Conditions Supporting Trust Development in Relation to the Perceived Risks in Finnish-Russian Business Relationships

Despite the continuing increase in international business over the last few decades and general recognition that trust is a key attribute of successful cooperation, our understanding regarding trust development and risks in the context of intercultural business relationships remains limited. Thus, the primary aim of this research is to contribute to the understanding of how trust development can be supported in relation to potential risks perceived in different phases of relationships between the Russian subsidiaries of Finnish firms and their Russian partners operating in the Russian construction market. This qualitative research took a structured approach in the exploration of complex research questions. The theoretically grounded concepts and the initial conceptual framework were employed to direct the inductive empirical investigation and theory building. The empirical part of the research consists of three studies: Pilot, Main and Supplementary. The Pilot study provided a preliminary understanding of the research questions. The primary focus of the Main study was on the conditions that support trust development in Finnish-Russian business relationships and the role these conditions play in relation to risks. The study also highlighted that a higher level of trust is needed in order to be able to accept relationship risks and raise the willingness to cooperate. A decisive role was ascribed to trust-constituting conditions, which are directly related to the growth of trust and are, to a great extent, in reverse relationship with risks. Further, the most critical conditions and risks in terms of their impact on the level of trust were demonstrated. Among the identified conditions, cultural adaptation was found to be particularly significant. This was explored in depth in the Supplementary study. The research contributes to the scarce literature on trust development in an intercultural business relationship context. It sheds more light on the conditions that directly and indirectly support trust development and their role in relation to relationship risks by bringing forward an integrative perspective. This research also contributes to international management literature. In particular, it adds to the literature on uncertain institutional contexts, such as the Russian business environment, by introducing the conditions supporting trust and the risks perceived in the different phases of relationship development with Russian firms. The research has also practical implications that benefit managers who are about to or are contemplating to bring their business into the Russian market. Specifically, the findings can be used as guidelines and practical tools for establishing and sustaining trust over time with Russian business partners. The scope of identified risks offers a valuable knowledge base for successful decisions in managing relationships with Russian partners.