The value of trust in project business

1. The value of trust in project business Summarized from.: Smyth, H., Gustafsson, M., and Ganskau, E, 2010, International Journal of Project Management, 28, p. 117-129. 指導老師: 吳思佩 教授

2. Our Members • 951612 張豐疇 ‧ 951616 李采霞 • 951627 蔡宗霖 ‧ 951633 張嬡真 • 951634 趙子萱 ‧951636 陳佑昇 • 951640 柯廷蓁 ‧951642 江中強 • 951649 陳喻農 ‧951660 黃梅奇

3. Introduction 951616 李采霞

4. Introduction • This paper addresses the question of the value of trust in project businesses • particularly the value trust brings to projects. • The aim is to work towards establishing value for trust on the supply side and to the customer. • One of the obstacles to doing so originates with the theoretical approach to conceptualising trust in the positivist tradition. 951616

5. Introduction （cont.） • The objectives of the paper are to: • (i) argue that trust is not a rational judgment, thus, not a calculation; • (ii) show trust is socially constructed from learning and subjectivity; • (iii) to show judgements informed by trust provide a realistic and viable basis for developing confidence; • (iv) show trust provides a realistic and applied basis for proceeding with business decisions. 951616

6. Context: the case of project business 951642江中強

7. Projects are becoming more complex 951642 • Demands from customers upon suppliers are greater than at any previous time. • The areas of uncertainty and attendant risk are proportionately increasing. • The technical scope is growing and will have more specialist requirements. =>Outsourcing

8. Outsourcing 951642 • Outsourcing has the perceived benefit of risk spreading. • Advantages of outsourcing: • Save costs : capital, time , infrastructure and manpower • Concentrate more on your core business • Get access to specialized services • Improved customer satisfaction • Reduce risk

9. Customers have come to expect superior added value 951642 • Many of the repeat business customers are sophisticated procurers. • Most sophisticated project customers are used added value as parameters across the full range of procurement activities . • Cooperation with members in value chain can provide superior added value.

10. Increases demands upon cooperation 951642 • Organizational and inter-organizational cooperation operates to a large degree upon trust. Therefore, the effectiveness and efficiency of tasks and activities is dependent upon the depth of trust. • Trust is necessary between organizations in order to preserve and develop quality in the project in the face of unforeseen events.

11. Trust theory overview 951660 黃梅奇 951627 蔡宗霖 951636 陳佑昇 951649 陳喻農

12. 951660 黃梅奇

13. The search for absolutes and imperatives in philosophy has mean what？ 951660 Trust has not been a central part of philosophy over many centuries But, the end of the last century this began to change.

14. What is change about Trust？ 951660 • Trust was begging to occupy a more central position. • Particularly filtering through from • Psychology • Sociology • Theories of organisational behavior • Some parts of economics

15. Two tradition have emerged epistemologically 951660 • Neoclassical tradition • Tend towards adoption of the former position. • Interpretative tradition • Tend towards seeing trust as foundational in forming and maintaining relationships.

16. Trust is not some rational or irrational risk calculation 951660 Trust is filling the uncertainty But,the belief in the other party being a sound basis on which to proceed to seek positive or good outcomes

17. Trust is not some rational or irrational risk calculation （cont.） 951660 Trust informs an assessment of a situation and an important part of the way judgment judgment is dependent upon a range of factors，the factor is helpful, potentially reducing uncertainties and attendant risks

18. How helpful to the other person depends on what？ 951660 Depends on: 1、 The expectations 2、 The judgment about the relation-ship

19. Two elements to this information 951660 The disposition and attitude of the trustor. The question of perspective of the trustor of both situational factors and the relationship factors and the relationship factors.

20. 951627 蔡宗霖

21. Trust theory overview • Willingness to trust • Study of trust • Literature about trust • Problem of trust in projects 951627

22. Willingness to trust • Willingness to trust is informing a judgment. • It is not a judgment per se based on previous personal experience. • This is intuitive and subjective, just as the relationship between trustor and trustee is subjective. 951627

23. Willingness to trust （cont.） • The Willingness to trust to be vulnerable, which becomes a social investment. • But it is not an investment that carries the same risk profile that prevails with traditional economics and transaction cost analysis. 951627

24. Study of trust • Objects of study cannot always be formed or necessarily known cognitively, trust being an example. • We can get to see how people are is by looking at their interaction and association with other people to study trust. 951627

25. Study of trust （cont.） • Trust is in evidence indirectly through behaviour and is experientially assessed. • The calculative position is therefore misconstrued. 951627

26. Literature about trust • Most literature sees trust as a positive and rational construct that is largely derived from cognitive learning and assessment. • The problem with this traditional view is that trust is perceived as dangerous in much of the literature。 951627

27. Problem of trust in projects • In reality uncertainty and ambiguity prevail, especially in projects. • Projects are in uncertain environments and people do not always behave in predictable ways. 951627

28. Problem of trust in projects（cont.） • The Vulnerability of trust is problematic and invokes fear and insecurity. • People do not perform well under prolonged conditions of insecurity and fear. • So many people first look for good reasons to trust rather than doubt (or at least not distrust) 951627

29. 951636 陳佑昇

30. Types of trust • There have two types of trust about the party • Tangible： • engaging with and mediated through personal and organisational relationships. • Intangible： • conviction、good reputation

31. The presence of a trusted party • reduces subjective risk • The bias or Inadequate knowledge about people. • reduces objective risk • Enhance the relationship between the two organizations. • improve the service and content quality

32. What will be happen if the trustor not trust you? • Will lead the trustor can not tell the truth situation to you. The product will be worse than expected. • Most people are selfish opportunists, they will likely flow to other party.

33. It is not always bad about the distrust • If you do good measures for communication and regain the trust of trustor, the trustor will more trust you and the relationship between the two organizations will can more stable. Why?

34. Dynamic aspects of trust development (pic.) Trust Confidence • personal propensity to trust and organisational norms and conditions for trusting tangible and behaviou-ral evidence • Potential for increasing expectations in repeat business no relationship evidence zone of interpretat-ion Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

35. Dynamic aspects of trust development • STAGE1：The organization have the norms and routines embedded in the culture. • STAGE2：Trust may then be explored and inform a judgement.

36. Dynamic aspects of trust development（cont.） • STAGE3：Interpretative factors come into play.Stage1 and stage2 are unfolding. • STAGE4：Confidence is more cognitive, hence the probability element. • STAGE5：Have the more business than expectations.

37. 951649 陳喻農

38. Trust 951649 This does not proceed with calculative or mechanical precision or determination. It is open to subjective interpretation, which can be a mix of current tacit and explicit perceptions.

39. Fig. 2. Differing views of supplier’s project track record. 951649

40. Positive & Negative view 951649 both parties share the same perception of the core four events or projects. The outlying events may even be the same for both parties, yet the interpretations differ

41. Positive & Negative view （cont.） 951649 • These conditions are affected by investments in certain inputs, which are behavioural intents that can become organisational capabilities or competencies for the supplier: • integrity, receptivity, loyalty, discretion and openness.

42. Positive & Negative view （cont.） 951649 • These inputs are designed to produce outputs that enhance value for the customer: • consistency in service provision and product quality, promise-fulfilment, fairness, competence, and availability

43. Dynamic aspects of trust development (pic.) Trust Confidence • personal propensity to trust and organisational norms and conditions for trusting tangible and behaviou-ral evidence • Potential for increasing expectations in repeat business no relationship evidence zone of interpretat-ion Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 951636

44. Fig. 3. Self-reflection for relationship trust. 951649

45. Self-reflection 951649 Self-reflection is part of the process of turning the relationship generally and trust specifically into social capital, that is, trust as part of the relationship value, hence asset to the customer, and trust as goodwill and reputation in the wider marketplace.

46. Self-reflection （cont.） 951649 self-reflection provides linkage and a basis to other conceptual areas for further management development

47. Trust on projects and in project business 951612 張豐疇 951634 趙子萱

48. 951634 趙子萱

49. Some of the studies of trust have alluded to value issues • High trust levels across a project design team and with the client was perceived to be reducing transaction costs and maximizing creativity and problem solving. (Smyth, 2005) • A lack of investment in trusting relationships across a series of PFI projects was starting to directly increase transaction costs and indirectly increase operational costs. (Smyth and Edkins, 2007; see also Edkins and Smyth, 2006) 951634

50. The empirical data on value • The data is from two sources ： • CROL (Corporate Relationship On-Line) • A process for monitoring, analyzing and acting on customer/supplier feedback. • Large complex projects collected through 333 interviews from around the world. • Trust and trust-related issues. • The main focus is attention to customer benefits in general and value in particular. 951634