Abstract for: Dynamic Analysis of Trust and Commitment Building

The aim of this paper is to create a deeper understanding of how small and medium-sized enterprises (SMEs) build relationships and commitment with partners that are distant locationally and culturally. We elicit challenges in building global logistics value networks by examining Finnish SMEs entering and operating in emerging markets, special focus is given to Finnish SMEs operating in China. Using a conducted survey as a starting point, we introduce prevalent difficulties that Finnish SMEs are experiencing in overseas operations. Furthermore, building on top of the prevalent problems a system dynamics model describing the dynamic nature of the identified factors is presented. The model tries to capture the problems simultaneously from the SMEís as well as from the partnerís point of views. Both parties interpretation of the actions of the other are biased, which is a significant factor in diminishing trust between them. Trust and its cultural divergences are an important part of creating and maintaining commitment.