Trust Ecosystems™

Overview of Trust

One common denominator in all forms of value exchange is trust. Both sides of the exchange trust they are getting the value expected from the exchange, trusting each other to provide the value expected or agreed upon. According to Merriam-Webster, trust is the “assured reliance on the character, ability, strength, or truth of someone or something.”

Kenneth Arrow, an international economist, said as economic and social interactions become more complex, trust becomes the lubricant to keep things moving.[1] Oil lubricates engine parts to reduce friction between moving parts while improving efficiency and reducing wear, trust does similarly for business transactions, markets, and economic systems.

Anthony Giddens said that as societal and organizational processes modernize trust also becomes more important.[2] Georg Simmel suggests that individual and collective wealth would not exist today without trust.[3]

Research has shown that trust improves negotiations, increases flow of information, increases ability to learn, increases flexibility in management, increases speed of business transactions, and reduces costs, such as costs of transaction, governing relationships, agency, and opportunity.[4]

Trust is actually a strategic resource, according to Jay Barney and Mark Hansen, and can lead to competitive advantage when strong trust exists.[5] But more than a resource that can be used up and depleted, it is a strategic asset that if developed and managed correctly will only grow.

Excerpt from “Leveraging Trust Networks” chapter in “Redefining Business in the New Africa.”

Our Trust Ecosystems

Partnerships shape and drive the opportunities we develop, but trust maintains them. Trust is the glue and foundation upon which everything else is built. As we develop ecosystems, both partnerships and trust are nurtured and leveraged.

In the case of trust ecosystems™, The Afribiz Foundation serves as both an informal and formal trustee for projects, ventures, initiatives, etc. In a broad sense, serving as trustee means that Afribiz works for the  benefit of all direct stakeholders in the ecosystem and ensures win-win scenarios for each. We first do this by establishing a culture and environment which nurtures trust and relationships.

Afribiz also provides capacity as a formal trustee, or fiduciary, through Afribiz Trust, which provides trust administration services for trusts created to manage assets related to projects and ventures.

[1] Arrow, K. (1974). Limits of Organization. New York: W.W. Norton & Company.

[2] Giddens, A. (1990). The Consequences of Modernity. Stanford, CA: Stanford University Press.

[3] Simmel, G. (1978). The Philosophy of Money. London: Routledge & Kegan Paul.

[4] Bachmann, R., & Zaheer, A. (eds.) (2006). Handbook of Trust Research. Cheltenham, UK: Edward Elgar Publishing.

[5] Barney, J.B., & Hansen, M.H. (1994). Trustworthiness as a Source of Competitive Advantage. Strategic Management Journal, 15, 175-190.