Introduction

Today's dynamic modes of competition, stemming from globalization and the development of new technologies and innovations, are no longer adequately explained by traditional organizational and managerial theories (e.g., Eisenhardt & Tabrizi, 1995; Sanchez, 1997; Sanchez & Heene, 1997). Knowledge intensive businesses are characterized by flexibility and decentralization and networking of organizations, and their competitiveness fundamentally depends on their capacity to generate, process and apply information and knowledge. The core activities of production, consumption and circulation of knowledge are organized on a global scale, either directly or indirectly through a network of linkages between economic agents. Each added connection to a network's pool of knowledge multiplies the value of the whole. This results in new rules of competition and new sorts of organizations, partnerships and alliances. In this kind of dynamic business environment, the level of complexity and turbulence is very high. The dynamic environment is characterized by networked organizations, rapid and ample flow of information, as well as high expertise (St hle & Gr nroos, 2000; Blomqvist, 2002; St hle & Hong, 2002). Global knowledge-based competition becomes increasingly a learning race, since specialized knowledge is a primary source for value and profit, and the ability to also leverage external knowledge and resources through interorganizational cooperation and partnerships becomes critical (Powell, 1998).

Complementary partnerships are believed to be a key element both in knowledge creation for technological development, itself, and in leveraging the value of technological knowledge (see e.g., Ford, 1998). If similar kind of organizations join their forces, they may be able to reach a wider scale. But, in order to innovate and create new knowledge, the fusion of different kinds of knowledge is needed. Technology partnerships are valuable both in knowledge creation for technological development and in extracting value from the development. Complementary companies are able to focus on their core competencies and simultaneously leverage external knowledge and resources to complement their knowledge and resource base. Potentially, the focus on core competencies enables relatively stronger competitiveness (cumulative learning, focused use of critical resources) and the ability to gain synergistic benefits and scale by leveraging different knowledge bases and networks (Blomqvist, 2002; St hle & Kyl heiko, 2002).

Miles, Snow and Miles (2000) point out that the ability to collaborate is a meta-capability for innovation. Innovation always depends on knowledge being offered voluntarily, rather than on command. Therefore, knowledge creation is social in nature, and social exchange is a core process in knowledge creation (Brown & Duguid, 1998). Miles et al. (2000) further argue for mutual and voluntary communication based on trust being critical for knowledge creation and subsequent innovation. Also, Nonaka and Takeuchi (1995) stress the importance of common values, goals and strong relationships in knowledge creation. St hle (1998, 2002) approaches the issue from the perspective of self-organizing innovation systems. She emphasizes that the core ability for organization's success in the knowledge-based competition is systemic, e.g., the whole organization's capability of coherence, flexibility and radical changes. The systemic capability of an organization always depends on the actors' ability to relate to others and form relationships. This, in turn, is not possible without trust.

The above-described changes in the business environment have awoken a major interest in the role of trust, which has been increasingly brought up since the latter part of the 1990s, both in a business and research context. Trust has become an important issue in inter-firm cooperation (Macaulay, 1963; H kansson, 1989; Young & Wilkinson, 1989), partnerships and alliances (Parkhe, 1993, 1998; Ari o, Torre & Ring, 1999; Ari o, 2001) and supplier relations (Sako, 1994, 1998). It is in the heart of marketing theory development (Hunt 1999) and an implicit issue in the knowledge-based view of the firm (Nonaka & Takeuchi, 1995; von Krogh, Ichijo & Nonaka, 2001). Trust has also been identified as an emerging managerial philosophy (Creed & Miles, 1996; Miles et al. 2000) and a critical issue for organizational culture (Barney & Hansen, 1994; Barney, 1986). It has been proposed that some cooperative threshold amount of trust is needed for cooperation to evolve (Dibben, 2001). Also, the increasing interest in social capital has a lot to do with issues of trust (Nahapiet & Ghoshal, 1998; Putnam, Leonardi & Nanetti, 1993).

The aim of this chapter is to increase the understanding of trust both as a concept and as a phenomenon. The conceptualization of trust is derived basically from the literature and developed further by data from an empirical study. On the basis of these analyses, a four-dimensional conceptualization of trust is formed. One of these components is self-reference, which gives a systemic context for understanding trust as a phenomenon.

The empirical illustrations in this article are based on research on asymmetric technology partnerships, in which eight small software firms' partnerships with five large firms were empirically analyzed (Blomqvist, 2002). Qualitative methodology was applied through in-depth interviews.

In this chapter our approach is purely theoretical, and the empirical data in this study used only for the purposes of conceptualization. Thus, our article aims to be a contribution for both further research and for the managerial implications of trust building. Even though the study is rather general by its nature, we restrict the results in this case to the context of technology partnerships, because the empirical data gathered from technology partnerships has had a major influence on the categories that have been formed.