Partnering with the Frenemy: A Framework for Managing Business Relationships, Minimizing Conflict, and Achieving Partnership Success

6. Why Trust Is Not Enough

In 1972, Kenneth Arrow, a Nobel Prize winning economist, noted that virtually every commercial transaction has within it an element of trust. This is mind bending—consider all the transactions that take place daily in stock exchanges around the world, every government and business organization on the planet, and the everyday purchases generated by the world’s seven-plus billion people. None of these would be possible without trust between a buyer and a seller: The buyer must trust that the seller will release the goods upon payment, and the seller must trust that the buyer will release the payment. This is the basic money-for-goods principle. Another way to think about this is to consider trust as a form of currency ...