Strategies for the Base-of-the-Pyramid

Becoming trusted at the Base-of-the-Pyramid

Master thesis M.Sc. in Organization Studies 2007/2008 Tilburg University

Author Peter Grootveld ANR: s577220 Tel.: 06 52 30 7700 Email: p.grootveld@uvt.nl

Supervisors Dr. Patrick A.M. Vermeulen Prof. Dr. Jac L.A. Geurts

Abstract Numerous academics and business managers believe that western MNCs can create new markets and help eradicate poverty at the same time, once they recognize the poorest of our world, the so-called base of the pyramid (BoP) as novel consumers and innovative producers. To be successful in this bipartite mission, MNCs are dependent on successful collaboration with local parties in the developing countries. However, collaboration with western partners is based on other grounds than collaboration with local parties, often living in remote communities. Trust appears to be the key word in the latter and BoP literature provides quite some propositions on trust building activities. However, despite the acknowledgement of the necessity of trust building with local partners, there is no empirical research specifically aimed at MNCs trust building processes with people in the remote communities. Hence, this master thesis sets out to explore how western multinational companies build trust with local communities in developing countries. Departed from present BoP and trust literature this thesis studied a BoP case in Tanzania and confirmed five variables causing trust: outset manifestation, reciprocity, consistency, adaptation to institutional framework and communication. Moreover the results of this thesis show that the relation between the variables and the actual processes that account for the relationship between the concerning variables are determined by the context of the BoP.

Cooperation is sustained by the shadow of the future (Axelrod, 1984)

Preface
This master thesis presents the results of an inductive research on strategies for the base of the pyramid. I conducted the preparing and concluding parts of the research at Tilburg University and the field research in Tanzania. The finished thesis brings along ambivalent feelings. On the one hand, it means the successful ending of a fruitful period of studying. On the other hand, it means the end of working on a subject that inspired me increasingly, day after day. However, as Jac Geurts spoke to me reassuring: its just like a boomerang, it will return to you once again.

The thesis has its origins in the strategy classes of Patrick Vermeulen and Jac Geurts. Their enthusiastic introduction of the Base of the Pyramid made many hearts beat faster, and Strategies for the Base of the Pyramid became a very interesting thesis subject. Hence, I want to thank both Patrick and Jac for their impassionate classes. More specifically, I want to thank Patrick for his professional supervision. His feedback was always quick, clear and to the point. It was not only helpful to conduct better research, but also taught me to sharpen my vision in general.

Furthermore I want to thank Harrie Hendrickx from Unilever, who supported me in studying the Allanblackia case - which was perfect for my thesis - and connected me to the right people. One of these people was Fidelis Rutatina from NDTL. Fidelis introduced me to the real world of Allanblackia and to Tanzania in general. He is the best host in Tanzania one could imagine. Next, I want to thank Godfrey Nkongolo who not only helped me translating the interviews, but also guided me during the trips across Tanzania.

Of course, I owe the results of this thesis to all the interviewed people. Hence, I thank all the community members I interviewed and their villager leaders. I also want to thank, Maria and Tom from FaiDa Mali, Ndanshau from SNV and Doris from ICA. I admire them for their dedicated work to create a better life for the people in Tanzania.

I am also very grateful to all the people that have read my thesis and thought along with me, with special thanks for their critical feedback to Michel Bachmann and Chris van der Schoor.

Peter Grootveld Nijmegen, January 2009

Table of contents
1. INTRODUCTION..................................................................................................... 5 2. THEORETICAL BACKGROUND ........................................................................ 10 2.1 Organizing the trust literature ............................................................................. 10 2.2 Trust defined ....................................................................................................... 11 2.3 Antecedents of trust............................................................................................. 11 2.4 Trust in BoP studies ............................................................................................ 17 2.5 Insights from other studies .................................................................................. 20 2.6 Comparing visions on trust building ................................................................... 21 3. METHODOLOGY.................................................................................................. 24 3.1 Research design................................................................................................... 24 3.2 The case............................................................................................................... 25 3.3 Data collection..................................................................................................... 26 3.4 Data analysis ....................................................................................................... 29 4. RESULTS................................................................................................................ 32 4.1 Introduction ......................................................................................................... 32 4.2 Build trust incrementally..................................................................................... 32 4.2.1 Outset manifestation ....................................................................................... 33 4.2.2 Manage reciprocity ........................................................................................ 36 4.3 Consistency ......................................................................................................... 41 4.4 Manage communication ...................................................................................... 42 4.5 Adapt to institutional framework ........................................................................ 44 4.6 An overview of the results & a BoP trust building model .................................. 49 5 DISCUSSION AND CONCLUSION ...................................................................... 51 5.1 Introduction ......................................................................................................... 51 5.2 The suitability of prevailing trust literature......................................................... 54 5.3 Comparison with the BoP literature .................................................................... 55 5.4 Conclusion........................................................................................................... 57 5.5 Limitations .......................................................................................................... 58 5.5 Further research................................................................................................... 59 6 REFERENCES......................................................................................................... 59

1. Introduction
If we stop thinking about the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up. (Prahalad, 2004, p.1).

This proposition is illustrative for the increasing signs of interest in the possibility of doing business in developing countries and alleviating poverty at the same time.

The websites and annual reports of fortune global-500 companies show that nearly all of them are to a certain extent serving the poorest of our world, the so-called base of the pyramid (hereafter: BoP). Wal-Mart, for example, moved into the Mexican retail banking sector. According to themselves, not only to sell more stuff but also to compete against the entrenched domestic businesses that are not fulfilling local demand. And as the New York Times (2006) stated affirmatively: Poorer Mexicans have been largely shut out of traditional banks by minimum balances, high fees and intimidating paperwork. Community banks barely exist. Another illustrative example is Unilever. It notifies on its website that their deep roots and early engagement in BoP markets gave them valuable experience in meeting the needs of BoP consumers. For instance, one of Unilevers oldest brands is lifebuoy, once launched in the UK as an affordable soap. Today it is mainly consumed in BoP countries. Nearly half of the sales take place in rural Asia, where hygiene issues such as hand washing are of vital importance for whole communities. Another BoP-aware company is DSM. This multinational proclaims they started three concrete Base of the Pyramid projects in India this year. According to their website these projects will focus on the topics: increased production of milk, better nutrition and the development of sustainable construction materials. Like this, numerous other examples of companies entering the BoP can be found.

Strategies to enter the BoP are also increasingly subject of interest in Academia. In 2002 an article named the fortune at the bottom of the pyramid caught not only the eye of the corporate world, but attracted also many scholars of different disciplines. In this article Stuart Hart and C.K. Prahalad capture the division of the worlds purchasing power parity in a pyramid with four consumer tiers. They sketch the top tier as a saturated market accommodating about hundred million people earning more than $20.000 a year. The bottom tier consists of more than four billion people with an annual per capita income of less than $1500. Thereupon, they

state that although these bottom tier people are poor, they represent an underserved multitrillion dollar market. Hart and Prahalad continue in their article with quashing the prevailing assumptions why these people should not be seen as potential consumers for western companies and subsequently they draw attention to a few crucial elements to create a commercial infrastructure in developing countries. For instance, they assume that the poor can afford and do have use for the products and services in developed markets and they argue that it is crucial to pay special attention to improvement of access to these products. Considering the scholars innovatory train of thought, it is not surprising that many colleagues reacted on Prahalad and Hart by publishing articles in line with The Fortune at the Bottom of the Pyramid. Some of them primarily in a critical way (e.g. Jenkins, 2005; Crabtree, 2007; Karnani, 2007) and others elaborated on Prahalads and Hart s ideas by studying certain aspects of the BoP proposition, or by approaching it from a specific angle. For example, it is studied how to create successful business models for entering the BoP (London, 2007; Seelos & Mair 2007), how corporations and NGOs can partner successfully to learn from each other (Brugmann & Prahalad, 2007), how a BoP perspective can complement other poverty reduction programs (London, 2007), alternative perspectives on BoP concept are explored (Jaiswal, 2007) and there is even a BoP protocol, helping organisations step by step to launch a BoP venture (Simanis & Hart, 2008).

It seems convincing that the BoP philosophy receives increasing and mainly positive attention by both academics and business managers. However, it is not all roses in the BoP markets. Among the high number of organizations that entered the BoP, there are also many examples of failed initiatives. A typical example is the Word Shoe project of Nike. In its attempt to supply low priced shoes to the low-income-populations in China, it failed in meeting its sales goals. According to McDonald et al (2002), Nike was unsuccessful in reaching the target consumer because its business model was not based on an emphatic understanding of the context. Stuart Hart (2007) has put forward that if Nike had started with a pre-commercial period of engagement, deep listening and building trust with local parties, it would have had a greater chance of being successful in resolving the contradictions between its used business model and the one required to serve the low-income-populations of China. And even if a BoP venture seems to have success in the beginning, it can still easily fail to meet its targets. The detergent product Wheel of Unilevers subsidiary Hindustan Lever Ltd. (HLL) perfectly illustrates this failure to make a BoP initiative grow. The business model was based on single serve packaging, low-cost production, and distribution through small local companies. 6

Although rapid growing sales figures were visible in the beginning, the business model was not suitable to reach 500 million potential customers in rural villages. After a few years HLLs rapid growth began to stagnate. In 2004, the HLL share price ended up in a downward spiral, and shed over 25 percent within 3 months (Financial Express, 2004). HLL became aware that it had to integrate deeper into the local communities to reach the 500 million people. Hence, Project Shakti came into existence: through womens self help groups, HLL trained thousands of entrepreneurial women in building a local HLL micro-franchise. This project has resulted in both income creation for the female micro-entrepreneurs and the possibility of reaching the 500 million previous unreachable customers.

The interested reader has probably considered what might be essential if a MNC wants to be successful in entering the BoP. Consulting the BoP literature to explore this matter, results in finding many factors that influence the consolidation in the alien BoP market. London and Hart (2004) make a fundamental point with respect to becoming successful: Business strategies that rely on leveraging the strengths of the existing market environment outperform those that focus on overcoming weaknesses. All of the BoP scholars seem to comply with the proposition that it is necessary for MNCs to become integrated in the concerning context and hence they have to collaborate with local governments, local NGOs, local firms and local individuals. Furthermore, literature suggests that MNCs have to develop a learning process with the local people in order to create relevant ideas for products or services that the people really need and to obtain other needed knowledge about the local context. Frequently mentioned is the importance to have local companies and individuals taking over a part of the MNCs activities and include them in supply chains. Logically, this creates income generation in local communities and hence eradicates poverty. And indeed, also the earlier described examples of BoP initiatives leads one to suspect that involving local communities in BoP ventures calls for special attention and even determines the success of the venture. Unilever brings its soap hand in hand with education on hygiene and according its website, it visits each village several times, engaging all parts of the community, Nike failed because it didnt engage with the local community and HLL began to meet its objective not before it started to collaborate intensely with rural women.

It might be clear that collaboration with diverse local parties plays a major role in becoming successful at the BoP. Consequently, the next question would be: how to collaborate with local parties in this new market? Also this question is broadly discussed by BoP scholars and 7

the ever returning key word in this discussion is trust. For instance, Stuart Hart (2007, p.213) states: unleasing the wellspring of innovation at the BoP() requires developing a personal relationship of trust, understanding and respect through which new possibilities for locally-embedded businesses can emerge. In the same line, his colleague Simanis et al. (2008) mentions that the corporate team will depend heavily on the trust they have to obtain, because it will enter the local community as an outsider. Some imminent phrases in BoP publications attach even more weight to trust because they could have the reader presume that trust building in a developing country brings along more barriers than just differences in cultural background. For example, Prahalad (2004, p.20) notices that Both sides- the large firms and the BoP consumers- have traditionally not trusted each other. The mistrust runs deep. Private sector firms approaching the BoP market must focus on building trust [}. , and Hart (2007, p.213) emphasizes that the key to success in the BoP is trust [] because the poor are frequently exploited by predatory lenders and unscrupulous vendors.

The importance of collaborating with local partners and the striking statements about trust in the BoP literature raise undeniable inquisitiveness about the way in which trust is build in the BoP. Surprisingly, there is no empirical research aimed at a MNCs trust building process with the people in the remote communities. Statements are mainly conceptual or derived as side effects from other studies. To the best of my knowledge, not even one of the BoP articles refers to the mature field of organisational trust research. Trust is, after all, recognized in several scholarly disciplines as a crucial element in business partnerships. McEvily et al. (2006) designate various viewpoints. Referring to Arrow (1974) they mention that economics argue that trust is an essential lubricant necessary for even the simplest forms of economic exchange. Strategy researchers believe that trust is a strategic resource providing a source of sustained competitive advantage (Barney & Hansen, 1994) and other organisational researchers describe trust as a governance form which helps organisations to coordinate its economic activity (Powell 1990). It could be well conceivable that findings in general trust research are applicable in BoP ventures and help MNCs to become successful in their mission to create new markets and eradicate poverty at the same time. Hence, departed from the mature field of trust research this thesis sets out to explore:

how western multinational companies build trust with local communities in developing countries.

The importance of trust building is obviously discussed in the BoP literature, but it falls short when it comes to the actual process of trust building with local partners. Consequently, answering the research question will contribute to closing this important gap. Besides closing the gap, it will also hold the proposed methods for launching BoP ventures in general against the light. An interesting question is if these methods, for instance the ones elaborately discussed in the BoP protocol by Simanis and Hart (2008), are fostering the trust building process as well. But there is even more theoretical relevance. Also within the mature field of trust research is the context of the BoP unknown. Hence, answering the research question will provide insight in the applicability of the long standing trust antecedents in the context of the BoP. Then there is the more practical point of view. The outcome of this thesis is valuable for MNCs in search for the crucial relationship with local people in the yet untapped new market. It will provide a model that can be used by MNCs as a guideline to build a trusted relationship with local partners at the BoP.

The theoretical framework will first expound on the mature field of organisational trust research. Subsequently, the conversely juvenile field of BoP research will be turned inside out to make an inventory of ideas on trust building living in this academic domain. Also the literature from the development field and on cross cultural collaborations will be shortly visited to derive potentially important insights for this thesis.

2. Theoretical background
2.1 Organizing the trust literature Many interesting but not always convergent streams of trust research have developed among scholars (Bachmann and Zaheer, 2006). Already for decades, but especially at the moment of writing (2008), trust in economies is a much discussed topic. Also trust in (groups within) societies is studied a lot (Bachmann and Zaheer, 2006) and even within organisations trust is studied on various levels.

Why is trust that interesting to study? It was already discussed in the introduction that trust is a key factor in collaborations. McEvily et al. (2003) pointed out that economics define trust as an essential lubricant necessary for all forms of economic exchange, strategy researchers believe that trust is a strategic resource providing a source of sustained competitive advantage and other organisational researchers describe trust as a governance form which helps organisations to coordinate its economic activity. In addition, Larson (1992) claims that trust reduces the extent of formal contracts needed. Furthermore, trust determines the likelihood of future cooperation (Williamson, 1993), lowers transaction costs (Gulati, 1995), induces desirable behaviour (Madhok, 1995) and facilitates dispute resolution (Ring & Van de Ven, 1994). Trust appears to be a broadly discussed concept, so it is important to be clear about the context in which trust is studied and what is meant by the concept of trust.

This thesis explores how companies can become trusted by people within developing communities. Hence, this theoretical background will go more deeply into how companies can become trusted by individuals. However, trust in a company appears to be closely connected with trust in an individual. For instance, Zaheer et al. (1998) conducted empirical work on the relationship between trust in a specific individual dealt with, and trust in that individuals organisation. They found that there is a significant relation between these two levels of trust. Trust in the organisation is a result of trust in individuals from the concerning organisation. With respect to this relation, McEvily et al. (2003) found evidence that negative experience with individuals from a collective have even more impact on the trust in the concerning organisation. Hence, the focus will be on both trust building between individuals and between organizations and individuals.

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2.2 Trust defined According to the ISI web of knowledge it was Morgan and Hunt (1994) who published the most cited article with respect to organizational trust. They conceptualize trust as existing when one party has confidence in an exchange partners reliability and integrity (p.23). The second most cited article is published by Mayer et al (1995). Their definition is more comprehensive: the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party (p.712). In the second part of their definition, Mayer et al. explicitly mention the irrespective relation between trust and the ability to monitor the other party. In this thesis, monitoring is seen as an important part of trust building. Several scholars claim that the instrumental or functional value of trust, lies in its power as a risk-coping strategy in social relationships (Koeszegi, 2004) and hence monitoring could be an important part in the concept of trust. Furthermore, monitoring is also seen as a way to create routine in the contact between partners and also make parties critically reflect on the partnership. This way adjustments in the relationship can be made on time (Sabel,1993). Lewicki and Bunker (1995) proclaim that the presence of monitoring could be a measure to determine the extent of trust. Besides monitoring, there is another point of attention. There is a difference between plans and actions. In this sense, trust is found in actions, not in words. Hence, in this thesis trust will be described as the found willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor.

2.3 Antecedents of trust This section will discuss relevant ideas and antecedents of trust, found in prevailing trust literature.

Incremental trust building and reciprocity Two of the most often discussed points of interest in the trust literature are reciprocity and incremental trust building (e.g. Creed & Miles,1996; Johnson et al., 1997; Larson, 1992).

Das & Teng (1998) mention that theorists (e.g. Bowman & Hurry, 1993) propose incremental resource commitments as the preferred strategy when risk and uncertainty levels are high. In that sense they note, trust is the accumulation of prior satisfactory experiences (Gulati, 1995; Luhmann, 1988). Also Burt and Knez (1996) discus trust building as an incremental process. 11

Citing Blau (1968, p.454) they summarizes the process as follows: social exchange relations evolve in a slow process, starting with a minor transaction in which little trust is required because little risk is involved and in which both partners can prove their trustworthiness. This enables them to expand the exchange process in their relation and hence, after a certain period, they can engage in major transactions. Thus, the process of exchange leads to the trust required for it in a self-governing fashion. Lewicki and Bunker (1995) call this insight in the behaviour of the trusted partner knowledge-based trust. There is a willingness to rely on the other person because of direct knowledge about this persons behavior. Knowledge-based trust is grounded in the predictability knowing the other party sufficiently well so that the others behavior is anticipatable. Knowledge-based trust relies particularly on information about the other.

Part of reciprocity is the way in which benefits of a partnership are divided. Das & Teng (1998) derive insights from Adams (1963) equity theory of motivation. This theory suggest that people have a strong need to maintain their sense of equity in exchange relationships. In this context it means that the all parties benefit from the collaboration in accordance with the amount of resources they bring in. On occasion, this feeling of getting an equal return on investment can even be more important then maximizing the synergy of the collaboration (Ring & van de Ven, 1994). At the other side, if there is a high level of trust, partners tend to be more flexible in getting an unequal share of the collaborations results for a short time. When there is inequity felt for a longer term, tension will arise and trust will decrease. So, for successful trust building, profits need to be distributed in an equal manner.

Das & Teng (1998) linked reciprocity also with risk taking. They explain that trust researchers usually link risk taking with trust to notify that trust leads to risk taking (e.g. Coleman, 1990). However, from another perspective, Das and Teng suggest that trust and risk taking forms a reciprocal relationship because risk taking increases the level of trust. When it is visible that one of the parties within a relationship takes a risk in trusting the other, the other tends to feel incumbent upon the other to behave in a trustworthy manner. So risk taking is a way to show one another his trustworthiness. Again, in this technique of trust building, people will not at once take a lot of risk in the hope that it will cause reciprocal trust from the other party.

When partners get used to each other, they slowly develop a customary way of working. Van Ees & Bachmann (2006) introduce the concept of extended trust. This form of trust is not 12

really build on personal contacts, but is rather grounded in patterns of routines and rules, which people use to predict their partners future behaviour. This would mean that over time, trust is not only determined by personal contact and (cultural) similarity of partners, but can also be based on norms produced by and integrated in an institutional framework (Arrighetti et al., 1997).

The first steps Knowing that trust is subject of reciprocity and is build incrementally, doesnt say much about what a MNC could do when it first enters a remote community in a developing country. However, the trust literature also proposes ideas about the very beginning of a partnership. To start with, even without any direct assignable factor, the extent to which a person trust one another can vary. Mayer et al. (1995) explain this by the difference in peoples propensity to trust, or in other words, the tendency to which a person will trust another before having any information. This propensity can differ per person, but is also often dependent on culture.

Das & Teng (1998) suggest a more tangible step to take in order to build a trusted relationship, namely locating a partner with a good reputation. This might provide the first piece of evidence to take some initial trust (Barney & Hansen, 1994). Mayer et al. (1995) suggest that another way of becoming trustworthy is showing your ability. As expounded in the definition of trust, trusting one another, means being vulnerable to the actions of the other. The willingness to be vulnerable will partly be determined by the extent to which a party is really able to fulfil its promises. According to Mayer et al. (1995) this ability depends on the specific technical skills and competences needed for the situation.

Lewicki & Bunker (1995) describe the whole process of trust building and divide it in phases. The first phase they distinguish is calculus-based trust. This trust is derived from consistency of behaviour that leads to expectations that the other party will behave predictably; this trust could be determined by the perceived costs and benefits from staying in the relationship vs. the costs and benefits of cheating on the relationship. Calculus-based trust is sustained through a clear deterrent which is likely to occur if trust is violated.

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Communication Another, more generic antecedent for trust that is often discussed by trust scholars in varying ways, is communication. By studying relationships between 204 independent automobile tire retailers and their suppliers Morgan and Hunt (1994) found, among other factors, communication as significant antecedent to trust. Communication was defined as the formal and informal sharing of meaningful and timely information between parties. Also Das & Teng (1998) suggested communication and information exchange as a point of attention during trust building. Partners can avoid conflicts by constantly discuss differences. Van Ees & Bachmann (2006) describe communication as an antecedent to trust in the same way, but more specifically. They discuss that interpersonal trust builds on frequent face-to-face contacts. Two arguments endorse this proposition; misplaced trust tends to be low because information about the potential trustee is available and untrustworthy behaviour can immediately be sanctioned.

Bacharach and Gambetta (2001) introduce communication from a somewhat different point of view. They propose that many trust precursors as suggested in the literature indeed influence the trust in a relationship, but the extent of the effect of the precursor is dependent on the extent in which the precursor is noticeable to the other party. For instance, a person or organization can be very capable to carry out certain activities, but the other party must also be acquainted with this capability. In other words, the performative acts of self-presentations influence the effect of the trust enablers. Bacharach and Gambetta call the signals that form the empirical basis from which the trust-giver makes the decision for the first move in the development of trust manifesta. Hence, communication in the form of manifesta can be seen as a moderator variable between other precursors and trust. Creed & Miles (1996) describe the function of communication in a way that perfectly fits in the point made by Bacharach & Gambetta. They state that communication facilitates the process of proving trustworthiness and credibility to each other.

Not only communication between the trustor and the trustee influences the trust within a relationship. Mayer et al. (1995) notice that also the credible communications by others determines the extent to which a party trust one another.

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Summarized, communication can be seen as an independent variable influencing trust from various viewpoints. It can also be seen as a moderator variable, determining the impact of other dependent variables.

Integrity and consistency The earlier described research by Morgan and Hunt (1994) on independent automobile tire retailers and their suppliers also pointed out that integrity plays a major role in trust building. Not surprisingly, they state that opportunistic behaviour lowers the level of trust within a business relationship. Opportunistic behaviour is adopted from Williamson (1975) and defined as self-interest seeking with guile. Also Mayer et al. (1995) portray integrity as an important factor in trust building activities. According to them, integrity is determined by the consistency in past actions of a person, the credible communications about a person and to which extent actions are consistent with words. This is also a good example in which one factor is complementing another. Communication is associated and preceding to integrity.

Norms, values and friendship When partners share values, they are more committed to the relationship (Morgan & Hunt, 1994). Mayer et al. (1995) portray this commitment as benevolence, determined by the specific attachment to a person. Also Creed & Miles (1996) recognize this mechanism, but describe their point a little bit more specifically and appoint characteristic similarity as an enabler of trust between parties. Special attachment is not only created by existing similarity but also by adapting to each others norms values and needs. Das & Teng discuss interfirm adaptation as a trust building technique. Trust is earned from partners if one adapts to the needs of cooperation in partnerships (Heide & John, 1992). A willingness to do this, even if it means financial or other concessions, would earn trust from the partner. Consequently, making adaptations according to the needs of the partner catalyses the process of trust building. However, an attachment or commitment cannot already exist at first sight. As discussed before, Lewicki and Bunker (1995) divide the trust building process in several phases. Trust in the last and most solid phase is called identification-based trust, and is created because parties develop a social bond with each other based on mutual appreciation of each others needs. Identification-based trust is also created by having collective identity, collocation of personnel, creating joint products or goals, and commonly shared values.

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An overview Trust research has been very popular the last decades. Many research, however, is conducted on different levels of analysis, from different viewpoints and certainly not as a coherent whole. A great overlap is visible in the factors that explain how trust is built and many similar concepts are given a different name. To create an orderly overview of the above described trust literature, and to gain insight in the overlap, a table with the discussed antecedents is presented below. The trust building antecedents are divided in five main categories.
Trust antecedents Incremental trust building and reciprocity Experience of reciprocity Prior satisfactory Longer time positive experiences Anticipatable behaviour of other Risk taking Incremental commitment Slow process of exchange Equal return on investment Routine & Rules Creed & Miles 1996 Gulati, 1995 Van Ees & Bachmann 2006 Lewicki & Bunker 1995 Das & Teng 1998 Bowman & Hurry, 1993 Burt and Knez, 1996 Das & Teng 1998 Van Ees & Bachmann Authors

The first steps in trust building Propensity to trust Locating a partner with a good reputation Possibility of deterrence if trust is violated Skills and competences Mayer et al. 1995 Das & Teng 1998 Lewicki & Bunker 1995 Mayer et al. 1995

Communication Communication Frequent face-to-face contact Communication and information exchange Manifesta (trustworthiness is noticeable) Credible communications of others Morgan & Hunt 1994, Creed & Miles 1996 Van Ees & Bachmann 2006 Das & Teng 1998 Bacharach & Gambetta Mayer et al. 1995

Integrity & consistency Lack of opportunistic behaviour Integrity (consistency in behaviour) Morgan & Hunt 1994 Mayer et al. 1995

Norms, values & friendship Institutional framework Shared values Benevolence (special attachment) Similarity Social bond because of mutual appreciation Adapt to norms, values and needs of each other Arrighetti 1997 Morgan & Hunt 1994 Mayer et al. 1995 Creed & Miles 1996 Lewicki & Bunker 1995 Das & Teng 1998

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2.4 Trust in BoP studies The BoP phenomenon as discussed in the introduction is a very recent one and literature on the subject seems to develop increasingly. So far, most of the publications, especially the earlier ones, are rather prescriptive and normative, i.e. provided information is not profoundly based on empirical evidence. Trust building practises are mentioned a lot, but largely to emphasize the importance of it or as a side effect of other practises and not because it is specifically studied how to build trust. Hence, this part of the theoretical framework is used to explore ideas and initial findings on trust building in publications about strategies for the BoP.

Already the first article speaking in terms of BoP, the fortune at the bottom of the pyramid (Prahalad & Hart, 2002), notices the importance of building a personal relationship with the poor, or as they describe, to build a local base of support . They exemplify this proposition with the situation in which a sunflower-seed company threatens the existing power structure within the community by empowering some of the poor involved in the company. As a result, two of the companies offices were burned and local politicians revolted against the firms seed business. After investing in the community with training, education and supply of farm inputs, they improved the relation with the farmers. Nowadays they are seen as a friend and the political opposition has vanished. With respect to the creation of business relationships, London & Hart (2004) mention the informal character of BoP economies and that relationships in informal economies are grounded primarily in social, not legal contracts. Informal, social boundaries often dominate over formal legal documentation they continue, and hence trust cannot be obtained by having the backup of enforceable legal systems. Consequently, insight in social infrastructures is necessary to successfully operate in this business environment.

By interviewing MNC managers from four multinationals involved in BoP market entry, London & Hart discovered that western companies can receive legitimacy of local people by collaborating with non-traditional parties or people. Seelos and Mair (2007) emphasize the value of collaborating with trustable partners by discussing a case in which the Norwegian telecommunications company Telenor partnered up with the Grameen Bank, which was founded by Muhammad Yunnus, the 2006 Nobel Peace Prize winner. Together they founded for-profit ventures bearing Grameens name. The objectives of both organisations could be pursued by this venture. The venture became successful for a greater part thanks to the well 17

know Grameen brand. Other important non-traditional partners are for example the so called fringe stakeholders (Hart, 2007) like individuals and small companies in local communities. Based on experiences of organisations like Nike, Shell and the Word Trade Organisation, Hart & Sharma (2004) state that firms can develop intimacy and trust with fringe stakeholders by generating complex interactions. Complex interactions are explained as interactions in which managers from MNCs empathize with diverse and disconfirming perspectives of these stakeholders and try understand their culture, thought processes and language.

In another BoP related article, Hart and London (2005) explain the success of Grameen Bank and Honey Care Africa because of their embeddedness in the BoP communities. By building partnerships from the ground up with local entrepreneurs, NGOs and local governments, they created a web of trusted connections through which they became integrated in the local communities. Creating embeddedness takes a lot of time, but brings along the advantage that it cannot quickly be duplicated by competitors. Also Wheeler et al. (2005) discuss the importance of a trust-based, densely networked environment. According to their examination of 50 case studies, it are the development organisations who can act as catalysts for these partnership opportunities by convening dialogues between local and international businesses. Arnould & Mohr (2005) go more deeply into the functioning of embedded ties. Natural channels in BoP markets are embedded in relationships and networks. For being successful at the BoP, they contend, its critical to create an understanding of the embedded ties in a community and to cultivate and mobilize them. They state that trust in these networks is often produced by culturally specific, familial, ethnic and religious ties. When a dominant actor is granted decision-making authority on behalf of the community, it is likely that he has developed the ability to mobilize the embedded relationships and norms. In addition, Stuart Hart (2007) mentions the importance of avoiding a short-term commercial agenda. He underpins this statement with an example of Cemex. In order to find possibilities for a home building business in Mexico, Cemex managers had to live in shantytowns for six months. One of the managers said they had to remove the cement chip from their brains which led to unanticipated insight in how they could serve the real needs of the communities. This, in combination with the long term stay created the crucial trust with the local people. Finally BoP ventures become trusted over time, when the (financial) outcomes are felt by the ventures local partners and the community in which it operates (London, 2007).

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It appears that the BoP literature contains quite some ideas about how trust is built with local people in communities of developing countries. The table below shows a summary of the salient catalysts appointed by BoP scholars.

Contention on trust building

Author

Invest in the relationships by providing training, education and farm inputs

Prahalad, 2004

Create insight in, and use social infrastructures, often determined by culturally specific, familial, ethnic and religious ties

London & Hart, 2004; Arnould & Mohr, 2005

Become related with trustable people or brands

London & Hart, 2004; Seelos & Mair, 2007

Create complex interactions by empathizing with diverse and disconfirming perspectives local people and try to understand their culture, thought processes and language

Hart & Sharma, 2004

Take the time to create a web trusted connections by building partnerships from the ground up with local entrepreneurs

Hart & London, 2005

Avoid short-time commercial agendas

Hart, 2007

Have the local people feel the financial outcomes

London, 2007

The above listed trust building activities are put forward by academics based on their general studies on BoP phenomena without departing from prevailing trust literature. However, prevailing trust research could contain many trust enabling factors which are also relevant for companies entering the BoP market.

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2.5 Insights from development studies and research on cross-cultural collaboration Non-governmental organisations have many experience with building trust in the concerning context. A salient view within the field of development research, which is likely to be useful for the BoP proposition, is the importance to distinguish formal and informal institutions (i.e. Leach et al. 1997). Informal institutions are socially embedded and exist because of the shared acceptance of the actors involved. To become trusted, it is important to anticipate on the informal institutions. Participatory Rural Appraisal (PRA) is a suitable approach to make use of informal institutions (Chambers, 1994). Hence, insights from this approach could also be valuable for private corporations working in local communities. PRA is used for development projects and programmes and involves the knowledge, opinions and perception of rural people. Robert Chambers (1994) claims that by using this approach, rural people are more willing to collaborate and provide high valid and reliable information. He puts forward the following shifts in mechanisms to achieve the pursued collaboration: from etic to emic, closed to open, individual to group, verbal to visual, measuring to comparing, and from extracting information to empowering local analysts.

Next to the lesson from development studies, insights can be derived from research on cross cultural collaboration between private corporations. Although dealing with a corporation is different that dealing with an individual or a community, there is some similarity with respect to overcoming cultural differences.

Child and Faulkner (1998), discuss that there is more risk and uncertainty involved in collaborations between parties with a different nationality. Cross-national differences between partner firms with respect to culture, law, politics, and trade policy give trust an extra important, but also fragile role in the collaboration (Child and Faulkner,1998). Cultural barriers obstruct initial trust building because (potential) partners are less able to rely on interpersonal similarity, common background and experience. These obstruct the contribution to the mutual attraction and the willingness to work together (Mayer et al., 1995).

Other research shows that the precursors of trust as described earlier, are applicable in different cultures, but the extent to which factors influence trust differ across cultures. For example, Schoorman et al. (2007) argues that task-oriented cultures as found in European countries, seem to have a high initial trust of strangers and therefore a high propensity to

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trust. Conversely, relationship-oriented cultures, like in African countries, need time to develop a relationship prior to working on the task.

It turns out that cultural differences obstruct trust building and hence a more specific approach is needed in the concerning context. There are several studies that show how parties in crosscultural collaborations can overcome these barriers in general. For example, Johnson et al. (1997) studied trust enablers in an international cooperative alliance between Japanese and U.S. partners and found significant trust enablers. They state that transactions crossing cultural boundaries are calling for cultural sensitivity which is the firms awareness of cultural differences and the ability to manage them. This statement was based on research of several scholars in several types of relationships (e.g. Johnson et al., 1997). So, in addition to the already discussed interfirm adaption of Das & Teng (1998) a partner must not only invest money, managerial effort and time in creating an understanding of the partner's needs, but also in understanding and managing its culture. Cultural sensitivity depends on the ability to relate to cultural counterparts and colleagues, the understanding of the other culture, the ability to adapt, received sensitivity training, and the willingness to communicate and make relationships in the other culture. Johnson et al. (1997) found the lack of cultural adjustment as a major reason for failed cross cultural collaborations.

2.6 Comparing visions on trust building The literature on BoP, development and cross cultural collaboration shows similar ideas about trust building, but often on studied within different contexts, on different levels or formulated in different ways. However, these ideas can be subdivided into the categories of antecedents as found in the general trust literature. In other words, lifting these ideas to a more abstract level of observation, make them fit almost perfectly within the findings of the prevailing trust research. By doing this, it is subsequently possible to discover if specific antecedents from the trust literature are more popular within the BoP and related fields than others. If this is the case, it will possible to discuss the findings of this thesis more precisely in the light of the studied literature. The tables on the next page present how this subdivision can be made.

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BoP literature Invest in relationships by providing training, Education and farm inputs.

Trust literature Incremental trust building and reciprocity - Longer time positive experiences - Risk taking - Incremental commitment - Slow process of exchange

Create insight in, and use social infrastructures, often determined by culturally specific, familial, ethnic and religious ties. Become related with trustable people or brands.

Norms, values and friendship - adapt to norms, values and needs of partner, integrate in institutional framework The first steps in trust building Locate a partner with a good reputation

Create complex interactions by emphasizing with diverse and disconfirming perspectives of local people and try to understand their culture, thought processes and language. Take the time to create a web of trusted connections by building partnerships from the ground up with local entrepreneurs.

Communication - communication and information exchange - frequent face to face contact

Incremental trust building and reciprocity - incremental commitment Norms, values and friendship - adapt to norms, values and needs of each other - create social bond because of mutual appreciation

Avoid short-time commercial agendas.

Incremental trust building and reciprocity - longer time positive experience - slow process of exchange - incremental commitment

Have local people feel the outcomes.

Incremental trust building and reciprocity - equal return on investment

Development literature Anticipate on informal institutions.

Trust literature Norms, values and friendship adapt to norms, values and needs of partner, integrate in institutional framework

Involve knowledge opinions and perception of rural people: from etic to emic, closed to open, individual to group, verbal to visual, measuring to comparing, and from extracting information to empowering local analysts.

Norms, values and friendship adapt to norms, values and needs of partner, integrate in institutional framework Communication communication and information exchange frequent face to face contact

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Cross cultural collaborations literature The extent to which factors influence trust differ across cultures.

Trust literature Norms, values and friendship adapt to norms, values and needs of partner, integrate in institutional framework

Transactions crossing cultural boundaries are calling for cultural sensitivity which is the firms awareness of cultural differences and the ability to manage them. Cultural sensitivity depends on the ability to relate to cultural counterparts and colleagues, the understanding of the other culture, the ability to adapt, received sensitivity training, and the willingness to communicate and make relationships in the other culture.

Norms, values and friendship adapt to norms, values and needs of partner, integrate in institutional framework Norms, values and friendship adapt to norms, values and needs of partner benevolence (special attachment), integrate in institutional framework Communication communication and information exchange frequent face to face contact

The three discussed disciplines show an apparent conformity to the importance to adapt to norms values and needs and the necessity to integrate in the institutional framework of the (potential) partner. Also communication is mentioned a lot as an essential factor. It will be interesting to study if these factors also stand out in practise. The absence of many other trust enablers mentioned in the general trust literature, does not mean that those factors are not applicable in BoP ventures. Hence, the next chapter will describe the used methodology, departed from, but not bounded to the factors stood out in the tables above.

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3. Methodology
3.1 Research design The introduction and theoretical framework pointed out that trust building in the context of the BoP is a relatively new phenomenon. According to Eisenhardt (1989), a qualitative case study is appropriate to understand relationships between variables within an unknown context. Also George & Bennett (2005) state that an unfamiliar context requires a detailed consideration of contextual factors, which is extremely difficult to do in statistical studies, but is common in case study. Consequently, to inductively identify causal paths and potentially new variables, a heuristic case study approach is chosen to explore trust building processes in the BoP (George & Bennett, 2005, p.75). Since the amount of time was limited and suitable cases to study were not proximate, a single-case research design is used to conduct the research. The theoretical framework provided potentially suitable concepts which could be useful to guide the research. Hence, methodological insights are derived from the grounded theory approach (Glaser & Strauss, 1967). Grounded theorists, do not construct theory by testing hypothesis, but have theory slowly emerge by creating an interplay between data collection and analysis (Charmaz, 2006). Data collection is often started by using sensitizing concepts. Charmaz (2006) states that these concepts give you initial ideas to pursue and sensitize you to ask particular kind of questions about your topic. In this thesis, the trust antecedents on page 16 are used as sensitizing concepts and are used to determine the initial interview questions. The section about data collection shows examples of the initial interview questions.

The selection of the studied case is based on two kinds of criteria. The first kind are criteria to select a genuine BoP case. Hence, this thesis used a case that meets the criteria of the BoP-asproducer venture, as described by Ted London (2007): a scalable profit-oriented venture, operating in the informal economy, catalyzed by external participation and co-created with those at the BoP, that connect BoP producers of goods and services to non-local markets. The second kind of criteria had to indicate that there is a relationship of trust between the MNC and the local people within the BoP communities. The definition of trust, as outlined in the theoretical framework (p.11) is used to determine the actual presence of trust in the case. This means that the local people had to be willing to be vulnerable to the actions of Unilever based on the expectation that Unilever would perform a particular action important to the local parties. The next section provides an elaborated case description.

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3.2 The case About ten years ago a Dutch Unilever manager re-discovered an edible oil that could be abstracted from the nuts of the African Allanblackia tree. After profound research in the laboratory, it seemed that the oil from this Allanblackia nut had very good characteristics for soap, shampoo, butter and all kind of other products produced by Unilever. However, Unilever found that this Allanblackia tree only grows in difficult passable areas in African countries and was therefore hard to obtain. Hence, it was decided to developed supply chains for this oil, in which they would collaborate closely with the people in the remote areas where the Allanblackia tree grows. In first instance to have them collect, dry and sell the nuts, but nowadays also to manage nurseries where techniques are explored on how to grow the Allanblackia tree as quick as possible. In the near future, farmers in the communities will have the Allanblackia tree as a new crop on their farm land. Unilever has the advantage that it has offices all around the world. Therefore it was possible to involve Tanzanian Unilever people in the Allanblackia activities in Tanzania. Next to it, Unilevers strategy is to organize supply chains in a sustainable manner, which means that activities should not have a negative impact on people or the environment. Consequently, one of the first steps taken was the involvement of the international NGO called SNV. SNV worked with communities through local NGOs and defines its task as connecting peoples capacities. In this situation it meant that SNV deployed several NGOs to reach the communities located in the areas where Allanblackia trees grow. Unilever also involved a NGO that promotes the conservation of the forests in Tanzania and is connected to the government, to cover that side of the picture. As a synergetic team, communities were approached and local people were moved to create the supply chain. These local people received trainings on all kind of subjects. The trainings were related to Allanblackia, but also to other, more general business subjects. At this very moment in Tanzania, the Allanblackia supply chain is managed and executed solely by Tanzanian people. The supply chain is beneficial to all parties. At the one side, it creates businesses for people in remote villages and hence eradicates poverty in the poor African countries. At the other side, it creates an efficient way for Unilever to obtain the oil that is very useful for them. This thesis studied the way in which this supply chain was created in Tanzania in order to obtain a clear understanding in which way Unilever managed to build trust in local communities.

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3.3 Data collection To acquire a comprehensive insight in the trust building process in the Allanblackia case, several involved parties are interviewed. At the one side, Unilever representatives and the NGOs are interviewed to discover the used strategy to create willingness to collaborate among the villagers. In addition, several relevant documents are collected. At the other side, the villagers and their leaders are interviewed to see how the strategy defined by Unilever and the NGOs is received in the villages. As it comes to building theory from case studies, purposive sampling is preferred rather than random (Eisenhardt, 1989). Hence, interviewees from the villages are selected based on the criteria (a) location, (b) role in the project, (c) years involved and (d) gender. The interviews, together with the documents provided a broad view on the trust building process.

The following data was collected: 12 interviews with villagers who supply Allanblackia nuts or manage nurseries o Villagers are selectively sampled to secure variety in gender and village 2 interviews with village leaders 4 interviews with NGO representatives 1 interview with the Tanzanian Allanblackia manager 1 interview with the Dutch Allanblackia manager 1 memorandum of understanding between Unilever and their Tanzanian country partners 1 report of mobilization visits of Unilever and NGOs made in the villages 1 Allanblackia local market survey report 1 annual report of the strategic partners 2 minutes of strategic meetings

The interviews were semi structured. The first questions were aimed on discovering if trust was really present in the relationship by compare relationship aspects with the trust definition as derived from the literature: the found willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor. Hence, the first questions were about the way in which village members turned out to be vulnerable to the actions of Unilever and what particular action Unilever would perform that was important to them. All interviewed villagers mentioned the

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investment of time and efforts as the factors that made them vulnerable. Creating a new source of income was mentioned as the action that was important to them.

Following Charmaz (2006), sensitizing concepts were used to determine the subsequent questions. Hence, interviewees were asked in which way they experienced: The first steps Unilever took to approach them Unilevers adaptation to their norms, values and friendship the communication by Unilever Unilevers integrity and consistency the increase of Unilevers and their own investments in the relationship

Furthermore, interviewees were asked about factors in general that made them willing to collaborate with the Allanblackia project. The text box below shows four random examples of questions based on the sensitizing concepts.
Do you think that Unilever has the right skills and competences to do what they promised? Which skills and competences are needed? Can you name specific situations in which Unilever showed these skills and competences? How did your opinion about the skills and competences of Unilever evolved? What particular things happened that it evolved like that?

Do you feel connected with Unilever because you have shared values? If so, which shared values? Do you think this is important? Can you give me some specific examples in which Unilever showed these values? How did these shared values evolved? What particular things happened that it evolved like that?

Do you feel connected with Unilever because of friendship? If so, how was this friendship created? If not how could this friendship be created Do you think its important to have a friendship? Can you give me some specific examples in which Unilever showed this friendship? How did your friendship with Unilever evolved? What particular things happened that it evolved like that?

Have their been persons in you acquaintances that had an influence on your decision to collaborate with Unilever/party like family, friend, village members etc.? How important is the opinion of these persons, like family, friends, village members, etc in making your decision to collaborate? Are there particular persons in your acquaintances whos opinion is of special importance to you? What would you have done if this persons recommended you not to collaborate with Unilever?

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Conducting the interviews

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The 12 interviewed villagers and the 2 village leaders did not understand English. Therefore, interviews were conducted in association with a translator. During these 14 interviews, questions were asked in English and directly translated into Swahili. Next, answers were given in Swahili and translated back into English directly. To secure the proper interpretation of the questions by the translator, the questions were first translated on paper from English to Swahili by the translator and subsequently cross-checked by the Tanzanian country manager. The other interviews with the 4 NGOs and the Tanzanian country manager are conducted in English and the interview with the global Allanblackia manager is conducted in Dutch.

The context in Tanzania is very different from the west, both the physical environment and the cultural aspects. By living with Tanzanian people it became easier to understand the communities taken-for-granded assumptions and rules and hence could give a better understanding of the case (Charmaz, 2006). In analyzing the results, this information is used to shape the idea of the context where necessary.

3.4 Data analysis Grounded theory suggests to start analyzing data already during the period of data collection. Hence, during the first period of interviews, data was analyzed to refine the sensitizing concepts, but also to discover the underlying actions that Unilever took to build trust. For example, already the first interviewees mentioned the important role of the country executive team in the trust building process and. Consequently, questions about the role of this team were added to the interviews. Furthermore, the data was analysed to discover leads to other relevant units of observation. For instance, during the interviews with villagers, it appeared that the village leaders played an essential role in the trust building process. Therefore, it was necessary to organize interviews with some of the village leaders. Refining the sensitizing concepts during the period of interviewing resulted in the following concepts: Strategic intentions (of Unilever) Forming of a country executive team Research on economic, political and social situation Trust building in the communities Communication

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In the end, it resulted in more that 17 hours of interviewing with 20 different people (see list in paragraph 3.3). All these interviews were digitally taped with a memo recorder. Subsequently, the recorded interviews are transcribed with an application called F4.

To bring meaning to the data, all transcribed interviews and the obtrusive data were analyzed with Atlas.ti. The concepts described above are not used during the coding process. This could have obstructed the open attitude towards the data and neglected important information about Unilevers actual activities that cause trust building processes. Hence, an initial coding process as suggested by Charmaz (2006, p.47) was used. The objective was to reduce the data by deriving the processes and activities that Unilever used to build trust. To achieve this, data was coded incident to incident (Charmaz, 2006, p.53) by looking for and preserving actions from all parties involved in the Allanblackia project. This part of the coding process resulted in 330 quotations coded with 46 different codes. Next, to determine the adequacy of these codes, a focussed coding process is carried out (Charmaz, 2006, p.57). The trust codes appeared to have a fairly great overlap and interconnection. Hence, the 46 codes were reduced to 14 codes that made the most analytic sense. In some cases this meant that a group initial codes fit in another initial code and in other cases a new focussed code was made to embrace a group of initial codes. The 14 focussed codes are formulated as mechanisms. The concept mechanism is derived from Campbell (2005), who explains mechanisms as the processes that account for causal relationships among variables. Mechanisms are the nuts, bolts, cogs, and wheels that link causes with effects. An example of a mechanism that emerged from the focussed coding process is manage transparent communication.

The formulated mechanisms were, however, no isolated factors that caused the trust separately. The interconnection between the mechanisms and the temporal ordering played an important role in the process of trust building. Hence, a theoretical coding process (Charmaz, 2006, p.63) is used to specify the relationships between the mechanisms. This resulted in ordering the mechanisms on a theoretical, higher level of abstraction. The mechanisms are subdivided into theoretical variables based on higher level consequences and temporal ordering. The next page shows an example of the coding process.

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Quotation (330) First good communication among the actors, frequently communication, you have to communicate, you have to continue communication, communication is a key. If you stop communicating you then you start raising suspicion and probably people will start moving their own direction

First code (46)

Mechanism (14)

Theoretical Variable (5)

Communicate Yes, you build that personal relationship. Fidelis was very respectful, listening to them, even if they were talking about things that didn't had a connection to AB in any sense, he listened and consulted and tell them something. And if he knew he couldn't do what they asked, he will tell them: I'm sorry. Say the truth. Its so important, its a very simple rule in everyday life, but companies dont do it. They make promises they cant fulfil. Transparent A part from all this, the farmers trust is gained during gross margin analysis. For them to understand the business idea, are we making a profit or not. So showed them the costing, this is about making it clear, about showing them there is money here. You can get some money, this is about the company getting up in that huge meeting and talking about the contract, and discussing, they dialog, and the most important: the company must not default Create insight Because you just tell them: this is how the AB seeds are being sold at the international market, this is the costs which are involved, transporting it from here to Netherlands, and this is the costs which is involved in processing it to be an edible oil, and this is how its going to be sold. By then it was a sort of estimation, it was a future thing but it was an investment. You're not selling anything, you're not bringing anything it was money being used to develop the supply chain. So it was very transparent right from the beginning, farmers were told, this is how much is going to be paid and then, because these seeds were not being sold at all. Now I remember the first place, when we came in people got 150 shillings per kilo. But that has just been increasing, now its 250. So the farmers are like, if they believe in you, and they see there is no hidden agenda, I think they dont have a problem with working with anybody in the project communication Communication clear and constantly

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4. Results
4.1 Introduction The process of trust building took and still takes place in different phases, on different levels, and in different ways. This widespread existence of trust indicates that trust building starts already before the beginning of a BoP venture, and continues to be interwoven in all details of the relationship as long as it last. The next paragraphs discuss five factors that influenced the trust building process and their specific role. Three of the factors are recognized as independent variables, one factor as a moderator variable and one factor as both an independent and moderator variable. Furthermore, the accompanying mechanisms that account for relationships among the trust building factors and trust itself are discussed.

4.2 Build trust incrementally Our relationship is more than a business relationship, because they know us and they trust us. That trust has taken years to build.

This quote of the Dutch Allanblackia manager characterises the importance of building trust in an incremental way. Unilever experienced that people increased their trust bit by bit and scheduled the first year to build trust. In the beginning just a few people in the villages decided to collaborate. In general the villagers first wanted to see what happened. Hence, they started to put little efforts in the project and once they experienced the returns of Unilever, they started to put more and more efforts in it. The company have to be aware of the importance of building trust incrementally even before starting the project, because the strategic intentions influence the whole process for as long as it last. The quotes in the table below reflect the experiences of the people involved in the Allanblackia project and endorse the incremental way in which trust is build.

Incremental trust building Dutch Allanblackia manager they wont invest a lot of time and effort when youre coming by the first or the second time, or ever the third time. They first want to see if theres really money, if the weighting is done in an honest way and that sort of things. They first start with collecting a few seeds, like one kilo, and after that they collect another kilo, and then the see they get their money and they decide to collect a little bit more next time. Like that is slowly increases

already in the beginning it was clear that we wanted a long term relationship, and this is something that shines through in all behaviour, things that you say but also what you expect

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from others. Sometimes we invested almost a year in a community group before they started collecting or selling the nuts. We could do this because Unilever had a lot of money to pump into the project, so actually this was a luxurious position, a small company could never have done this. Villagers to collaborate with a person you first need to know the person, so it took us a while before we came to know that these people have a good intention

he came here three times and he was still talking about the same thing, and thats why we thought, this man is serious, he will help us NGO there are always the early adaptors, you dont miss them anywhere

Interviews showed that incremental trust building can be divided in two factors, with the characteristics of independent variables. The first factor to create the necessary base for trust building is the outset manifestation. This relates to the first impression Unilever made with the communities they approached. Some essential steps in making the first contacts, created a trusted atmosphere for building a structural relationship. The second factor is reciprocity. This means that the parties experienced that both sides invested in the relationship. The following paragraphs will elaborate on both components of incremental trust building and explain the actual mechanisms used by Unilever that caused trust.

4.2.1 Outset manifestation Although trust is build incrementally and investments in the relationship increase over time, there have to be some first steps to get the process going. In Unilevers case there were some clear steps that started the trust building process in a fruitful manner. Being aware that the first impression matters a lot might sound obvious. However, it might be more excessively relevant as one could expect. People in the Tanzanian communities are very open to new ideas, especially if it is in their favour, but if the first impression offends them, it will be very hard to come back ever again. The Tanzanian Allanblackia manager explains it as follows:
it is about the first impression, because if you mess up during the first contact, youre ruin the whole thing

And one of the NGO people tells:

The first impression matters, you have to meet the village leadership and sit down and talk with them about your plan. If the objective is benefiting them, then it is fine and youre most welcome

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Unilever used three mechanisms to manifest in a trustable manner at the very outset, namely: collaborating with trusted parties, showing skills and competences in a practical way and writing of agreements.

Mechanism 1: Collaboration with trusted parties The Tanzanian villages were approached through their village leadership, which means that the approach of a new village started with a meeting with the village leadership to explain the ideas. Hence, collaboration with trusted persons concerns first of all the parties that are present at the first meeting with the village leadership. Locally active NGOs are a often a trusted party in this meetings, but also the presence of government representatives from the district-level and parties responsible for conserving the communities environment provided confidence about Unilevers intentions. However, for approaching the villagers themselves, it were obviously the village leaders who played the role of trusted person. Without the village leaders involvement in approaching the villagers, Unilever would not have been able to create a relationship with the villagers at all. Next to the village leaders, it appeared very important to acknowledge other authority within a village as well. Due to the democratic system in the villages, it were for example the elders (older people within a village) who also had a great influence on the decision to collaborate. Even when the first contact is made and the project structure is shaped it is important to keep the trusted-person-principle in mind. Village members who are responsible for management tasks within the project have to be trusted. For instance, one person within a community is democratically appointed as a clerk and is responsible for the central collection and payments of the nuts. In one of the communities, farmers mentioned that they didnt trust this person, which indirectly influenced the relationship with Unilever. The quotes below, typically point out the importance of collaboration with trusted parties.

Outset manifestation: collaborate with trusted parties NGOs so normally there is this tendency of believing that private organisations are always for maximizing their profits. Then how are they sure that farmers are not going to be exploited? Thats why we have the NGOs in the partnership, these are civil society organisations, whom theyll believe will be there for the benefits of the village members

we went with the representative from the forest conservation so we were even more trustable, the guy was already walking with the communities on tree planting so they knew his face Villagers After Novella talked to the leadership, the leadership talked to the villagers. They told that the

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people from Allanblackia had very good ideas, so after that we decided to cooperate, to work with Novella. The leadership of this village influenced our decision

when they came here, they first met our elders and they started to discuss it with our elders, before they came directly to us. And even the village government itself depends on the elders. First you have to get the ideas from the elders before you do anything

we distrust the clerk, because he is always giving the prices [won as part of the AB project] to his relatives

Mechanism 2: Showing skills and competences in a practical way Another important mechanism with respect to outset manifestation, is showing you have the right skills and competences to be able to do what you promise. However, the criteria villagers use to determine skills and competences are of a more practical nature than most western companies are used to. In a western society, trust in skills and competences is to be found in the name of a company, in a rsum or portfolio or through references. People in the communities just want to see some practical examples. The following quote of the Dutch Allanblackia manager sketches the idea:
you dont show them your CV or references, but for example bring a Blueband packet and say, you see who is manufacturing that? Its Unilever.

Besides, people within the concerning remote communities want to feel that this alien large company knows how to handle and dont like it if you tell them you dont know something.

Outset manifestation: show skills and competences Dutch Allanblackia manager Villagers you need to know what you want and you need to have knowledge and experience. In the Netherlands its sometimes respected to say, I dont know but lets find out together. Well, that is an attitude they dont like in the communities you have to know the capability of the person first, and then you create friendship to work together, I can not being friends with you if I dont know your behaviour

And even after they produced the oil, they came back with a sample, so they are showing the oil that is produced from the nuts

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Mechanism 3: Writing of agreements The third mechanism to create a sound outset for building trust, is the writing of agreements. In principle, legal agreements for this kind of business in Tanzania are useless. However, agreements play a very important role in another way. Although legal enforcement of contracts is barely possible, people within the communities see it as an important confirmation of the understandings, especially when trusted parties endorse the written agreements. Unilever signed agreements with the leadership of the villages. The agreements contains what the farmers are committing themselves to do, and what the company is committing itself to do. The local NGOs are facilitating these contracts and are also seen as a witness, because of their trusted capacity. So, although agreements arent legally relevant, they do function as a commitment to one another, especially when it is witnessed by a trusted party.

Outset manifestation: write agreements endorsed by trusted parties Dutch Allanblackia manager people from the village cant get Unilever to court efficiently, and Unilever doesnt feel like proceeding against people from those villages Village leader we have agreed to work consistently, we have to see consistency from the Novella people, and they have to see consistency from the leadership

4.2.2 Reciprocity The second factor under the umbrella of incremental trust building is reciprocity. This means that parties within a relationship act in a cooperative way because the other party shows cooperation as well. In other words, trust itself causes more trust over time. It is already discussed that this process starts with little investments and extend based on previous positive experiences about the other parties behaviour. Unilever influenced this process by using four mechanisms: Invest constant and structural in relationships, make the project community property, do what you promise and have periodical evaluations.

Mechanism 1: Invest constant and structural in relationships The first mechanism is investing on a constant and structural base in both the professional relationships and the personal relationships. In this way, Unilever and its partners did not only develop the villagers to work with Allanblackia, but also showed a great deal of devotion. The 36

Allanblackia project is investing in the communities in several ways. They are taking care of community development, training the farmers in business skills, forming individuals in groups to make them a legal entity and several other things. To make the Allanblackia project even more living in the village, all kind of activities were organised. For example, individual villagers and whole villages can win prices for collecting the most nuts. Villagers in the concerning communities are very grateful to Unilever because of this investment. The story below, told by an involved villager is a typical example of how the investment in professional and personal relations is received:
you know, before this we were ignorant, we didnt have any knowledge, so this company came and started to educate us. When you are doing the job, you have to calculate the costs, costs of farming, of taking care of the farm, of harvesting and finally you know the total costs. When you are selling you know if you can get profits or not. And they also told us about gender. Now we are living with our wives without fighting and we even share what we have at the house. They told us to live in equity with our wives. For example myself, I sold the nuts and told my wife how much, and we decided together to buy a cow, and now we have a cow.

The following table shows endorsing quotes with respect to investment in relationships:

Reciprocity: invest constantly and structural in professional and personal relationships Villagers I couldnt invest the same amount of time Im investing now because I didnt really had a picture of what was going on. But now, also because they have trained us and gave seminars we are aware of what is going on. But before, I couldnt invest that much

they succeeded in creating friendship because they have been visiting us so frequently

First I had some doubts, but when they were coming so frequently and gave the seminars and kept on explaining everything, all the doubts were gone

according to our society, its very important to create friendship with people and spend time with them because they do not have knowledge. You have to keep close to them and keep raising awareness. Collaboration couldnt be possible without that kind of friendship creation

they came here and started to create a friendship, and they told the village leadership that for every kilo Allanblackia, 50 shilling goes directly to village development

I trusted them because they came here and spend all their time and energy for the whole week so I thought, theyre serious, there was even a great manager who came all the way from

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Europe to do this thing here NGOs we brought some presents, thats how we make it, so thats a kind of bond, its good in Africa. If you dont do that in a partnership, they think, okay, my organisation is in there, but as an individual they dont really care about me

of course its all trust building, the more you interact, the more you teach them new skills, they will trust you more, they know you better, they are gaining a lot of insight in business, in group formation, we teach them on contracts and on negotiating, so its a whole process, for years

physical presence is very important, you have to keep on visiting, you have to be there for them, we even have an office in Muheza [one of the districts] . Dutch Allanblackia manager Tanzanian Allanblackia manager We are there to do more than business. The training were giving them is on the basics, on business skills like gros margin analysis and making contracts, its not only applicable to Allanblackia, its useful for every crop. We also look at the other crops they produce and get access to markets for that crops, not only Allanblackia Village leader You can even see the competition itself. People are trying to collect more nuts, because the want to win so they get the prices. It challenges a lot. Last year another village collected 10.000 more nuts than mine, next time I want to beat them the farmers value the relationship much higher than the money. They are not willing to trade with someone unless he behaves like you

Mechanism 2: Make the project community property Villagers often seemed to experience that the Allanblackia project is their project and the company is helping them to manage it. This makes the community members more willing to collaborate with Unilever. Unilever managed this for example by appointing the responsible community members in a democratic way. All villagers are involved in these processes. The table on the page displays relevant quotes related to this mechanism.

Reciprocity: make the project community property Villager I trusted them, because they were involving us in every step Village leader in the season we can all engage us in this project, this makes all of us in the same stream

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Mechanism 4: do what you promise A very important mechanism to manage reciprocity is the very simple rule: do what you promise. All interviewees mentioned this as a important detail that made them trust Unilever. Be careful with making promises, and if a promise is made, be sure to fulfil it. The following table provides underlining quotes.

Reciprocity: do what you promise Villagers because I heard and saw that other people were working with Allanblackia, and they were getting what was promised, I thought, okay if other people getting that, I can do it myself as well

we only trust them because the always do what they promised to do NGOs its very important with farmers, because they are easily disappointed. They put their trust on you and if you dont meet their expectations, they are easily disappointed.

especially farmers, if something fails, youll need a good reason to explain. Because if youre working together with them, youll need good reasons why something failed, because if you dont, theyll never trust you again. Tanzanian Allanblackia manager if there was a meeting on a certain date, you have to make sure that youre there, If you agreed to bring the cash on a certain day, you need to make sure youre there, if they say they need bags, you need to buy them and make sure they get them, if you say you are going to open a nursery or bring the material, make sure you are there.

Mechanism 4: Have periodical evaluations The last revealed mechanism with respect to reciprocity is having periodical evaluations with villagers to seek for improvement. If there are grievances and it is discussed, it will disappear the next season. The farmers find these evaluations very satisfying. The meetings are taken very serious by all project partners, and are seen as an essential key in their relationship.

Reciprocity: having periodical evaluations Village leader Villager we sit down with the whole district and we do the evaluation, we discuss what went well and what can improve, farmers, NGOs and the company they are coming twice a year to have a big evaluation, and we always give feedback.

Tanzanian Allanblackia

For example in muheza we meet with 75 people. Very big meetings. So each group brings the chairman and the secretary and the clerk. And each village brings the village chairman and the

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manager

village executive officer. You know why, the group leaders we talk about the farmers interests, the feelings of the farmers. We get that from the group leaders, then the clerk, we talk about challenges facing by leaking things of the farmers. The village government is first of all interested in seeing that its economy is increasing, and they also get 5% of the village income generated by the seeds for development work. so they want the project to be successful. So they address problems from both areas, they are neutral. They not supporting us, they not support the farmers, they support the interest of the government. So they make sure that everything is moving smoothly.

4.3 Consistency Trust building requires consistency in behaviour. Unilevers consistent behaviour is the third factor that made them a trustworthy partner to the community members. It appeared to be particularly important with respect to the way in which villagers are approached by different project partners. Its already discussed above that it is essential to be consistent by doing what you promise. Managing consistency in this context is pursued by the use of two very closely related mechanisms: the consistency in information that is spread in the communities, and consistency in the external project members who are send to the communities. Because of the close relatedness of the mechanisms, they are discussed together.

Mechanisms 1 & 2: consistency in information & consistency in the external project members A lot of different parties are involved in the project. Consequently, it easily occurs that many different people are working on the project within the community, which could lead to the spread of inconsistent or contradicting information. The following story told by a NGO representative vivifies the importance of consistency:
we saw a paprika linkage break down because they werent consistent in their representatives on the ground. This company was bringing another representative each year. The farmers didnt like that. Farmers were already used to a certain way of talking. Now all of a sudden a new person comes in with new rules and new ideas. When somebody new is coming on board, the old face have to introduce the new person and keep on for some time. The handling over process should be done carefully

So village members find it disturbing when continuously different project people coming to the village. External project members have to become known by the village members, and tell the same story. Consistency also provides the opportunity to have the different partners function as a synergetic team. Community members mentioned they felt more confident with 40

the project because it was brought by a team which included all relevant parties. In the Allanblackia project the international development organisation is specialized in partnership strengthening. Among other things, they are putting the involved parties on the same line by showing the shared objectives and the dependence on each other. In this case Unilever wanted to start business in local communities, which make them dependent on NGOs who has to mobilize the communities. The NGOs objective is to eradicate poverty in the communities, which happens through the business initiated by Unilever. Furthermore, Unilever benefits from governmental bodies who are responsible for conserving the forest, but also conduct research on domestication of Allanblackia trees. These organisations give the company also legitimacy. In turn the (non-)governmental bodies need money to do research and conserve the forest, which Unilever can arrange through own funds, but also through external funds. So all parties can help each other to meet their objectives by dedicating their specialization. The quotes below underline the importance of working in a consistent way.

Manage consistency in spreading information and external project people Dutch Allanblackia Manager it was in Ghana, but actually is not very well anywhere. You have to look through the eyes of the farmer. If there is five times somebody from our project walking in, and it is five times another person who tells five times a different story, than you will create a totally different relation compared to when this is five times the same person Tanzanian Allanblackia manager acting like a team is very very important. Because I go there to buy the allanblackia, and find the quality is good because there is agreed on the quality with the partner who is responsible for training the farmers in quality. So when I leave, Faida MaLi is there [local NGO], and when they leave, TFCG [forest conservation] is there, and the community members know we are one thing, we are talking about the same thing

I never really interfered in approaching the communities, because the NGOs told which steps were needed to organize it in a proper way and it indeed seemed to work out in a good way. So besides I spend some money on it, I had not much interference with it Villagers I didnt really knew the organisation, but they came as a group, they gave us trainings and seminars on all kind of subjects and they came to open new markets for us. Because of that, I decided to trust them NGOs The task of SNV is to bring the organisations together, putting them on the same page and show them the shared objective, at the individual level, no-one can attain that objective. So we use action learning and make sure everybody sees each other as an important part of the system, that you need each other

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4.4 Manage communication Communication is a special variable. It turned out that communication itself, irrespective of the content, causes trust. Having face to face contact on a frequent base, for instance, creates confidence among partners. But communication has also another role. Communication influenced the impact of the factors described in the previous paragraphs. For example, Unilever can collaborate with trusted parties, but the people within the community must also be acquainted with this collaboration. Hence, communication can be seen as both a independent variable to trust and a moderator variable between the factors described in the previous paragraphs and trust. The interviews revealed two interesting trust building mechanisms resulting from communication. The first is the enormous importance of transparent communication and the other one is the remarkable influence of mass communication.

Mechanism 1: Transparent communication Transparent communication alludes to monitoring the clearness of the project towards community and manage their expectations. The Allanblackia project was brought with a lot of clearness and transparency. Already in the very beginning, when Unilever visited the country executive partners, they communicated in a very open way. This way of working continued throughout all other phases in the project. All interviewed villagers mentioned that the project was explained very clearly, including the complete gros margin analysis. This transparent communication helped to manage the expectations. Therefore, people didnt get disappointed because they expected to gain more from the project then they really got.

Communication: transparent communication NGO we had never worked with a company who was as transparent as Unilever. The price structure was very impressive, it was very transparent, nothing was hidden and we found the price that would be paid to the farmers very straight Village leader we didnt doubt, because during the meeting these people went into detail, they explained everything clearly, and all of us, we understood exactly what was going on in the project. So because they really went into details, we understand and we trusted them Villagers so we knew exactly where we stood

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Dutch Allanblackia manager

from the very beginning, we tried to be very clear and very honest about what would be in it for the farmers. Whats in it for you and whats in it for us? From the very beginning we have tried to temper the enthusiasm of getting rich very quickly

Tanzanian Allanblackia manager

we told them exactly what they would get, and we even tried to lower the expectation. Manage the expectation, manage the relationship, be honest and open on your side, give them the chance to ask questions and answer all questions honesty

Mechanism 2: Use mass communication The clearness of communication plays a major role in trust building. However, also the communication channels could influence the trust building process. It seemed to work out very well to use mass communication. This means hanging advertisements and posters about the project throughout all the villages and using local radio or television. Besides villagers perceive mass communication as something that indicates the trustworthiness of a person or organisation, it is also important that constant messages keep the people being aware of the is a project. Every time a villager sees an advertisement, he is reminded of the project again. The Dutch Allanblackia explains it as follows:
people in Tanzania are more inclined to believe in the goodness of human beings. You also often see things like, Ive heard it on the radio, or saw it on an advertisement, so it must be truth. While when we see something in the Netherlands on an advertisement, we think exactly the opposite, like oh, this cant be truth, its just an advertisement

And indeed, during the interviews all villagers mentioned the posters they saw and the commercials they heard.

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4.5 Adapt to institutional framework The previous paragraphs elaborated on the factors and mechanisms that drive and enhance the incremental trust building process. However, these factors are very general and pass over the specific situation of the people in the regarding communities. As trust building concerns people, it is essential to discover the factors that move these people in their life. The villagers involved in the allanblackia case are dealing, for instance, with formal structures of their government, but also with certain norms and values prevalent in their community. Furthermore, they are dependent on several sources of income, which are also very important in their lives. In this thesis, all these influencing factors in the villagers life together are called the institutional framework. The trust building factors and mechanisms as described in the previous paragraphs can be taken into account, but wont have much effect if the institutional framework is neglected. Hence, the effect of building trust is strongly dependent of the extent to which the institutional framework of the concerning communities is taken into account. Having knowledge of, and adapting to this institutional framework moderated the effect of the incremental trust building factors. The quotes of the Tanzanian Allanblackia manager below give examples of the way in which the institutional framework can influence the trust building process.
you have to know the socio-economic profile. In which way is Allanblackia going to support them socially and economically? But youll find issues, problems they are facing. So you got to know the challenges facing them and what other value chains you think are important to them, other than Allanblackia. So we find out in some other areas there are other important value chains and you have to show them allanblackia can supplement the other one, the kind of knowledge they will receive, the kind of services they will receive, they will compliment to support other value chains

Another illustrative example of what influences the institutional framework are historical events of a concerning community. They can determine how strangers are welcomed, and need to be taken in account very seriously.
Im talking about more that twenty years ago, but the wounds are still there. People are rising questions: are these not the same people who came here and told us they would buy all our spices, but didnt, they left the product with us, are those not the same people who promised all this and that? And there are also farmers who sold crops during the Tanzanian corporate movement, and havent got paid to date. You have to be aware of this information to be able to anticipate on this kind of questions

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Unilever obtained the crucial insight in the hierarchy, rules, norms, values and history of the communities which had to be involved in the Allanblackia supply chain. Using this knowledge was an essential moderator variable during the trust building process. From this point of view, three mechanisms were key in the process: adaptation to rules and hierarchy, adaptation to norms and values and collaboration in a country executive team.

Mechanism 1: Take advantage of rules and hierarchy By far the most discussed mechanism with respect to trust building is the way in which the government system was used. According to all interviewees, including Unilever, the NGOs and the community members, it is hardly possible, if at all, to successfully do business in rural areas without taking certain steps through the government structure. All interviewed villagers emphasized that they would not have collaborated with the Allanblackia project if it hadnt been introduced through the village government. The next explanation of the Tanzanian Allanblackia manager provides insight in the proper use of the Tanzanian government structure:
You cannot go straight to the village and start talking to the people. You have to call the district commissioner first, the directors, their people, the heads of their departments, you tell them what you want to do, they ask you questions and so on. And then when you want to go to the villages they give you one of the officers to come with you. When you are in the village, it is the district officer who introduces you to the village leadership and tells the district government is aware of the plans. From then, you start working with the villager leadership.

Although proper use of the hierarchal structure in Tanzania means going through the government structure as outlined in the quote above, it can require a totally different approach in another country.
in Ghana, you just go into a village and make a quick stop at the local chief, if hes available, and then you go straight to the villagers. So it is much more direct, much easier, but at other side, the relationship is also less strong. In Ghana its always very unclear what you exactly have achieved (quote by Dutch Allanblackia manager)

Hence, primarily research on government structures is crucial, before approaching villages within an unknown country or community. The next page provides quotes that endorse the proper use of the formal rules and hierarchy.

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Institutional framework: rules and hierarchy Villagers if its a foreigner coming to this country, it means that the government has to agree with him, and he has to come with some kind of agreements from the government

I wouldnt have trusted them if they didnt pass the leadership because there are a lot of cheatings. People can cheat, the can come and pretend they want to do something and you can find them deceiving you. So its very important for them to pass the village leadership

You cannot work with people without the government being aware, even now, as you have come here, the village leadership is suppose to know that there are people here doing the interviews, thats why I told your driver to go there and sign the book NGOs and you get their [villager leaders] blessings. They will also help you to explain the benefits to the villagers. Sometimes youll find that this Swahili language is not as clear as their own language. The village executives are born in the same village and understand both Swahili and the local community language very well, then they just talk the peoples language to the people.

Mechanism 2:Ttake advantage of norms and values Next to the formal part of the institutional framework, building trust requires to acknowledge and adapt to norms and values of the communities within a country. In this context, values represent ideas about what is important in a persons live. Unilevers strategic objectives caused sincere interest in taking care of the environment. Taking care of the environment was also one of the most important values in the communities. Interviews revealed that Unilevers care for the environment was an important factor for villagers to join the project.

Furthermore, respecting and adapting to norms seemed to be an important factor in trust building. Allanblackia project members took local norms very seriously. For instance, joining local activities is seen as something you cannot get around. Its not polite to decline an invitation. Respecting and adapting to norms can be expressed in many things. By dressing according to local dress codes, but also by joining activities like dancing with the community or having a meal together. The quotes on the next page show that adapting to norms and values of a community, in bigger and smaller details, can catalyse the trust building process a lot.

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Take advantage norms and values Villager the environment is very important, it gives us lee, and even what we are harvesting is from the trees. The people from Novella [the Allanblackia project] are supporting us a lot concerning the environment

We discovered that these people had good intentions, because apart from anything else, they are keeping our environment, so we decided to collaborate NGOs Dress code is very important, and the way you talk to old people, the way you address them. If you not well behave, they may not kick you out rudely, but they will not entertain you next time, theyll give you a slow go

African men, normally they want to control the funds in the family. We had to convince them Allanblackia would be an extra income for the family by respecting they are the heads of the family. At the same time we showed them this was a gender sensitive project Dutch Allanblackia manager Tanzanian Allanblackia manager he [one of the NGO people] knows how to handle people, he did many first introductions to create rapport with the people, that people thought, -thats a gentile man, I believe him or I trust him-. If I had stand there myself it probably worked out in a totally different way Now, sustainable in Unilever terms, because that can bring some confusion, is about don't harm the environment, but also to make sure that ethics are taken in to account, we agreed in the beginning that we were not going to pay corruption to any institution, we had norms; no corruption, no child labour, respect the government laws and the local laws and also gender, make sure that women are taking part, yes.

Mechanism 3: Country executive team It might be clear that applying the independent trust building variables to the institutional framework is very essential in trust building. However, Unilevers key mechanism to achieve the successful adaptation to the communities framework was the country executive team. The first practical step in the Allanblackia project was creating an executive project team in the country where the supply chain had to be established. As mentioned in the methodology section, the team consists of indigenous Unilever representatives, NGOs and relevant government bodies. The specific combination of team members gives the team access to support from and knowledge within Unilever, but also to knowledge about the formal and informal institutions of the concerning country. Furthermore, it provides access to a broad national and international network of relevant people and organisations. One of the first parties involved was an international development organisation called SNV. The important

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characteristic of the international development organisation is that it is connected with relevant parties like the various smaller local NGOs which are experienced in working with specific local communities. All districts and even the communities have different cultures, it is helpful to have a local NGO familiar with the district implementing the project within the communities. Another kind of partner that helps to become trusted by communities and are representatives from concerned government bodies. In Unilevers case this were representatives connected to the Tanzanian Ministry of Natural Resources and Tourism, the body who is among other things responsible for forest conservation. Unilevers project was dependent on the Allanblackia tree and hence it had to collaborate with (non-)governmental parties involved in forest conservation. The quotes in the table below provides insight in the importance of creating a country executive team with the necessary members to be able to adapt to institutional framework(s) within a country.
Institutional framework: country executive team Dutch Allanblackia manager in each country it are always people from the country itself, including the local management, who are running the project. The greater part of the project is in association with small local companies and people on village level, and I dont think western people can handle this in an efficient way I always brought local persons and organisations in action to perform the actual job

we said, guys [to the international NGO] we have a wonderful idea, but we have to collaborate with all those people in the local communities, were not sure how to do it, but we want to do it in a decent way and you can help us with that Tanzanian Allanblackia manager International NGO Unilever utilized the capacity of the company that was already existing in the country, and that is an advantage. I was local staff from Unilever, but the people in Tanzania see me as one of them, it integrates Unilever with the community we are specialized in connecting peoples capacities, we can collect the capacities of all organizations on the ground, who can support the mobilisation of communities and establish the supply chain Local NGO Culture, I mean this is dynamics of the community, for them to trust you, you have to know their behaviour, what they expect from you Villager leader it was important for them to come through the forest people because the Allanblackia is supposed to be prevented, and it is under the forest people. Even we have rules in our village to make sure we protect some of the trees, so most of the time we work together with the forest people

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4.6 An overview of the results & a BoP trust building model The interviews revealed five specific factors influencing Unilevers trust building process with the local communities. The first two, recognized as independent variables under the umbrella of incremental trust building, are outset manifestation and reciprocity. Incremental trust building means that investments in the relationship are done step by step and increase over time. Established trust leads to more investments by the people in local communities, which again leads to more investments by Unilever. Hence, a reciprocal effect occurred. The third factor recognized as an independent variable was consistency. The fourth factor, communication, fulfils two roles. In one respect it influenced trust directly irrespective of the content. In another respect, it moderated the effect of the incremental trust building factors. The fifth factor was also a moderator factor. Trust building concerns people. In the context of the BoP, these people live in a totally different world than representatives from western MNCs. Hence, it is essential for western MNCs to get acquainted with the institutional framework of the community members. The more they adapt their trust building activities to this institutional framework, the more successful the process will be. Besides the above mentioned factors, this chapter also discussed the actual mechanisms that explain the relation between the five factors and trust building. The model on the next page visualizes the factors and the accompanying mechanisms.

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Model for trust building in BoP communities

Reciprocity - Invest constant and structural in relationships - Make the project community property - Do what you promise - Have periodical evaluations Outset manifestation - Collaborate with trusted parties - Show skills and competences in a practical way - Write agreements endorsed by trusted parties Consistency - Spread consistent information - Control consistency in external project members Communication - Manage transparent communication - Use mass communication Adapt to institutional framework - Capitalize on rules and hierarchy - Capitalize on norms and values Incremental trust building

Trust

- Use a country executive team

5. Discussion and conclusion

5.1 Introduction The circumspect reader had one very elementary question already after the research question was outlined: If a mighty multinational company with annual revenues of more than 55 billion dollar enters a community to collaborate with people living on less that one dollar a day, to what extent can trust really play a role? Isnt trust a misplaced concept in this context? Arent dependency and wishful thinking playing a much bigger role in the community members decision to collaborate? And indeed, dependency and wishful thinking might surely be under discussion. However, the results of this thesis clearly showed that the concerning people in the Tanzanian communities do have to trust a party, especially a large western company, before they decide to collaborate and become vulnerable to their actions. The quotes in the result chapter showed that they quickly doubt the trustworthiness of foreign companies and that they even rejected to collaborate with companies, only because there was a lack of trust. The key objective of this research was to discover how western MNCs build trust with local communities in developing countries. Acknowledging the above, we can state that it was a relevant objective and the model on the previous page answers this question based on the studied case.

Another objective was to explore if prevailing trust literature has value in the context of the BoP. Looking at the trust building factors in the Allanblackia case through the scope of this literature provides in first instance a familiar view. The factors as described in the result chapter show a strong overlap with the categories of the trust building literature as displayed in the table on page 16. In that sense, we can say that the prevailing trust literature is valuable in the context of the BoP. However, the trust building model on page 50, shows two interesting characteristics. The first one is the moderating role that two of the trust building factors have. The other characteristic is the insight in mechanisms. Knowing that certain factors influence trust building, doesnt tell much about the actual processes that account for relations. To overcome this gap, the result chapter discussed the mechanisms that exactly tell what caused the relation between the variables in the specific context of the BoP.

Then there are two questions concerning the BoP literature. The first is: what does this thesis add to the existing literature, and are there any contradictions? The second is: do the methods to successfully launch BoP ventures, as proposed in the BoP literature, foster trust as well?

5.2 The suitability of prevailing trust literature The variables as discussed in the result chapter are not new in the trust literature. The comparisons below will concisely paint a picture to underpin this finding.

Incremental trust building is a broadly discussed matter. Bowman and Hurry (1993) stated that a trusted relationship starts with incremental commitment and Burt and Knez (1996) discusses the slow process of change in the development of trust. In line with the literature, the result chapter made clear that the villagers first started with little investments in the project and increased their devotion over time. The literature leads one to suspect that reciprocity is a driving factor in this process. And indeed, the case showed reciprocity as one of the factors hanging under the incremental trust building umbrella. Furthermore, outset manifestation, proposed as the other factor with respect to incremental trust building is comparable with the category the first steps in trust building as displayed in the table on page 16.

Also consistency is a familiar concept in the trust literature. Mayer et al (1995) appoint integrity as a variable influencing trust. According to them, integrity is determined by the extent to which a party shows consistency in behaviour.

Communication is discussed in several ways. The trust literature refers to communication in general (Creed & Miles, 1996; Morgan & Hunt, 1994), to the importance of frequent face-toface contact (Van Ees & Bachmann, 2006), to information exchange (Das & Teng, 1998), to making trustworthiness noticeable (Bacharach &Gambetta, 2001) and to the credible communications of others (Mayer et al., 1995). The result chapter turned out that all these viewpoints on communication have also been important in Unilevers trust building process.

Adaptation to the institutional framework can be traced to several of the insights discussed in the theoretical framework. Yet, besides Arrighetti (1997), all scholars mainly discuss the informal part of the institutions. Morgan and Hunt (1994) name shared values, Mayer et al. (1995) speak of benevolence, Creed and Miles (1996) call it similarity, Lewicki and Bunker (1995) a social bond because of mutual appreciation and Das and Teng (1998) discuss the importance of norms, values and needs of each other.

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More exiting, however, is the deviating use of the above discussed factors in the context of the BoP. As already mentioned, there are two variables which play an important moderating role.

The first one is communication. Although Bacharach and Gambetta, (2001) appointed communication already as a moderator variable, it seems to have a more important role in the context of the BoP than in a western context. The results showed that the world views of the representatives from the western MNC and the members of the BoP communities are very different. Hence communication had the very responsible role, to not only to make the trust building activities knowable to the community members, but also to translate these activities to their world view. Transparency in the communication is requisite. The reason why the moderating role of communication is less weighty in western situations, could be because less explanation is needed on institutional factors. This brings us directly to the next moderator variable: the importance to adapt to the institutional framework of a concerning community.

The difficult surmountable differences between western life and life in BoP communities, can be a serious barrier in trust building. A MNC could put a lot of effort in the earlier mentioned trust building factors, but if they dont adapt it to the institutional framework of the concerning community, it wont make a big difference. Hence, the extent to which this happens determines the success of the other trust building factors. The previous page already showed that acknowledging rules, norms and values is discussed in the literature. It is, however, not discussed as a moderator variable. Hence, the question is: why it should be a moderator variable in the context of the BoP and not just an independent variable as presented in the literature? The answer could be the following: the literature generally refers to institutional factors as the more you are similar to each other and share the same norms and values, the more you will trust each other. In western situations, MNC representatives already have a similar kind of world view as their western partners and hence, the more it is similar, the more they will trust each other. Conversely, western MNC representatives and BoP community members are not similar at all. The difference is that big, that trust could hardly be based on similar world views. Exactly this is the reason why trust building activities should be very consciously adapted to the institutional framework of the concerning community members. Hence, the lack of similarity makes adapting to the institutional framework a moderator variable. 53

Another point regarding the adaptability of prevailing trust literature in the context of the BoP is the actual mechanisms that cause the relationship between the variables. It could be well conceivable that totally different mechanisms have to be used in the context of the BoP. And indeed, although some mechanisms can be traced back to the literature, most of them are specifically applicable in the BoP and some of them stand out especially.

For instance, showing skills and competences in a practical way. Showing skills and competences is also mentioned by Mayer et al. (1995). However, the way in which skills and competences cause trust is different in the BoP. Members of remote communities assess skills and competences by looking at practical examples. An example is showing an actual product, made by the company, or by learning practical lessons during the trainings.

Also the writing of agreements has a special way of functioning in the BoP. It would be likely to trace this mechanism to the possibility of deterrence if trust is violated as described by Lewicki and Bunker (1995). However, the way how it actually works is quite different. Deterrence on legal grounds is barely possible, community members have nor the money nor the experience to summon Unilever. Still they see these written agreements as an important confirmation of the understandings with respect to the collaboration. Deep interviews revealed that this is mainly because NGOs co-sign the agreements, and villagers attach strong value to this. Hence, writing agreements can therefore better be reduced to the trusted partner as described by Das & Teng (1998).

As in the theoretical framework turned out, all trust scholars agree that reciprocity influences trust building. However, how to influence or manage reciprocity is less discussed. Basically this makes sense, because reciprocity is about how both (or all) parties experiencing each others investments in their relationship, and not about an effect caused by one of the parties. Yet, if reciprocity has to do with more than one party, there must be at least one party who can influence or stabilize this process. Unilever managed the reciprocity by four mechanisms: constantly investing in the relationship, making the project community property, doing what they promised and having periodical evaluations. The first three mechanisms determined that the other party experienced a constant devotion from Unilevers side. The last mechanism, the evaluations, was used so all parties could vent the way in which they experienced each others investment in the relationship. This way, the reciprocity was evaluated.

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Another mechanism standing out, is the transparent communication. The result chapter discussed in Unilevers strategy to build trust, was constantly watching the clearness of all aspects of the project to all involved parties. Everything, from strategic intentions until gross margin analysis was explained down to the smallest detail, time and time again. However, some suspicion with respect to this mechanism is appropriate. How can the complexity and stratification of a company like Unilever be transparent to a BoP community member? Indeed, it hardly cant. However, it are only the aspects of Unilever relevant to the involved community members that have to be transparent. Hence, communication the factors related to the supply chain can be made transparent, and doing this made Unilever a trustable partner.

5.3 Comparison with the BoP literature The BoP literature proposed many methods to successfully launch a BoP venture. Some of these methods even contained ideas about trust building. Hence, it would be interesting to discuss what this thesis add to the existing literature, and if there are any contradictions. First of all, it became very clear that all the ideas about trust building as outlined in the table on page 18 - about trust in BoP literature -, without one single exception, played an important role in the Allanblackia case as well.

However, zooming out on the literature to a more general level provides some interesting views. The first thing we bump into, is the proposed importance of flying under the radar of corruption, found in Stuart Harts book Capitalism at the Crossroads (2007). He explains that building BoP ventures from the bottom up, by working directly with the end-consumer, makes it possible to bypass the need to deal with the often corrupt central governments. This might work out well, but might also take the corner too tightly. In the Allanblackia case it turned out that trust was earned by using the government system in a proper way. Although the national government wasnt involved in the beginning of the project, Unilever had to pass the government on the regional, ward and village level before it could reach the actual villagers. All interviewees mentioned explicitly that Unilever would not have been trusted if they would have went directly to the villagers or the government on ward or village level. The district government was the first trusted party to involve, before going any further. Another statement in Harts book is also worth to reconsider. He mentions that relationships are primarily grounded in social, not legal contracts. This could imply that written agreements, signed by the involved parties are useless. The Allanblackia case, however, showed that

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although people in local communities do attach great value to social contracts, they feel even more confident with having contracts signed by Unilever representatives.

The findings of this thesis have more to offer than just, similarities and contradictions with the BoP literature. There are also findings which are not connectable to the BoP literature yet, but can offer a added value.

One of the findings in the Allanblackia case was the role of mass communication. People in remote communities are not used to poster advertisements and commercials on their local radio and it is taken much more serious than in western countries. Besides, by the use of mass communication, people get constantly confronted with the project and it get integrated in the community faster. The only communication channel discussed in the literature is face-to-face communication. Mass communication is not yet recognized as a medium to increase trustworthiness.

Furthermore, BoP literature pays a lot of attention to the engagement with local people and becoming indigenous. The Allanblackia case showed that the community members attached a lot of value to the transparency of the communication and to consistency in both information and people. This could be an added value to the process of becoming indigenous.

The question that rest is: do the methods to successfully launch BoP ventures, as proposed in the BoP literature, foster trust as well? The BoP protocol (Simanis & Hart, 2008) provides a well-organized and comprehensive overview of most of these methods. Hence, it would be interesting to discuss this protocol in the light of this thesis findings. It seems, however, that this is a very short discussion. All of the nine steps as proposed in the protocol can also be found in the Allanblackia case. Hence, based on this thesis, one could say yes, the BoP protocol fosters trust building. There are, however, some points in general found in the protocol that needs some reconsideration.

It is stated that in the selection of a BoP project site it would be better if the MNC does not already have an extensive, entrenched business presence, Because, the initiative could be captured by the corporations traditional business norms and practices. Surprisingly, Unilever did have an extensive, entrenched business in Tanzania, namely the tea business. Moreover, in this case it was very convenient, because Unilever could recruit easily suitable 56

people who had both knowledge of Tanzanian culture and Unilever culture. Of course, it should be taken in account that the venture have to be flexible and innovative, but that should not have to be a great barrier. The Allanblackia case showed that it can have more advantages than disadvantages to already have an extensive business in the selected BoP business site.

Furthermore, the protocol suggests as one of the first steps to select a community based organisation as a partner. This thesis endorses that it is very important to have a local partner, but the protocol might include one essential step, before selecting a local partner. Unilever collaborated with an international NGO called SNV. This partner had essential connections with various local NGOs throughout the country. It did not only helped Unilever with finding an appropriate local partner, but also fostered the collaboration between the several partners and stimulated the learning process between the parties from different communities. Hence, according the findings in this thesis, it could be more effective and efficient to partner up with a international NGO, before directly approaching community based organisations.

The last point in the protocol to reconsider is about entering the community with no preconceived product ideas and no initial commercial agenda. Unilever did the opposite. It knew already what it wanted: oil from the Allanblackia nuts. Knowing already what they wanted enabled them to conduct some preliminary research about potential possibilities. This had the advantage that they could approach immediately the right communities with a clear story, which made them more trustworthy to the government and the villages. Of course, starting a BoP venture without any commercial agenda can lead to very innovative business plans. However, it does not have to mean that having an idea in advance will by definition be less successful.

5.4 Conclusion The discussion showed that we already knew the trust building factors in the Allanblackia project from the prevailing trust literature. So, could it be that trust building works the same all around the world? As for variables relevant in trust building activities, this could be true. This thesis confirmed they are also applicable in the context of the BoP. However, this case also showed that the relation between the variables, their role within the process, and the actual processes that account for the relations were for a great part context specific. Hence, variables from the trust literature can be used as a good starting point for trust research in

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various contexts, but the art of trust research will be to find the context dependent relations and mechanisms. The model on page 50 indicates the relations between the variables and the actual mechanisms accounting for the relations in the context of a western MNCs building trust with local communities in the BoP. As for the BoP literature, we saw that the ideas living in this field of research are for the greater part consistent with the outcomes found in the Allanblackia case. However, the discussion showed also some critical remarks, suggested several points that could have some attention. The main reason for this could be the still infant phase in which the BoP literature finds itself. Keep on studying BoP cases from different viewpoints and by different researchers could slowly evolve this area of Academia to a meaningful discipline that might have more impact on the equal distribution of the worlds wealth than we can imagine on this very moment.

5.5 Limitations The relevance of the above written conclusions has to be taken with some shade of meaning. To start with, the drawn conclusions are based on just one case. Findings would have had more weight if they were originating from multiple cases including both successful trust building cases and unsuccessful cases. Furthermore, trust building activities can be very dependent on the country in which they are executed. This study would be more significant if it was conducted in various countries. Also working with a translator could have caused some bias in the interpretation of the interviews with the people in local communities. Although the translator was a very proficient Swahili and English speaker, the intervention of a third person between interviewer and interviewee could cause the lost or distortion of potentially important information. Furthermore, the point of departing could have influenced the findings. Trust is interwoven in a complex network of research fields. This study started with prevailing trust literature, BoP literature, cross cultural collaboration literature and development literature as a base. However, there are also other fields of research that could offer an interesting starting point. The results showed that an important factor to build trust is the adaptation to the institutional framework. The subject institutions, however, is a well-established field of research. Hence, we could learn a lot from literature on institutions with respect to trust building, or collaboration in general. For instance, if we know how to study institutions, trust could even more effectively been build. Also research from communication studies could have had added value to the theoretical framework. The results sketched communication as an important factor in trust building. It would be interesting to see if the field of communication research offers useful guidelines to explore effective ways of communication in BoP contexts. 58

5.5 Further research First of all, based on the limitations of this research, future research should be conducted on multiple cases, among which successful and unsuccessful ones and originating from different countries on different continents. Furthermore, it could have a broader foundation of relevant literature. Including prevailing literature on institutions and communications in the theoretical framework could result in interesting new insights. Moreover, it would be interesting to use a quantitative (cross-sectional) research design to test the model proposed on page 48. If different BoP cases can be found, the research can measure the extent of trust among of the community members in the MNC and the presence of the trust factors in the model to determine the influence of the factors on trust building.

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