Emergence of calculus-based trust

I describe next the trust development process by combining two models. The basis for trust during the early stage of a relationship is called calculus-based trust, according to Lewicki & Bunker (1996). Lewicki & Bunker’s three stage-trust development model builds on an idea that stage-trust develops gradually and grows with mutual experience in work relationships over time (Möllering 2006, 89).

I describe the trust development process in cooperative inter-organisational relationships, adapting the framework of Ring and Van de Ven (1994). There are three consecutive stages of negotiations, commitments and executions which are supplemented by continuous assessments of the balance of efficiency and equity in the relationship. Formality and informality need to be balanced at each stage, and the continuous assessment of efficiency and equity influences the further development of the relationship (Möllering 2006, 91-92). I combine the two models in order to describe the trust development process; I emphasise the process view by the model of Ring & Van de Ven (1994) and trust development by the model of Lewicki & Bunker (1994).

The emergence of calculus-based trust in 2005 is described as the rector dis-cusses (interview 2014) the annual summer meetings of the rectors in Eastern Finland. The emergence of calculus-based trust and the negotiation process in the context of merger of the two university organisations is illustrated in the timeline in Figure 16.

The rector notes in an interview (2014) that he did not personally know many people, besides the rector, in the University of Kuopio. The local provincial gov-ernment in eastern Finland had annually organised informal summer meetings of university rectors. These informal meetings enabled interaction and communi-cation between the rectors. during these meetings, there was a general discourse of cooperation but the merger was not stated as an option.

It was not until 2005, when the University of Joensuu and University of Kuopio,

‘for the first time expressed aloud’ that there could be benefits from engaging in a merger. There were signs of a calculus based form of trust in the discourse between the two university organisations. The concept of the ‘merger’ was men-tioned in the rector’s speech at the opening ceremony for the first time in 2005.

The rector stated that forced alliances directed by outsiders are not desirable but strategic alliances with the neighbouring higher education institutes are at-tractive - as far as there are benefits to be achieved which are obvious for all the parties (speech 2005).

Figure 16: Merger as ‘a Leap of Faith’ and the emergence of trust: negotiations

The Lappeenranta University of Technology was not included in the discourse in year of 2005. “The idea of the structural development was rippling in the air” as the rector states. And “the next kindling” towards the merger was the deepening of the cooperation within business education.

In cooperative relationships between organisations, it is typical that there is the co-existence of cooperation and competition, as Möllering (2006, 78) notes.

Trust will emerge as a consequence of repeated interactions over time, if and when the parties involved uphold norms of equity (Möllering 2006, 78).

The Lappeenranta University of Technology wished to end the network within business education in Eastern Finland and withdraw. The Lappeenranta University of Technology wished to focus on strengthening its own profile and let business education remain a minor subject in Joensuu and Kuopio, as the rec-tor notes in an interview (2014). But the University of Joensuu and the University of Kuopio considered business education to be too important to be left as a mi-nor-subject. This common interest strengthened the cooperation between the University of Joensuu and the University of Kuopio as the rector states in an interview (2014).

The University of Joensuu and the University of Kuopio left a common ap-plication for a potential structural renewal of the two university organisations with the Ministry of Education. The application was prepared by Professor Reijo

’LEAP OF FAITH’

TRUST DEVELOPMENT University of

Joensuu University of

Kuopio

Emergence Vulnerability

of the calculus-based trust: Suspicious athmosphere;

Compatibility:

Common history Regional similarity

’Hidden intentions of the partner’; fears of opportunism

Complementary disciplines Differentiated faculties Ability

Different administration cultures: ’dwelling on’ vs.

’steamrolling’

MERGER

2005 2006 2007 Calculus-based trust

Negotiations

Vihko’s group and left at the Ministry of Education in 2006. The rector discusses in 2007 that including Lappeenranta University of Technology as a third actor in the federation would have formed too heterogeneous an entity, whilst its inner composition would be incoherent.

The motive for the merger was the strategy of becoming a stronger university according to the rector’s interview (2014). By operating as single universities, the University of Joensuu and the University of Kuopio would be small players. The change readiness was signalled towards the Ministry of Education as well. The resources were saved and small funds gained from the Ministry of Education as the rector notes in the interview.

There were assessments concerning efficiency (Ring & Van de Ven 1994, 93) made concerning the cooperation between the two university organisations.

An equally important criterion for assessing a cooperative inter-organisational relationship, according to Ring & Van de Ven (1994, 93-94) is equity, defined as

“fair dealing”. The construct of equity builds on an idea in which individuals seek to reconcile their self-interests with the need to maintain social relation-ships. Fair dealing does not necessarily require that inputs or outcomes are always divided equally between the parties. Fair dealing also implies that all parties receive benefits that are proportional to their investments (Ring & Van de Ven 1994, 93-94).

As Tirronen et al. (2016, 183) state, the initial idea concerning the coopera-tion was not the merger but the strategic alliance between two autonomous uni-versities at the start in August 2006. But after negotiations between Ministry of Education and two partner universities, a new proposal was prepared by adding a federation as a basis of cooperation. The idea of the federation was introduced to the Ministry of Education by the two universities and met the requirements of the Ministry. The federation of the Universities of Joensuu and Kuopio was selected as one of the three spearhead projects in the national structural development of universities. (Tirronen et al. 2016, 182-183)

According to Tirronen (2008, 19, 21), the boards of the University of Joensuu and the University of Kuopio decided that the two universities would merge.

The boards of the two university organisations decided the name of the new university on 5.10.2007. The University of Eastern Finland was formed – not as an alliance or federation but as one unit through the merger. The merger was actualised when the boards of the former universities decided the operational faculty structure of the new organisation on 16.4.2008. and the commitment was made.

As Ring & Van de Ven (1994, 98) state, in the commitment stage, the parties will attain consensus in their minds when they reach an agreement on the obli-gations and rules for future actions in the relationship. At this point, the terms and governance structure of the relationship are established either formally with a legal contract or informally between the parties. A series of interactions have been necessary to enable the parties to reach a mutual consent.

Picture 1. On 14 May, Director of Administration Päivi Nerg and Rector Matti Uusitupa of the University of Kuopio and Director of Administration Petri Lintunen and Rector Perttu Vartiainen of the University of Joensuu signed an agreement on the principles and procedures for the preparation of the University of Eastern Finland to be launched in 2010. (Source: Annual Report University of Joensuu 2007, page 33)

during the planning process of the new university organisation in 2007-2009, the rector states that he knew only a few researchers or personnel of the University of Kuopio because of the unfamiliar scientific field of medicine. The university stakeholders, personnel in the City of Kuopio and North-Savo Federation were more familiar than the personnel of the University of Kuopio. despite the differ-ent scidiffer-entific backgrounds, the communication between the rectors of the former university organisations was good. The personal chemistry between the two rec-tors was compatible (interview 2014).

during the planning process of the merger in 2007, the rector discusses (speech 2007) the formation of the new organisation entity. The motive for the alliance was to develop one operational entity so that the basis of the different scientific cultures in the university and the geographical distance would be complementa-ry and in opposition. If this was successful, ‘the leap of faith’ would be worth the risk. The competitiveness of the new organisation would depend on the success in uniting the two university organisations as one operational and functional entity.

‘The leap of faith’ and risk is present at the rector’s discourse (speech in 2014) as the rector is recalls the merger process in 2008. There were suspicions and predictions concerning the intentions of the new partner during the merger in the 2008 strategyprocess. Even though the strategy process during the merger was planned comprehensively with the new colleagues, there was still a suspicious atmosphere. The hidden and ‘real’ intentions of the new partner and colleagues were targets of speculation.

The rector states in an interview (2014) that he believed in the success of the merger process. He did not think (a lot) about the possibility of failure. But there were many whisperers who did. The merger process was so inspiring and challeng-ing that it encouraged the rector to apply for the next period of the rectorship in 2008.

The rector of the former University of Joensuu acted as the first rector of the new university organisation. The rector notes that his professional background supported the structural renewal process. There are parallel elements in the poli-cy-oriented human geography which promote strategic thinking (interview 2014).

Even though there was good interaction between the two rectors during the merger process, the next administrative level met with suspicions between two university organisations (interview 2014). Medicine was dominated by University of Kuopio and the humanities (education and social sciences) by the University of Joensuu. The suspicions did not only evolve within the administration. There were also suspicions within the (similar) disciplines.

There was quite strong resistance to change at the middle administration level.

This was mainly due to differences between the administration cultures. There was a culture of discussing matters in committees and meetings in the University of Kuopio. The discussion culture was regarded as a ‘Swedish-style’, of ‘dwelling on’ too much on administration in other university. The administrative practices were more straightforward in the University of Joensuu. This administrative pro-cedure was considered to be ‘steamrolling’ by the other university.

The other distinction (interview 2014) between the administration cultures was the fact that the administration was built up around the medical discipline in the former university organisation in Kuopio. The administration in the University of Kuopio was centralised. The student admission and administra-tion was a centralised and strong unit.

In the University of Joensuu the administration was decentralised. There was a faculty centred administration, concerning admissions and student affairs. The facul-ties were more autonomous in the University of Joensuu (interview 2014). The rector thought in an interview in 2014 that this might be one reason for the cultural differ-ences between administrations in the former university organisations. There was less need for discussions or meetings in the decentralised model of the faculty centred administration in Joensuu. The administration culture was more self-directing.

If these differences were too difficult to handle for some of the administrators, they ‘stayed there in the outer periphery’ of the organisation in both former univer-sity organisations (interview 2014). Most of the key administrators and other per-sonnel who did not adjust to the change have left the organisation (interview 2014).