Strat.

Change 12: 367–379 (2003)

Published online in Wiley InterScience
(www.interscience.wiley.com). DOI: 10.1002/jsc.648 Strategic Change

Measuring goodwill trust between

groups of people: three years of an
oil industry alliance
Richard Green*
Aberdeen Business School, UK

 The period from 1993 to 1998 saw the UK’s upstream oil and gas industry move towards
more collaborative relationships (partnering and alliances) between the oil companies
and their contractors.
 This paper is derived from observation over three years of an alliance between an oil
company and five of its contractors involved in underwater projects.
 The paper uses concepts of ‘goodwill trust’ and ‘obligational contractual relationships’
which have been introduced by Sako.The ideals of obligational contractual relationships
are very similar to those of the collaborative relationships between companies in the UK
upstream oil and gas industry in the 1990s.
 Attitude surveys of members of the alliance in three consecutive years attempted to
estimate the levels of goodwill trust between the people and companies in it.
 It would be expected that trust levels within an alliance would rise over time as people
gain experience of working with each other. Analysis of the results from the survey did
show an overall increase in goodwill trust over the period but also showed some
company pairs where trust levels remained low.
 The paper speculates that the reasons for reduced levels of trust could include: the
experiences inherited from previous relationships, project successes or failures affecting
the way people felt about each other, perceived lack of fairness in allocation of risks
and rewards, and changes in senior management.
Copyright © 2003 John Wiley & Sons, Ltd.

Introduction results are based on part of an attitude survey

This paper concerns measurement of ‘good-
will trust’ (Sako, 1992) between people
involved in a large alliance of oil industry com-
panies and variation in levels of trust over
three years in the life of the alliance. The
* Correspondence to: Richard Green, Room C304a,
Clarke Building, The Robert Gordon University, School-
hill, Aberdeen AB10 1FR, UK.
E-mail: r.l.green@rgu.ac.uk
of people in the alliance, which was carried
out in three consecutive years. The paper pro-
vides some background on the evolution of
alliances in the oil industry and the role of
trust in alliances. It then presents Sako’s
description of ‘goodwill trust’ and discusses
how it might be measured. Analysis of the
‘goodwill trust’ sections of the attitude surveys
is then presented together with a discussion
of the value of the work and the conclusions
that might be drawn from it.

Copyright © 2003 John Wiley & Sons, Ltd. Strategic Change, November 2003
368 Richard Green

Alliances in the UK offshore oil and Trust in alliances

gas industry
When critical success factors for collaborative
relationships are discussed, the importance of
The UK offshore oil industry is concerned
high levels of trust between the people and
with exploration and production of the oil and
companies involved is often stressed. Kanter
gas fields on the UK Continental Shelf. The
(1994) suggests that ‘Mistrust, once intro-
industry is made up of about 30 oil companies
duced, sets off a vicious cycle. It makes
(operators) that are supported by a similar
success harder to obtain . . .’. Morgan and
number of very large contracting companies
Hunt (1994) quote Sherman (1992), ‘The
and many smaller subcontractors.
biggest stumbling block to the success of
Over the last 25 years the offshore oil indus-
alliances is the lack of trust’, Schurr and
try has made a significant contribution to the
Ozanne (1985), ‘Trust is central to the process
UK economy through expenditure, employ-
of achieving co-operative problem solving
ment and government revenue from taxation
and constructive dialogue’ and Spekman
(DTI, 2001). Finding and producing oil and gas
(1988), ‘Trust is the cornerstone of the strate-
from offshore fields present complex engi-
gic partnership’. Green and Keogh (2000), in
neering and logistical challenges. The seawater
a review of 63 papers from commercial
can be up to 480 m deep and the oil and gas
conferences on oil industry partnering and
must be extracted from reservoirs thousands
alliancing, found that the link between success
of metres beneath the seabed. Operating con-
and high levels of trust was made in 23 of
ditions can be harsh and potentially hazardous
the papers.
due to weather and sea state, high pressures
Within an alliance, trust is said to be a criti-
in the reservoirs and the flammability of the
cal success factor but it is also a key outcome
hydrocarbons involved. The operators rely
of successful collaboration. Morgan and Hunt
heavily on specialist contractors to supply the
(1994) in a discussion of relationship market-
many services needed to support their opera-
ing (an analogue of alliances) suggest that
tions. Thus the operators and the contractors
commitment and trust are key mediating
need to work together closely to ensure that
factors in the success of a marketing
the work is done while preserving the safety
relationship.
of the people involved and minimizing the
probability of damage to the environment.
In the early 1990s, the UK offshore oil indus-
try was in a position where the future prof-
Within an alliance, trust is
itability and attractiveness of the industry
were becoming doubtful, because of rising said to be a critical
costs and falling oil prices. One of the reac- success factor
tions to this situation was a move from the
then adversarial relationships between the
companies to a much more collaborative
Defining trust
approach. The industry recognized that it
would be mutually beneficial to work to- Many definitions of trust can be found in the
gether to reduce costs, to eliminate wasteful literature. Sako (1992) suggests that, ‘Trust is
practices and to increase the value of the a state of mind, an expectation held by one
operations. Many collaborative groupings trading partner about another, that the other
(partnering and alliances) were formed behaves or responds in a predictable and
between companies (operators and contrac- mutually acceptable manner’. Powell (1990)
tors) to deliver specific projects or to support states that, ‘Trust is a remarkably efficient
ongoing production operations (Green and lubricant to economic exchange that reduces
Keogh, 1998). complex realities far more quickly and

Copyright © 2003 John Wiley & Sons, Ltd. Strategic Change, November 2003
An oil industry alliance
economically than prediction, authority or
bargaining’. Sabel (1993) states that, ‘Trust
is the mutual confidence that no party
to an exchange will exploit another’s
vulnerabilities’.
Many of the definitions emphasize that trust
involves the person who gives the trust allow-
ing themselves to become vulnerable to the
actions of the person or persons they are trust-
ing and thereby taking a risk. Coleman (1990),
cited by Moorman et al. (1993), suggests that:
‘Trust has been viewed as a behavioural
intention or behaviour that reflects a
reliance on a partner and involves vulner-
ability and uncertainty on the part of the
trustor’.
On the other hand, in her recent BBC Reith
Lectures, O’Neill (2002) suggests that the rela-
tionships between organizations are affected
by the level of suspicion between them rather
than lack of trust. In the context of the col-
laborative relationships discussed in this
paper, trust of one individual for another
individual or group of individuals could
perhaps be defined as:
A willingness to allow another person or
group of persons to take unchecked and
unsupervised decisions or actions which
could have beneficial results on revenue,
costs, asset condition, safety, or personal
livelihood, but which could also have
potentially damaging effects on safety,
revenue, costs, asset condition or personal
livelihood.
Types of trust
Many authors offer possible classifications of
types of trust; for instance, Sako (1992) offers
three types — ‘competence trust’, ‘contrac-
tual trust’ and ‘goodwill trust’ — which will
be discussed in more detail in the next section.
Other authors, notably Barney and Hansen
(1994), Zuker (1986), Lane (1998) and Shapiro
et al. (1992) all add their own variants of the
types of trust relationships. The research
described in this paper is based on the
typology offered by Sako.
Copyright © 2003 John Wiley & Sons, Ltd.
369
Sako’s three types of trust
The statements used in the attitude survey
described in this paper were strongly influ-
enced by Sako (1992). Sako notes that:
Trust in buyer–supplier relationships
seems to bring about X-efficiency-enhancing
and transaction-cost-reducing outcomes,
whereas expectations of opportunistic
behaviour have the opposite effect. (X effi-
ciency is the gap between actual produc-
tivity and the maximum attainable)
She goes on to suggest that trust is a state of
mind, an expectation held by one trading
partner about another, that the other behaves
or responds in a predictable and mutually
acceptable manner. The different reasons
for predictability in behaviour lead Sako to
distinguish between three types of trust:
 Contractual trust or trust that each adheres
to specific written or oral agreements . . .
predicated on both trading partners uphold-
ing a universalistic ethical standard, namely
that of keeping promises.
 Competence trust which concerns the
expectation that a trading partner will
perform its role competently.
 Goodwill trust that is of a more diffuse kind
and refers to mutual expectations of open
commitment to each other. Commitment
may be defined as the willingness to do
more than is formally expected.
The attitude surveys on which this paper is
based attempted to measure the levels of con-
tractual trust, competence trust and goodwill
trust in the alliance over three years. However,
the scope of this paper will be confined to
goodwill trust. In discussing goodwill trust,
Sako (1992) suggests that someone who is
worthy of it is dependable and can be
endowed with high discretion, as he/she can
be trusted to take initiatives while refraining
from unfair advantage taking. She quotes
Gambetta (1988) that in this sense, trusting
behaviour consists of taking actions which
Strategic Change, November 2003
370
increase one’s vulnerability to another whose
behaviour is not necessarily under one’s
control.
Sako states that what distinguishes goodwill
trust is the expectation that trading partners
are committed to take initiatives (or exercise
discretion) to exploit new opportunities over
and above what was explicitly promised. She
suggests that trust implies the absence of
opportunistic behaviour, whereas the sus-
picion that a trading partner may be cheating
or taking advantage amounts to distrust. An
example of opportunistic behaviour in a good-
will trust context might be withholding a vital
piece of information that may determine the
commercial success or failure of a risky
project. In discussing the verification of
whether a trading partner is worthy of
trust, Sako suggests that goodwill trust is more
contextual and therefore verifiable only in
particularistic settings. A buyer and a supplier
have to start trading and see if they entertain
shared principles of fairness and convergent
expectations about informal obligations.
Sako describes ‘Arms-length contractual
relationships’ (ACR) between buyers and sup-
pliers and ‘Obligational contractual relation-
ships’ (OCR), where these seem to have the
characteristics of the collaborative alliance-
style relationships which the UK oil industry
was embracing in the 1990s. She suggests that
the central difference between ACR and OCR
is in goodwill trust, which exists only in OCR
relations. OCR relies heavily on goodwill trust
and OCR traders deal with both anticipated
and unanticipated contingencies by reference
ultimately to a particularistic effect (emotion)
that may be a source of moral commitment to
persevere in adverse conditions.
After a later study Sako (1998) hypothesizes
that goodwill trust would have the strongest
impact on performance because the extra
edge which goodwill trust offers over and
above the formal governance structures of
contracts or hierarchies is learning and con-
tinuous improvement, not merely making
savings in transaction costs. She concludes
from her study of automotive suppliers that
there is evidence that trust is associated with
Copyright © 2003 John Wiley & Sons, Ltd.
Richard Green
supplier performance particularly in just-in-
time delivery and continuous improvement.
Trust is associated with
performance and
continuous improvement
Trust between individuals
or institutions
It is easy to conceptualize the idea of trust
between individual people but the idea of
trust between companies, or of trust by an
individual for a company presents more diffi-
culty. We can hypothesize that an individual
might trust an organization because of his or
her knowledge about the kind of people
employed there or about the procedures,
checks and balances which would prevent
advantage-taking behaviour. However, the
statement that Company A trusts Company B
is difficult to interpret. A more useful state-
ment might be that: The people in Company A
trust the people in Company B and therefore
trust between companies could perhaps be
thought of as the aggregate of the trust
between the individuals in those companies.
Trust should increase
with experience
We have seen that the literature emphasizes
the importance of trust for the success of
alliances and team working. The literature also
suggests that levels of trust should increase as
people gain experience of working together.
Zucker (1986) identifies process-based trust
that develops from concrete experience of
social and/or economic exchange and is
brought as an expectation to future transac-
tions. Lane (1998) discusses cognitive trust
arising from commonly shared values or
norms. In an alliance where emphasis is
placed on teamwork, shared objectives and
free flow of information, it would be reason-
able to expect that trust between individuals
Strategic Change, November 2003
An oil industry alliance
from different companies would increase as
the alliance proceeds. Sydow (1998) describes
a slightly different aspect where if trust is sus-
tained, it gives the actors even more power
and opportunities to reproduce trust. This was
labelled ‘a self-heightening cycle of trust’.
Nevertheless, Sydow also mentions the
possibility of a ‘spiral of distrust’.
The results described in this paper arise
from a unique opportunity to observe the
evolution of a major alliance in the upstream
oil industry over its lifetime.
The alliance on which this research
is based
This paper is based on research on an alliance,
created in 1994, between an oil company (the
customer) and five major contractors. All the
companies had previously had long-term rela-
tionships with the customer. Several of the
contractors within the alliance were and still
are direct competitors in the open market. For
reasons of commercial confidentiality, the six
companies are identified in the paper as com-
panies A through to F, where company E is
the customer.
The alliance was terminated during restruc-
turing of relationships following the period of
low oil prices in 1998 and this paper is based
on data from attitude surveys of people in the
alliance in 1995, 1996 and 1997. The main
activity of the alliance was the execution of a
series of complex engineering projects that
involved work on and beneath the seabed, in
water depths of about 100 m. Successful com-
pletion of the projects was vital to the pro-
duction of oil and gas from the customer’s
fields. The success of an individual project was
defined in terms of the quality of the work
done (long-lasting production capacity), the
safety and environmental performance, the
time taken and the final cost. Each project
involved many different engineering disci-
plines and success depended on close co-
ordination of construction activities, logistics
and the supply chain for major equipment
items. The activities of the alliance were
vulnerable to bad weather and success was
Copyright © 2003 John Wiley & Sons, Ltd.
371
always vulnerable to shortage of good infor-
mation about the conditions under which the
work was to be done. Any problems, errors or
delivery of defective equipment to the off-
shore work site could result in significant
delays in completion of the projects, with the
concomitant increased costs and delays to
start of the customer’s revenue flow. The com-
panies were all involved at the design and
planning stage of each project but their prin-
cipal effort came at different stages through
the project. Nevertheless, the success of a
project depended crucially on the actions of
each of the alliance companies. The aim of
alliance companies was to work together to
obtain a significant reduction in the cost of
the projects while maintaining or improving
the quality of their execution.
The alliance executed a series of parallel
projects and its workforce was organized in
teams. Each team contained representatives
from the alliance companies, including the
customer, and was largely responsible for
planning and detailed execution of its own
projects. The teams contained people working
both onshore and offshore. At its peak, there
were eight teams working in the alliance. The
overall working of the alliance was nurtured
by a group of very senior managers from the
customer and contracting companies, which
met at least once per month. There were
various changes in the senior managers of the
alliance companies over the life of the alliance
and the senior manager of the customer
company changed between the second and
third years of the alliance. Within the alliance
there was considerable investment in team
building and coaching in collaboration, both
at working and senior management level.
Senior managers put much effort into creating
an alliance identity with logos, posters and
gifts for those involved.
There was a risk–reward structure, which
enabled the alliance contractors to gain when
performance was improved, but which also
penalized them if performance fell below
target. The form of the risk–reward structure
was changed between the second and third
years of the alliance life. During the life of the
Strategic Change, November 2003
372
alliance there were some spectacular suc-
cesses, where careful planning and close co-
operation allowed projects to be completed
substantially faster and at lower cost than had
been achieved previously. For these projects
the companies and in some cases the people
received substantial bonuses. There were also
failures, where knock-on effects of technical
problems caused projects to overrun the time
and cost targets considerably. For these pro-
jects, bonuses to companies and people were
not paid.
Research activity
The research aimed to monitor the evolution
of the alliance through its lifecycle, by execu-
tion of an attitude survey of the people
involved each year.The attitude surveys set out
to measure the alliance members’ belief in the
value of the alliance at present and in its future
success and they also aimed to measure the
level of trust between people from each of the
member companies.
Measurement of trust
The main objective of this paper is the
measurement of goodwill trust between the
companies of the alliance. An earlier section
suggested that trust between companies might
be stated in terms of the aggregation of the
trust between the individuals in the compa-
nies. When using a set of questions to measure
levels of trust between n individuals, the ideal
method would be to ask each person to
comment on the other n - 1 people. Analysis
and aggregation of the responses could then
be carried out as desired. The need to name
each person on the questionnaire becomes dif-
ficult when there are many people involved.
The approach is also complicated by the need
to ensure that everybody completes the ques-
tionnaire and by people’s reluctance to
comment on named individuals.
Accordingly, the method adopted in this
study was to ask each person to comment
on their general experiences with people
belonging to their company and with people
Copyright © 2003 John Wiley & Sons, Ltd.
Richard Green
belonging to the other companies in the
alliance. Thus the need to name individuals in
the questionnaire was removed and the task
of data collection became easier. However, the
opportunity to analyse relationships between
all possible pairs of individuals was lost.
Questionnaire
There were four basic statements in the
questionnaire, which related to goodwill trust,
as follows:
 The people I deal with in ·company nameÒ
will do whatever is necessary to ensure
the success of the alliance even if it in-
volves tasks to which they had not agreed
previously.
 The people I deal with in ·company nameÒ
will not withhold any information that I
need to help me perform well in the
project.
 The people I deal with in ·company nameÒ
will not exploit to their advantage any tem-
porary weakness of my company or myself.
 If I have a problem that can influence the
success of the alliance, the people I deal
with in ·company nameÒ will work hard to
help me solve the problem.
Each statement was made about the six com-
panies in the alliance, so that 24 statements in
the questionnaire related to goodwill trust. A
person was asked to indicate their level of
agreement with each statement by scoring as
follows: 1. Strongly disagree, 2. Disagree, 3.
Neither agree nor disagree, 4. Agree, 5.
Strongly agree. The wording of the statements
was designed in the first year and was retained
in each of the subsequent years to ensure
comparability.
Analysis
The assumption is that by scoring the state-
ments, each person (respondent) indicates the
level of trust they place in the groups of
people with whom they work in their own
company and in the other companies of the
Strategic Change, November 2003
An oil industry alliance 373

alliance. Thus, the following data items are Table 1. Internal consistency of responses on goodwill
associated with a response to each statement: trust towards each company

Responses to statements on Cronbach’s alpha

 The year. goodwill trust towards:
 The company to which the respondent
belongs (the trust-giving company). Company A 0.81
 The target company implied by the question Company B 0.85
Company C 0.91
(the trust-receiving company). Company D 0.86
 The response (strongly disagree to strongly Company E 0.87
agree). Company F 0.89

The analysis takes account of valid responses

to each statement and missing responses are
ignored. Table 2. Count of responses by year and company
The internal consistency of the responses
to the statements has been tested using Year Company
Cronbach’s alpha as shown in Table 1. A B C D E F Total
The high value of Cronbach’s alpha for each
group of statements suggests that the First 6 16 – 8 10 7 47
responses are internally consistent. For the Second 11 8 16 17 27 76 155
Third 8 16 27 23 34 65 173
purpose of the analysis responses of 4 and 5
(agree and strongly agree) are designated as
positive or trusting, and responses of 1, 2 and
3 (strongly disagree, disagree and neither
agree nor disagree) are designated as non-pos- people who completed the questionnaire for
itive or non-trusting. The proportion of posi- all three years was very small and so com-
tive or trusting responses to the four parison of responses by individual was not
statements is taken as a measure of the level pursued. The results in the following tables are
of goodwill trust. Analysis can therefore be calculated from the responses of the people in
presented by year, by ‘giving company’, by the alliance companies and all comments
‘receiving company’ and between pairs of should relate to the opinions of the people in
companies. The variation in the levels of each company. However, in discussing the
goodwill trust over the three years is of results and for simplicity, the company name
particular interest. Conventional c2 tests can is often used in place of the people in the
be used to test whether the proportion of company. For example, ‘Company A shows a
trusting and non-trusting responses is signifi- high level of goodwill trust in Company D . . .’
cantly different over the three years. Cases really means ‘The people from Company A
where the differences are significant are show a high level of goodwill trust in the
shown in bold type in the following tables. people of Company D’.
Table 3 shows the percentage of trusting
responses received by each company. Some
Results
companies (E and F) received very low levels
The numbers of completed questionnaires of trust in the first year (less than 50% of pos-
received from each company for each year are itive responses). The overall level of goodwill
shown in Table 2. Company C was not a trust given to each company seems to increase
member of the alliance in the first year. between the first and second year of the rela-
The questionnaire was designed so that the tionship, and this could reflect the process of
responses for an individual could be compared increasing trust as people get used to working
over the three years. However, the number of together in a new way. Between the second

Copyright © 2003 John Wiley & Sons, Ltd. Strategic Change, November 2003
374 Richard Green

Table 3. Level of goodwill trust by receiving company Table 4. Level of goodwill trust by giving company and
and year (significant changes over the years shown bold) year (significant changes over the years shown bold)

Company Year % Trusting Company Year % Trusting

receiving trust responses giving trust responses

Company A First 53% Company A First 32%

Second 61% Second 64%
Third 59% Third 77%
Company B First 67% Company B First 51%
Second 73% Second 43%
Third 68% Third 62%
Company C Second 58% Company C Second 78%
Third 66% Third 81%
Company D First 62% Company D First 56%
Second 73% Second 58%
Third 70% Third 44%
Company E First 41% Company E First 64%
Second 69% Second 58%
Third 67% Third 62%
Company F First 37% Company F First 55%
Second 75% Second 78%
Third 68% Third 69%

and third years the level of trust seems to have
reduced slightly.
Table 4 shows the level of goodwill trust
given by the people in each company.The vari-
ation of ‘trustingness’over the three years is not
consistent for all the companies. Companies B
and D seem to show rather lower levels of it
than do the other companies. Companies A and
F show large increases in positive responses
between the first and second years, and
Company A shows an increase between the
second and third years. However, Company F
shows a decrease in the third year. Company B,
on the other hand, shows a decrease in the
second year but an increase in the third year.
These inconsistent responses might indicate
that the people in the alliance companies have
different perceptions of the same situation.
The differing perceptions could be because
the companies do not all have the same level
and type of interaction with each other.
Table 5 shows the level of goodwill trust
between pairs of companies. In interpreting
this table, a value of less than 50% trust has
been taken as evidence of a low level of good-
will trust from one company to the other and
a value of 70% or over has been taken as evi-
dence for a high level of goodwill trust. Values
between 50% and 70% are designated as
medium.
There are 36 possible pairs of trust-giving
and trust-receiving companies. For the six
instances of internal trust, where the trust-
giving and trust-receiving companies are the
same, it can be seen that the level of trust
within companies seems to be in the high or
medium area for all three years. It would be
surprising and potentially dysfunctional if
there were low levels of trust within a
company. For the remaining 30 pairings of
trust-giving and trust-receiving companies it
appears that, in the first year of the alliance,
45% of the possible pairs had high or medium
levels of trust and 55% were low. In the second
year the proportion of pairs with medium
or high trust levels increased to 73% and this
proportion is maintained in the third year.
Thus we can claim that there has been an
overall increase in levels of goodwill trust over
the three years and that most of the increase
came between the first and second years.
Examining the changes between the first
and second years and excluding the values for
internal trust (where giving and receiving
companies are the same) shows that of the
20 pairings for which there are data:

Copyright © 2003 John Wiley & Sons, Ltd. Strategic Change, November 2003
An oil industry alliance 375

Table 5. Levels of goodwill trust between pairs of companies by year (significant changes over the years
shown bold)

Company receiving trust

A B C D E F

Giving Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust
Company 1st 55 1st 30 1st 1st 38 1st 17 1st 22
A 2nd 81 2nd 59 2nd 63 2nd 66 2nd 59 2nd 57
3rd 89 3rd 79 3rd 89 3rd 82 3rd 55 3rd 75
Giving Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust
Company 1st 33 1st 77 1st 1st 55 1st 50 1st 23
B 2nd 22 2nd 56 2nd 50 2nd 57 2nd 47 2nd 25
3rd 43 3rd 83 3rd 53 3rd 61 3rd 75 3rd 48
Giving Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust
Company 1st 1st 1st 1st 1st 1st
C 2nd 64 2nd 84 2nd 77 2nd 79 2nd 80 2nd 88
3rd 74 3rd 82 3rd 82 3rd 85 3rd 85 3rd 64
Giving Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust
Company 1st 88 1st 92 1st 1st 82 1st 22 1st 5
D 2nd 58 2nd 79 2nd 45 2nd 74 2nd 42 2nd 43
3rd 35 3rd 37 3rd 47 3rd 74 3rd 38 3rd 29
Giving Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust
Company 1st 50 1st 60 1st 1st 81 1st 64 1st 57
E 2nd 51 2nd 64 2nd 53 2nd 71 2nd 64 2nd 44
3rd 60 3rd 64 3rd 36 3rd 66 3rd 79 3rd 50
Giving Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust Year % Trust
Company 1st 100 1st 58 1st 1st 46 1st 36 1st 74
F 2nd 66 2nd 77 2nd 47 2nd 76 2nd 79 2nd 95
3rd 58 3rd 68 3rd 85 3rd 66 3rd 65 3rd 87

 Four pairings stayed in the low trust level.
 Seven pairings stayed in the medium or high
trust level.
 Seven pairings moved from low trust to
medium or high.
 Two pairings dropped from medium to low
trust level.
The changes between the second and third
years and excluding the values for internal
trust (giving and receiving companies are
the same) show that of the 30 possible
pairings:
 Five pairings stayed in the low trust levels.
 Nineteen pairings stayed in the medium or
high trust levels.
 Three pairings moved from low trust to
medium or high.
 Three pairings dropped from the high or
medium to low trust levels.
Consistent low levels of trust between com-
panies are of interest and could be a cause
for concern. In Table 5:
 Company B has a continuing low level of
trust for Company A. These two companies
are competitors in the open market. Inter-
estingly, Company A’s trust for Company B
was low in the first year but rose to a high
level in the third year. Company B also has
consistent low levels of trust for Company
F.
 Company D displays puzzling behaviour. Its
levels of trust for Companies A and B are
very high in the first year but drop to very
low in the third year. It also displays con-
sistent low levels of trust for Companies E
and F.
It is interesting that trust levels are not neces-
sarily reciprocated between the companies.

Copyright © 2003 John Wiley & Sons, Ltd. Strategic Change, November 2003
376
For example, Company D gives low levels of
trust for most of the other companies in the
third year but it consistently receives high or
medium levels of trust. Company F receives
low levels of trust from most of the other
companies but its people have high trust for
the other companies.
Trust levels are not
necessarily reciprocated
between the companies
Discussion of results
How representative is the sample? At the peak,
when eight parallel project teams were oper-
ating, there were in excess of 500 people
involved in the alliance.Their jobs ranged from
senior managers through middle managers,
technical specialists and offshore supervisors
to offshore craftsmen and labourers. Much
effort was invested in promoting the identity
of the alliance and its ideals to all the people
involved. However, it is likely that the middle
management, technical specialists and off-
shore supervisors were most aware of the
alliance. When carrying out the survey the
intention was to attempt a census of every
person who might have an involvement with
the alliance and its work and about 500
questionnaires were distributed in the second
and third years. The response rates in years
1 through 3 were 72%, 28% and 37%
respectively.
The job types of the people who did
respond covered the full range from senior
managers to offshore labourers. The majority
of people who responded were from job types
that should be aware of the alliance and its
aims. Thus it can be argued that the sample is
sufficiently representative that some credence
can be placed on the results of the survey.
How effective is the questionnaire in
measuring goodwill trust? The results in this
paper rely on responses to the four statements
shown below.
Copyright © 2003 John Wiley & Sons, Ltd.
Richard Green
 The people I deal with in ·company nameÒ
will do whatever is necessary to ensure
the success of the alliance even if it in-
volves tasks to which they had not agreed
previously.
 If I have a problem that can influence the
success of the alliance, the people I deal
with in ·company nameÒ will work hard
to help me solve the problem.
 The people I deal with in ·company nameÒ
will not withhold any information that I
need to help me perform well in the
project.
 The people I deal with in ·company nameÒ
will not exploit to their advantage any tem-
porary weakness of myself or my company.
The first and second statements were designed
to gather views on the commitment of others
and their willingness to take initiatives over
and above what was explicitly promised, and
the third and fourth statements aimed to
capture views on the absence of opportunis-
tic behaviour. Expectation of commitment of
others and absence of opportunistic behav-
iour are key components of goodwill trust as
described by Sako (1992), and it is considered
that responses to the four statements would
reflect these components. It is also considered
reasonable to assume that the proportion of
people agreeing or strongly agreeing with the
statements would be an indication of the level
of goodwill trust between groups of people.
The reasonably high values of the Cronbach’s
alpha coefficient give encouragement that
the four statements do relate to the same
construct.
Anticipated versus actual results
A priori, it could be expected that the level of
goodwill trust between the people from the
alliance companies would increase as they
gained experience of working together. We
would expect increases in trust to be espe-
cially marked if the alliance was successful in
its projects. Overall the results do show that
levels of goodwill trust have increased over
the three years — 73% of possible pairings of
Strategic Change, November 2003
An oil industry alliance
companies are in the medium to high trust
category in year 3 compared to 45% in year 1.
Most of the gains appeared to come between
years 1 and 2. However, for some pairings the
levels of trust remained low for all three years
and for others, the levels dropped back into
the low category in the third year. Examples
of this pattern are shown in the trust from
Company B for Companies A and F, and in the
trust from Company D for Companies A, B, C,
E and F. Although the survey did not set out to
gather data on possible reasons why the level
of goodwill trust remained low or fell during
the period of the alliance, it is possible to spec-
ulate what those reasons might be. If the same
team of people is engaged in a series of similar
projects over time and their level of success
increases as each project is completed, then
we would expect the level of trust between
the people to increase as they gain experience
of working with each other. However, other
influences which may affect a person’s feel-
ing of trust for others include:
 Experiences from previous relationships.
All the contractor companies in the alliance
had previously had a long-term working
relationship with the customer company.
Company B was a competitor of Company
A outside the alliance. Company D had also
worked with the other contractors on many
occasions in previous adversarial relation-
ships and it appears that its built-up sus-
picion and distrust were slow to dissipate
during the life of the alliance.
 Degree of success or failure. It is often said
that a true test of a collaborative relation-
ship occurs when difficulties are being
experienced. It may well be that an individ-
ual’s view of the alliance and his or her level
of goodwill trust for others may be affected
by how well the current projects are pro-
gressing. The alliance teams experienced
both successes and non-successes in their
projects and this could well have affected
their responses to the questionnaire.
 Perceived fairness of risk–reward struc-
ture. Within an alliance that is working well,
people are motivated to work hard to
Copyright © 2003 John Wiley & Sons, Ltd.
377
deliver improved performance. They will
continue to be motivated if they believe that
their efforts are recognized and if they per-
ceive that their company is receiving an
appropriate share of the benefits arising
from the improved performance. In this
alliance the senior management struggled
to find a risk–reward structure with which
all companies felt comfortable and the struc-
ture was changed between the second and
third years. There were occasions when
Company D felt that it was not being fairly
rewarded for its efforts. It is possible that
this may have influenced the level of good-
will trust from Company D.
 Continuity of senior management. The
importance of commitment and example of
senior management to the success of col-
laborative relationships has been noted in
the literature (e.g. Green and Keogh, 2000).
In the alliance under study the senior man-
agement teams remained fairly constant for
the first and second years but in the third
year there were several changes including
the departure of the senior manager, who
had set up the alliance from the customer
company. The new manager, although being
very supportive of the alliance, changed the
way it was managed and this too may have
influenced the results from the survey in the
third year.
Conclusions
This paper has described the use of statements
in an attitude survey to estimate the levels of
goodwill trust between people in an oil indus-
try alliance of six large companies over three
years. Goodwill trust is described by Sako
as being very important to the success of
obligational contractual relationships, which
are very similar to the collaborative relation-
ships embraced by the UK upstream oil indus-
try in the mid to late 1990s.
It was suggested that levels of goodwill trust
should increase with time as people gain expe-
rience of working together. Analysis of the
results shows that levels of trust did increase
over the three years, and that most of the
Strategic Change, November 2003
378
increase occurred between the first and
second years.
Some pairings of companies did not show
an increase in trust. Possible reasons for this
behaviour were put forward, including the
experiences inherited from previous relation-
ships, project successes or failures affecting
the way people felt about each other, per-
ceived lack of fairness in allocation of risks and
rewards, and changes in senior management.
The paper has shown that it is important
and necessary to measure the levels of good-
will trust between groups of people in an
alliance. It can be used both to promote oper-
ational effectiveness between the partners
and to fashion longer term changes in com-
petitive advantage and strategic change.
Goodwill trust can be
used to promote
operational effectiveness
and to fashion strategic
change
Acknowledgements
I would like to thank the management of the
alliance companies for allowing me to observe
the evolution of the alliance and for encour-
aging their colleagues to complete the survey
questionnaires. I should also like to thank the
people who took the time to complete the 89
questions on the questionnaire for the three
years of the survey.
Biographical note
Dr Richard Green is a Research Fellow in
Aberdeen Business School at The Robert
Gordon University in Aberdeen. His main
research area concerns the relationships
between North Sea oil companies and
their contractors. Before joining the Univer-
sity, he worked for British Petroleum in
London, Iran and Aberdeen.
Copyright © 2003 John Wiley & Sons, Ltd.
Richard Green
References
Barney JB, Hansen MH. 1994. Trustworthiness as
a source of competitive advantage. Strategic
Management Journal 15: 175–190.
Coleman JS. 1990. Foundations of Social Theory.
The Belknap Press: Cambridge, MA.
DTI. 2001. Development of UK Oil and Gas
Resources 2001. The Stationery Office: London.
Gambetta D. 1988. Can we trust? In Trust:
Making and Breaking of Cooperative Rela-
tions, Gambetta D (ed.). Blackwell: Oxford.
Green R, Keogh W. 1998. Collaboration in the UK
upstream oil and gas industry: five years on.
Paper presented at the fifth international confer-
ence on multi-organisational partnerships and
co-operative strategy, Oxford, July 1998.
Green R, Keogh W. 2000. Five years of collabora-
tion in the UK upstream oil and gas industry.
Strategic Change 9(4): 249–263.
Kanter RM. 1994. Collaborative advantage: the art
of alliances. Harvard Business Review Jul/
Aug: 96–108.
Lane C. 1998. Theories and issues in the study of
trust. In Trust Within and Between Organiza-
tions: Conceptual Issues and Empirical Appli-
cations, Lane C, Bachman R (eds). Oxford
University Press: Oxford.
Moorman C, Deshpandé R, Zaltman G. 1993.
Factors affecting trust in market research rela-
tionships. Journal of Marketing 57: 81–101.
Morgan RM, Hunt SD. 1994.The commitment–trust
theory of relationship marketing. Journal of
Marketing 58: 20–38.
O’Neill O. 2002. Spreading suspicion. BBC Reith
Lectures 2002. BBC: London.
Powell W. 1990. Neither market nor hierarchy:
network forms of organisation. Research in
Organisational Behaviour 12: 295–336.
Sabel CF. 1993. Studied trust: building new forms
of cooperation in a volatile economy. Human
Relations 46(9): 1133–1170.
Sako M. 1992. Prices, Quality and Trust: Interfirm
Relations in Britain and Japan. Cambridge
University Press: Cambridge.
Sako M. 1998. Does trust improve business perfor-
mance. In Trust Within and Between Organi-
zations: Conceptual Issues and Empirical
Applications, Lane C, Bachman R (eds). Oxford
University Press: Oxford.
Schurr P, Ozanne J. 1985. Influences on exchange
processes: buyers’ preconceptions of a seller’s
Strategic Change, November 2003
An oil industry alliance
trustworthiness and bargaining toughness.
Journal of Consumer Research 11: 939–953.
Shapiro D, Sheppard BH, Cheraskin L. 1992. Busi-
ness on a handshake. Negotiation Journal Oct
8: 365–377.
Sherman S. 1992. Are strategic alliances working?
Fortune Sept: 77–78.
Spekman RE. 1988. Strategic supplier selection:
understanding long term buyer relationships.
Business Horizons Jul/Aug: 75–81.
Copyright © 2003 John Wiley & Sons, Ltd.
379
Sydow J. 1998. Understanding the constitution of
interorganisational trust. In Trust Within and
Between Organizations: Conceptual Issues and
Empirical Applications, Lane C, Bachman R
(eds). Oxford University Press: Oxford.
Zuker LG. 1986. Production of trust: institutional
sources of economic structure 1840–1920.
Research in Organisational Behaviour 8:
53–111.
Strategic Change, November 2003