Wal-Sam, an enormous discount retailer, has an agreement with Company Z, a small, up-and-coming vendor, to deliver one million units of Product Z in a month's time. Both parties know that if Company Z fails to deliver adequate product on time, Wal-Sam can easily tarnish its reputation. This type of transaction demonstrates which type of trust?

Question

Quizplus · Accepted Answer

Semi-strong-form trust arises when parties put significant assets at risk but employ contracts or independent parties to resolve disputes or handle unexpected contingencies. The trading parties also rely on social mechanisms, such as shared norms and values or threats, to provide more powerful incentives to avoid violating the trust of the other party.

Wal-Sam, an Enormous Discount Retailer, Has an Agreement with Company