Inter-Organizational Trust in a Challenging Context

M12 annual

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Abstract

This research analyzed the process involved in building trust between a guarantee fund for micro, small and medium firms in Brazil—the Investment Guarantee Fund (FGI)—and the banks that used its guarantee. The FGI was created in 2009 by the Brazilian government as one of its reactions to the credit crunch caused by the world economic crisis in a challenging social and economic environment. This initiative constituted an attempt to rebuild trust in this kind of public policy instrument, shaken by the failure of the Guarantee Fund for the Promotion of Competiveness (FGPC)—launched in 1997—which had delayed payment of guarantee claims and contested various guarantees. The analysis used various models for building and repairing trust in inter-organizational relations. The present study employed a case study methodology with documental analysis and semi-structured interviews. The results show that, in order to repair its relation with banks, the fund had to distinguish itself from the FGPC by using a relational structure that generated trust in partners.