Managing Organizational Trust in the 21st Century: A Pragmatic Approach to Trust Development, Maintenance, and Repair

Edward C. Tomlinson, Andrew Schnackenberg, and Emily Amdurer

Trust is widely acknowledged to be critical for organizational effectiveness. Indeed, researchers have confirmed its role in predicting a wide array of outcomes ranging from employee satisfaction, commitment, and performance-related behaviors to team effectiveness and to organizational-level operating metrics such as sales and profitability. 1 The advantages offered by trust are often understood as a product of favorable social exchanges in relationships with others.2 That is, voluntarily conferred social resources by one party create a sense of obligation that invokes some form of reciprocation by the other,3 thus engendering trust. Although trust can be a useful tool in generating a competitive advantage4 (e.g., via reducing the need for interfirm monitoring), the potential benefits it offers often fail to materialize. It appears that trust is a commodity that organizations often squander by neglecting to cultivate it among their stakeholders, and/or acting in ways that damage trust.5 Recent surveys show that, in general, trust in organizations is low and continues to erode over time.6 If trust can be harnessed as a resource to actually improve organizational effectiveness, organizational leaders need practical guidance on how trust can be developed, maintained, and repaired if damaged. We draw from the academic research on trust in organizational settings to provide this guidance. In order to accomplish this objective, we begin by providing a research-based framework on the nature and determinants of trust. We proceed to use this foundation to articulate how trust can be managed effectively in organizational settings.

OVERVIEW OF TRUST

Our analysis begins from the premise that one cannot successfully undertake a course of action intended to produce a given result until the criteria defining that result is clear. Because the term "trust" is common to everyday language, individuals may presume to understand all that this term connotes and yet use it in ways that significantly differ from how others view the concept. Such a problem has even arisen among researchers in different academic disciplines who all use the term "trust" when referring to concepts that are actually distinct, such as cooperative behavior7 and goodwill.8 To ensure conceptual clarity, we define trust as the "psychological state [of the trustor] comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of [a trustee]."9 Because trust comprises a willingness by the trustor to be vulnerable, it is distinct from, yet leads to, behaviors that involve actually taking a risk in a relationship with a trustee.10 This distinction is important because cooperation, for example, can arise in the absence of trust (e.g., when the trustor is not in a vulnerable position on an important issue11 or when an individual is coerced into cooperating).

It is also important to distinguish between trust and factors that give rise to trust. The question is, if trust is the willingness to be vulnerable to another, what contributes to this willingness? We will identify and describe three primary factors: the trustworthiness of the trustee, the transparency that enables an assessment of the trustee's trustworthiness, and the emotional attachment between the trustor and trustee.

Trustworthiness

Simply stated, trust is placed in those who are deemed to be trustworthy. Accordingly, trustworthiness is focused on a rational evaluation of the trustee, with particular emphasis on characteristics that contribute to the trustor's willingness to become vulnerable. These characteristics tend to be viewed as traits or attributes that typify one's behaviors and intentions. Factors that contribute to one's image of trustworthiness can be parsimoniously summarized in terms of ability, benevolence, and integrity.12

Ability refers to "that group of skills, competencies, and characteristics that enable a party to have influence within some specific domain."13 In other words, trustworthiness necessarily involves the capacity to honor trust: the noblest intentions to honor trust fail to do so without the requisite ability. It is also critical to note that ability is specifically evaluated in relation to a particular realm, because skill and competence in one domain does not necessarily translate into others. For example, one might trust her spouse (who is employed as an accountant) to correctly complete and file the household tax return, but not to successfully prepare a large holiday meal for friends and family (given his limited culinary experience). Finally, some types of abilities are malleable (such as skills that can be acquired and refined over time), whereas some are stable and resistant to change (such as cognitive ability).14

Benevolence refers to "the extent to which a trustee is believed to want to do good to the trustor, aside from an egocentric profit motive."15 Such discretionary behaviors speak to the trustee's willingness to behave in a trustworthy fashion. Benevolence is evaluated in relation to the specific relationship between the trustor and trustee. Therefore, assessing benevolence is believed to be more easily accomplished in more developed relationships, as this involves an evaluation of the trustor's orientation toward the trustee in particular (which is not the case with ability). Demonstrating a pattern of care, concern, and goodwill toward the trustor over time (especially when it comes at some cost to the trustee) are the hallmarks of benevolence. Once formed, perceptions of benevolence can be very resistant to change.16 For example, in strong, well-developed relationships, perceptions of high benevolence can become so entrenched that trustor's deny any subsequent evidence of malfeasance.17 In the same way, once one is regarded as having low benevolence, any subsequent behavior tends to be viewed through a lens of suspicion.18 There is also some evidence that trust erodes more rapidly when the reason for a trustee's violation of trust is an unwillingness (rather than inability) to honor trust.19

Integrity refers to the trustor's assessment that "the trustee adheres to a set of principles that the trustor finds acceptable."20 Indicators of integrity may include the degree to which the trustor treats others fairly, engages in consistent and predictable behavior, and enacts behaviors that are consistent with espoused principles and values. Importantly, the trustor's acceptance is as critical as the trustee's adherence. For example, the trustee's adherence to espoused principles facilitates predictability, but might show that the trustee is predictably selfish, and therefore does not necessarily contribute to trust. It is the adherence to principles the trustor accepts that facilitates the trustor's confident positive expectations. As with benevolence, integrity also speaks to the trustee's willingness to honor trust. Because integrity is often perceived in reference to accepted principles and values, it tends to result in a holistic evaluation of the trustee. That is, regardless of domain, and regardless of whether it occurs in the trustor's particular relationship with the trustee, integrity-relevant events are salient and diagnostic. Much like perceptions of benevolence in an established relationship, integrity perceptions tend to be highly stable once formed (unless there is overwhelming evidence to the contrary).21 For example, trustees found to be dishonest on one occasion tend to be perceived as dishonest in general.22

Transparency

In recent years, increased attention has been paid to the topic of trans-parency.23 Most accounts of transparency define it as the inherent quality of information in communications such as employment contracts, lease agreements, advertising materials, operating policies, e-mails, public disclosures, and other public documents.24 In this chapter, we define transparency more comprehensively in terms of the degree to which communications are characterized by disclosure, clarity, and accuracy. Research suggests that higher levels of transparency correspond to higher levels of organizational trust.25 Elaborating on this relationship, we contend that transparency relates to the formation of trust in two basic ways. First, when a firm finds itself in the position of a trustee, transparency signals to its partners and stakeholders a level of trustworthiness through the forthright development of contracts and other documents. In other words, firms trying to prove that they are trustworthy will increase their openness in information flow. Second, when a firm takes the position of a trustor, transparency allows it to more accurately assess the partner's trustworthiness. In this way transparency provides more information to the trustor about the partner's abilities, benevolence, and integrity.

Emotional Attachment

The previous sections on trustworthiness and transparency are predominantly grounded in a rational, cognitive approach. This overlooks the reality that we often trust others (at least to some extent) because of our positive feelings toward them. Especially in close and well-developed relationships, parties often come to develop strong emotional bonds due to their identification with each other. That is, they share common interests and goals, they tend to react the same way in common situations, and they espouse the same values and principles.26 Identification fosters a sense of mutual caring and concern in the relationship. Clearly, this is more than mere benevolence. Whereas benevolence indicates a unilateral perception of the trustee's goodwill toward the trustor, emotional attachment engenders a mutually strong, positive emotional bond between the trustor and the trustee. Although trust resulting from such a strong emotional attachment is relatively more uncommon (compared to trust due to more cognitive considerations), it can be particularly robust and resilient.27

 
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