Inter-Organizational Governance in Uncertain Environments: Does Trust Matter?

Manufacturers in uncertain environments should rely on governance mechanisms to reduce risk involved with the environments. A question yet to be answered is which governance mechanism (i.e., unilateral or bilateral governance) the manufacturer develops in uncertain environments to manage the relationship with its supplier. This study proposes an integrative empirical model in which inter-organizational trust is a condition for affecting manufacturer’s propensity for a governance mechanism.