BUILDING TRUST IN RESEARCH-BASED PRODUCT DEVELOPMENT COLLABORATION

The purpose of this paper is to enhance understanding of the development of trust during commercial product development collaboration. It elaborates on a performance-based conception of trust by analyzing the history of cooperation between two biotechnology firms. The means and mechanisms of trust formation in the different phases of this collaboration relationship are examined. The paper concludes that secrecy, collaborative and licensing contracts were necessary precautionary measures needed by the firms to move from one phase of collaboration to another. They contributed to the formation of intentional trust between the companies but had no role in creating competence trust between them. In contrast to this, actions directly related to product development work and marketing, such as training courses, feedback from clients, parallel testing, performing the agreed duties and keeping schedules, played a key role in the formation of competence trust.