it's very strong institutional based trust if we trust each other in the face of some abstract rules might not have the same strength so in that sense you can say in the UK if you have trust is more rarely that you find it but if you have it it's a stronger form of trust on the basis of interpersonal trust whereas institutional based trust is something which comes in when you have highly regulated systems and depending where you are in highly regulated systems or systems which are regulated to a lower extent um we can also see how trust and power go together where you have interpersonal trust you also have uh usually interpersonal power and these forms of trust and power do not go together so if you have a business partner in the UK and you want to trust this particular business person then you should not think that power to introduce power in your relationship is a good idea because you at least need to be clear where you put the focus on however uh if you go into the continental system you will see that this other form of trust institutional based or system uh trust goes nicely hand in hand with system power in fact you can say that system power which is power which is ingrained in indies in the legal system in the institutions is conducive to building trust as we have just seen right so these are very different forms of trust and they can in different ways interact with power and these are important frameworks within which business relationships form and and develop right okay no um what are future directions in trust research i think um we need to um put more energy into looking at trust at the macro at the systemic level um like i have suggested in many of my publications um and move away from this idea that trust is an interpersonal uh thing it is an interpersonal thing and i'm not saying that it doesn't count it does count but um if you want to think about what makes your research relevant for policy then when it comes to uh measurements how or when it comes to ideas how to support the creativity and productivity of business systems then we need to have a wider view and look at the macro level um so which is uh trust at the level between organizations but also between society and organizations um and we need to find ways how to institutionalize the development of trust rather than leave it to individuals in every situation which is very costly if i want to develop trust with one of you and i have to go for dinner five times before we do some engage in some interaction this is a very very costly way to develop trust if we have institutional based trust that may be a less intensive form of trust but it is very cheap in fact it's for free and if you are in this well it is it's not cheap in the longer run because you have to build institutions but in the situation uh it doesn't bear any costs for you and you in many situations this might be enough trust that you need if you exchange commodities which are not very complex a box of screws then you don't and you need to have or used bicycle you need to have some trust but but you don't want to to to develop a very trust intensive relationship so therefore for these kind of transactions uh institutional trust creation or trust production seems to be most economic and useful of course there are also other relationships which business relationships where there's a high complexity of the product that is exchanged or the surfaces that are exchanged there it does make sense to develop a strong form of trust and it is not by accident i think that on the continent if you look at Germany and the industrial basis that you have rather mature capital intensive industries well developed because here institutional based trust fits very nicely and is good enough for many transactions on the basis of the complexity of the products that are exchanged on the other hand if you look into the UK you will see that a lot of high tech industries are better developed than in Germany which i think fits very nicely with the fact that you have more interpersonal ways to develop trust what we also need in the future is more longitudinal studies that means that i'm currently doing some research with a with a colleague in in Sao Paulo where we study um um trust in um in agricultural cooperatives in the coffee business and um they also feel that trust is a big issue in these cooperatives it's a large cooperative which we are looking at at the moment and uh and they said at the beginning when they were small they had a lot of trust and now trust is eroding and people don't know each other so what can they do in order to develop this agricultural cooperative further and so we are looking at the also at the lifecycle of the cooperative and see what what levels of trust and which forms of trust develop over time in in the lifecycle of such a business organisation i think this is something which has not been done enough in the past and where i think there's a lot to gain and and to understand we need to do more context sensitive research and comparative studies as i've suggested in my own research for quite some time now let me come to my last slide um which goes back to the question of um when are people interested in trust and why is it that only in the mid 1990s people got uh so fascinated by the concept of trust in management and business contexts um if we want to look into the future then we should know the past and when we look into the past then we will see that if we go longer we go back in the social sciences like a hundred years and we look at the founding fathers i think there are no unfortunately no founding mothers of social sciences at that time in the at the early 20th century then we have people like Max Beiber's bureaucratic organisation and so forth and if we ask so these people must have had an idea about trust you will find you will be very disappointed they had no idea about trust the bureaucratic organisation does not need any trust because everyone has his or her specified task and um there's not much flexibility there's not much vague knowledge in a bureaucratic organisation so therefore Max Weiber had no idea what to say about uh trust i was just recently invited in and in Heidelberg to Heidelberg to celebrate um an anniversary of Max Weber who was a professor there and they invited me and i thought like oh god what shall i say um Max Weber trust and then i gave a talk on why Max Weber did not talk about trust i think it's quite understandable in a bureaucratic organisation you certainly don't need trust only in the 1980s and 90s when we started to talk about post bureaucratic organisations with a lot of flexibility between employer employee we started to have more um um teleworking relationships and so forth and Japanese production ideas became popular quality circles and so forth where uh you know a lot of flexibility was introduced post bureaucratic organisational structures were found this is the place or the the seat bit of where where people when people suddenly discovered that trust is so important now the last idea that i want to share with you what will happen in the future is this concept of trust something which we will we will have to which will stay with us and we will do a lot more research in the next decades and uh uh or is it declining and what about the practitioners are they more and more interested in how to develop trust or not i think if you look at um socioeconomic um developments in the societies um in which we live here in europe um then we will see some trends towards a repuricratisation and we see some new corporate governance regimes and new materialism and that means or in the services industries or in the public sector we see a new public management concepts and so forth focusing on accountability transparency compliance and all the rest of it um does this mean that we don't need trust anymore i would not say that um if these concepts succeed to a large extent that they would support the idea of trust and trust research and how to create trust i do think that uh if these new models of new materialism and new corporate governance regimes accountability transparency compliance if this concept rules supreme then the ideal situation is that you have relatively isolated professionals self-organised and there's no really need for trust at least this is the theory in practice i do believe that there will be a lot of room and need for trust development why do we need trust what does accountability and transparency what does to these concepts not deliver i think you have to can have the best accountability to compliance whatever but if you don't have the possibility to build trust in relationships you will lose out on innovation and creativity because from all what we know is that in an innovative environment if you want to successfully create new ideas you do need trust this is where we need trust in the academic system and cannot just focus on these ideas of accountability transparency and so forth we need to have trust and flexibility in order to be creative and i think that's the end of my talk thank you director professor orton distinguished guests friends colleagues not henry because he's not in the room at the moment but i'm really honoured to be able to give the vote a thanks to Reinhardt thank you so much for asking me we've had what can only be described as an insightful and thoughtful lecture which has really made us think about the future of trust research but also what trust is and how it can impact and we've had it from a person who is one of the most widely cited scholars in trust who has written seminal papers with 800 or so citations books edited the journal in the area and his work does have impact and that's not just impact in a uk or a european field but across the world we've heard already about career and china what he's been talking about this evening is at the core of successful long-term business trust at this institutional level actually offers a means of absorbing the uncertainty and reducing complexity a way of coping with risk was without risk there is no trust and we've seen how institutions can actually be reducing risk and providing that share knowledge and about patterns of social behaviour but then of course we have to trust these institutions i mean we only have to look around the world to say the see the importance of this trusting of institutions and what happens when it goes wrong and i'm not going to mention a car maker but there are plates that we think about Lehman Brothers and other organisations as well and have resulted in financial crisis he's highlighted and stressed this importance of looking beyond interpersonal trust between individuals and in particular of looking at trust within that institutional environment and understanding within that broader institutional based context and this key is absolutely key to actually looking towards the future of trust and actually how it can support the business world into the future he's also offered us an agenda for research which we can see how this is actually going to enable policymakers to make interventions to support trust and look at trust in the at the macro level the link and the interplay between interpersonal institutional arrangements and within this the role of power and how this differs in different countries around the world he's emphasised the need for institutions to be seen as guarantors of trust and the need for us to be able to look for ways to actually instal trust in the fairness of unknown collective actions people like trusting bankers actions politicians and the need for this in rebuilding trust he's emphasised the need for longitudinal studies and comparative studies most of all he's emphasised the need to better understand how the institutional environments channel behaviours of actors to trust in other words enabling people to deal with the complexity which will then allow them to trust and within this the role of power structures and frameworks Reinhart you've offered us real rich insights and argued for a rich and exciting future research agenda which is not only intellectually stimulating but is also impactful on the world of business something to say we are doing research which is not only interesting but actually useful can you please enjoy me with thanking Reinhart in an all manner